Good Machine buy alters Focus at U

Greenstein ankles as USA Films chair

Universal Studios acquired specialty film company Good Machine on Thursday and merged it with USA Films.

The new company, called Focus, will be headed by Good Machine principals David Linde and James Schamus as co-presidents. They report to U Pix chairman Stacey Snider.

Ted Hope, the third Good Machine principal, will enter into a three-year, first-look agreement to produce feature films to be distribbed by Focus, which will be based in New York. USA Films’ Los Angeles office will serve as Focus’ West Coast outpost.

USA Films chairman Scott Greenstein, who was expected to head Universal’s integrated specialty unit, will ankle the company “to pursue other opportunities.”

Exex at U, which is a subsid of Paris-based Vivendi Universal, declined to discuss financial terms of the acquisition.

A U spokeswoman said there would likely be pinkslips in the consolidation of Good Machine and USA Films’ backoffice activities.

Stephane Sperry, currently co-president, StudioCanal U.S., will serve as liaison between Focus and StudioCanal Europe, and will report to Linde and Schamus.

“Our ongoing integration process has provided an opportunity for us to think philosophically about our goals in the specialty film business and how we will maximize the potential in those assets,” Snider said.

Good Machine Intl., to be renamed Focus Intl., will continue to represent third-party producers for international sales, along with representing Focus and Universal Pictures on their international sales activity. Linde will continue to run the operations of the international sales company.

“All too often, specialty film units are a spinoff of the primary business of a major studio,” Snider said. “With the formation of Focus under the leadership of David and James, we have a combustible dynamic that combines a first-class independent marketing and distribution entity with an entrepreneurial spirit that we believe will create the global leader in specialty film.”

Loading ‘firepower’

Universal Studios president and chief operating officer Ron Meyer said, “This new entity gives us the firepower we need to accelerate Universal’s commitment to growing our specialty film business. The combination of strengths provided by Good Machine and USA Films is a great strategic fit, with the potential to build Focus into a world-class independent film operation.”

Universal has long struggled to find a good fit in the independent film arena. The studio acquired majority interest in October Films in late 1997, only to sell those assets to Barry Diller in March 1999. That company became USA Films.

Specialty arm formed

The next year, Universal formed specialty arm Universal Focus. However, the company never quite found its footing and served only as a marketing and distribution label. The division shuttered in March, shortly after its most successful release, “Mulholland Drive.”

Formed in 1991, Good Machine has produced and handled sales for more than 100 features and short films, including “In the Bedroom,” “Crouching Tiger, Hidden Dragon,” “Y Tu Mama tambien” and “The Man Who Wasn’t There.”

Another Good Machine asset is Ang Lee, who is currently directing the Schamus-penned “The Hulk” for Universal. Good Machine has produced all of Lee’s films. Schamus wrote or co-wrote all of those films, with the exception of “Sense and Sensibility.”

End of an era

The formation of Focus reps the end of an era, as USA Films and Good Machine were two of the industry’s highest-profile independents. However, Good Machine has strong ties with both Uand Canal Plus.

In addition to “The Hulk,” Good Machine produced “Ride With the Devil” for the studio, while GMI handled international rights on “Bride of Chucky” which proved to be tremendously successful for the sales company.

In addition, Good Machine did yeoman’s work with the handling of Todd Solondz’s controversial 1998 pic “Happiness.” When the pic received an NC-17 from the Motion Picture Association of America, the U-based distrib October Films dropped the film. Good Machine then handled its domestic release.

Financing difficult

However, like most independents, Good Machine often found financing to be a struggle. It did not have a major breakout hit before Sony Pictures Classics’ release of Ang Lee’s “Crouching Tiger, Hidden Dragon,” although it recently saw “In the Bedroom” earn more than $36 million in its domestic release.

Although the company has had first-look deals with U, Fox Searchlight and Miramax, it never found a long-term scenario that gave it the financial security it needed with the creative control it demanded.

Held merger talks

Over the years, Good Machine held acquisition talks with Paramount Pictures, MGM and Intermedia, but they never came to terms.

Other pics Good Machine has produced are Lee’s “The Ice Storm,” Michel Gondry’s “Human Nature,” Bart Freundlich’s “The Myth of Fingerprints” and Todd Haynes’ “Safe.”

“We are excited about coming to Universal at a time of great opportunity for the growth and expansion of the specialty film business,” Linde and Schamus said in a statement. With the incredible support we’re receiving from Ron and Stacey, we look forward to making Focus the most dynamic and creative home for independent filmmakers in the business.”

Said Hope, “I’m looking forward to being in business with Universal, and joining its creative family. What a great combination of opportunities — finding a new home with a company that supports and nurtures filmmaker’s visions, while continuing to work with my good friends and partners at Good Machine.”

(Cathy Dunkley contributed to this report.)