The Samaha syndrome

Feisty financier has become WB's biggest indie supplier

There are several ways to finance a movie. There are split-rights pacts, equity deals, tax incentives and pre-sales.

And then there’s Elie Samaha’s way, which nobody understands.

Judging by crates of celluloid, not by box office grosses, the irrepressible CEO of Franchise Pictures is one of the most prolific producers in showbiz.

Samaha produced seven movies last year, including “City By the Sea” and “Ballistic: Ecks vs. Sever,” and is putting the finishing touches on a 2003 slate that’s even bigger — despite the fact that just three Franchise pics have ever grossed more than $30 million at the domestic B.O.

Samaha, who has 3½ years left on Franchise’s first-look deal with Warner Bros., has long sparked controversy within the Warners family as an industry renegade who didn’t always follow industry protocol, and whose film output was inconsistent at best.

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Franchise’s ongoing litigation with German financier Intertainment is scheduled to go to trial in August.

Samaha is candid about his setbacks as a producer.

“I didn’t know much about Hollywood when I started,” he says. “But I’ve been learning. Nobody could learn everything in six years.”

And now the dry-cleaning and nightclub mogul is taking Franchise in a surprising new direction: He’s going upmarket. Under new supervision at Warners, he’s aligning the company with new talent and more prestigious material.

“Elie has been very cooperative in working with our people to develop films that would appeal to the wider marketplace and fit more comfortably with our release schedule,” says Warner Bros. president and chief operating officer Alan Horn.

The recent momentum at Franchise also owes something to Samaha’s adroitness at raising capital in a soft economy. At a time when the foreign markets have dried up, when so-called financing producers are scavenging for funds and studios are going cap in hand to foreign distribs to bankroll their slates, Samaha keeps coming up with coin.

Franchise is Warners’ largest supplier of independently financed films.

The results are mixed.

Later this year, Warners will release the Bruce Willis action comedy, “The Whole Ten Yards,” the sequel to “The Whole Nine Yards,” whose $100 million worldwide haul is Franchise’s most successful release to date.

But WB has also been stuck with pics like “FeardotCom” and “Battlefield Earth.”

Franchise has for years specialized in star vehicles that fell off the studio development slates, including labors of love that top actors couldn’t get financed elsewhere, like “Battlefield Earth.”

Samaha’s formula for producing these pics: rein in above-the-line costs through salary deferments for stars; use those star commitments to sell the pics overseas; keep a tight rein on below-the-line costs; and mine soft-money deals for off-balance-sheet financing.

Historically, Samaha hasn’t put a high premium on art. Since its inception, Franchise has been a bastion of generic mid-budget action movies, some going straight to video or cable.

But Samaha is now trying to migrate upstream.

The former B-movie king is developing some upscale movies — with actors like Anthony Hopkins, Catherine Zeta-Jones and Michael Douglas, the Wilson brothers and Kate Hudson and using source material by Hemingway, Dostoyevsky and David Mamet — in the hopes his 2003 report card will have some A’s.

Some highlights from Franchise’s development and production slate:

  • “Alex and Emma,” a romantic comedy starring Kate Hudson and Luke Wilson based on Dostoyevsky’s “The Gambler,” helmed by Rob Reiner, and set for release from Warners June 20.

  • “Monkeyface,” a heist movie starring Zeta-Jones and Douglas, and produced by Laura Bickford, set to start production in November.

  • “The Wendell Baker Story,” written by Luke Wilson and co-directed by Luke and Andrew Wilson, starring Luke and Owen Wilson. Mark Johnson is producing.

  • “Papa,” a drama about the life of Ernest Hemingway. Anthony Hopkins is attached.

  • “Tristan and Isolde,” a version of the classic romance which Ridley Scott will produce for Fox.

  • “Spartan,” a thriller written and directed by Mamet and produced by Art Linson.

  • “Rampart Scandal,” written and directed by Sylvester Stallone. Pic stars Suge Knight in a story about the LAPD’s Rampart scandal, and the murders of Biggie Smalls and Tupac Shakur.

Samaha’s new direction hasn’t changed the budgetary parameters of his pics. He’s committed to producing pics up to $100 million.

“They’re not always Oscar-caliber movies,” Samaha says, “and they’re not break-your-back, $150 million movies.”

Guided by a new collaborative strategy with WB, in which production chief Jeff Robinov and exec VP Kevin McCormick play an active role in Franchise development and production matters, Samaha’s new mantra is quality, not quantity.

The strategy appears to have had a beneficial effect on Franchise’s relationships with talent.

“The Warners executive group has been much more aggressive and involved with him in the selection of material, development and casting, and he’s welcomed it,” says William Morris president-chief executive officer Jim Wiatt.

“We’ve enjoyed a very successful relationship with him,” Wiatt adds. “He’s come through.”

Supporting Samaha’s new direction are two investors, construction magnate Ron Tudor and L.A. entrepreneur David Bergstein, who in January paid an eight-figure sum for a 45% stake in Franchise.

Franchise plays a key role for Warners, fleshing out the studio’s 25-pic slate, which is built around four or five tentpoles each year.

The studio has made a concerted effort to wring more successful pics from its deal with Franchise, says Horn.

“There are certain pictures he gave us that were rougher than others,” the exec adds. ” ‘FeardotCom’ was not my cup of tea. But over time, I’d like to think we’ve evolved to a place that’s more comfortable for the studio.”

Warner’s financial participation in the Franchise slate varies from project to project. On some, the studio provides only P&A; on others, the studio kicks in as much as 50% of the financing.

But at the end of the day, most of the risk belongs to Franchise. That’s put more pressure on Samaha to do what he does best: line up the financing schemes, which are often so complex and variable as to leave outsiders scratching their heads.

“We have a half-dozen soft-dollar equity deals,” says Bergstein.

In addition, Franchise just annoucned the formation of a U.K. distribution outfit which wil help it take advantage of British tax incentives.

The company has $250 million in an equity pool that will help finance the upcoming slate and $150 million in additional P&A money, per Bergstein.

Samaha, a former Studio 54 bouncer, takes pride in his prodigious output — especially in the face of lawsuits and a dicey economy.

“I’ve been a fighter my whole life,” he says. “The only way to stop me is to stop me from breathing.”

As his longtime friend Stallone puts it, “He’s a maverick. He’s the sort of person who would have made ‘Rocky’ 25 years ago. The industry should cultivate guys like this.”

Samaha’s Sunset Strip office is sparsely decorated. There’s a tank of tropical fish — and a plaque on his desk with a message that could serve as a logo for the indefatigable producer: “Either lead, follow or get out of the way.”