Taking a risk, checking it twice

Smaller, edgy fare bolsters tentpoles

Last year, Fox’s international box office hit a record-breaking $1.07 billion (including specialty arm Fox Searchlight). This year, the company is poised to break that record again.

Apparently, risk-taking pays off.

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Rupert Murdoch is hands-off when it comes to 20th Century Fox and Fox Searchlight, but both reflect the Murdoch/ Peter Chernin mantra: Success comes from exec continuity and risk-taking.

Some of the risks pay off handsomely, such as 20th’s “X2” and Searchlight acquisition “28 Days Later.” Other bold moves, like “The League of Extraordinary Gentlemen,” don’t catch fire, but that film will nonetheless prove profitable for the studio.

Under Searchlight prexy of production Peter Rice, that division’s box office climbed 200% last year over 2001. Collectively, domestic grosses topped $135 million — the best in the unit’s nine years of existence.

Rice attributes part of the success to stability.

“I’ve been here eight years. (Marketing prexy) Nancy Utley has been here (at Fox) for 15,” Rice observes. “There is a level of trust and comfort, but there’s also an incredible shorthand among colleagues. It’s a very stable company that way.”

But other stable companies haven’t been this successful.

Under the oversight of Chernin, 20th and Searchlight have taken financial and artistic risks. Even the corporate structure was considered risky: When Jim Gianopulos and Tom Rothman were named co-chairmen of the Fox studio, many were skeptical of the shared duties. But the two form a good balance.

Similarly, the risk-taking is balanced by prudence. “If you take creative risks all of the time, or none of the time, you will fail,” Gianopulos asserts.

So the chance-taking is offset by “safer” moves: lower-budgeted comedies (“Just Married”) and thrillers (“One Hour Photo”) and an ability to keep a lid on ever-rising marketing costs and ever-hungrier gross participants.

  • For “Master and Commander,” Fox has assumed 50% of the costs, while the other half is split evenly between Universal Pictures and Miramax Films.

  • At a time when franchises like Sony’s costly “Men in Black” sequel make little financial sense (most of the gross goes to producers, directors and stars), Fox’s “X2” had no gross participants at all, according to Rothman.

And the studio is working on another bold move. It’s angling for the affections of Pixar, the CGI animation house that’s had a perfect batting average, with all five of its toon features turning into mega-hits.

Should a Disney-Pixar deal not be made this year, Fox may seize the occasion to expand beyond the success of its own Blue Sky hit “Ice Age.”

Considering the good will that the studio enjoys with maverick and entrepreneurial filmmakers like George Lucas, Mel Gibson and James Cameron, Fox may stand an excellent chance of seducing the mercurial Steve Jobs, too.

Fox’s biggest success in 2003 has been the $214 million domestic grosser “X2.” But B.O. numbers tell only part of the story. Autonomy at the studio meant that the pic was given “almost an extra year to get the script right,” Rothman says.

“Phone Booth,” a smallish sniper-thriller starring Colin Farrell, has already taken in $46 million domestically. It cost only $13 million.

This is not to say the road has been without bumps.

The $80 million budgeted “League of Extraordinary Gentlemen” was to have been the studio’s Next Big Franchise but will instead manage only modest profits. Still, using Allan Moore’s darkly ingenious graphic novel as the basis for a big-budget studio film is creative and laudable, particularly in a summer of several bland, “safe” sequels that proved to be otherwise.

Similarly, Fox 2000 romancer “Down With Love” produced tepid grosses and lukewarm reviews, as did the flop “American Idol” spinoff, “From Justin to Kelly,” but neither is likely to end up on critics’ “worst pics” lists, either.

Searchlight shines

As for Searchlight, Rothman knows the specialized territory: He created the division.

“There’s such audience fragmentation right now,” says Rothman, slinking down further into his armchair at the mere thought of it.

“Consider ‘Bend it Like Beckham’ and ’28 Days Later.’ Those audiences have nothing in common, except one thing: they’re adventurous. And you’re not going to get them with a carpet-bombing technique.”

Yet, a big part of the Searchlight success story is the ability to leverage the strength of a carpet-bombing corporate parent like Fox proper.

Sensing the growing appetite for the Danny Boyle British horror pic, Fox distrib prexy Bruce Snyder moved to get “28 Days Later” (now cruising past the $40 million domestic gross mark) onto more than 1,200 screens — something most specialty labels can only dream of.

This is exactly the kind of flexible response to moviemaking that was thought long lost, and it’s a division that Murdoch is immensely proud of, reaping substantial grosses from relatively tiny $1 million to $15 million investments.

And in November, Searchlight may provide more than just substantial grosses: It will release Jim Sheridan’s “In America” as 20th unspools Peter Weir’s “Master and Commander.” The studio believes that both are best picture Oscar contenders — though Searchlight’s “America” will have cost less than a 10th of what “Master” did.