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Lessons of indie war survivors

Nu Image @ 20

GALLERY: Top 10 worldwide Grossers

Until recently, Nu Image Films’ Wilshire Boulevard offices were funky, and not in a cool, hip James Brown way. There was dingy Linoleum in the lobby and scuffed walls holding a selection of posters that, while devoid of early Z-grade straight-to-video titles like “Cyborg Cop” and “Human Timebomb,” failed to properly convey the 20-year-old company’s move upmarket with big-budget action films like “The Expendables” and its sequel and star-driven comedies and dramas such as the upcoming “The Paperboy,” with Nicole Kidman, and “The Big Wedding” with Robert De Niro and Diane Keaton.

In the spring, Mark Gill, who joined the company as president of its Millennium Films division in July 2011, persuaded co-founders Avi Lerner and Trevor Short it was time Nu Image’s surroundings better reflected the company’s ambitions. The changes were modest — new paint, carpets, tile, updated posters and tinted glass in the atrium lobby so waiting guests would no longer be fried by the sun — but the effect was impressive nonetheless.

When Gabriele Muccino, director of their upcoming film “Playing for Keeps,” saw the revamp, “he said, ‘Wow, it looks like a real studio now!'” recalls Gill.

But Lerner insists the change is truly cosmetic.

“The trick is the same trick,” says Lerner, the company’s chairman, a blunt Israeli who often pauses to translate his thoughts into English. “We are about making movies that make money. If this comes with the prestige part of it, the fact that maybe there will be an Oscar, a Golden Globe or an award in Venice, Cannes or Sundance, it’s OK. If we don’t get it, it’s also OK.”

The company maintains that the move toward bigger, more critic-friendly films is all about the bottom line.

Those $2 million to $4 million bargain-bin titles Nu Image churned out in the ’90s consistently produced 100% profit margins, “and, make no mistake,” Short says, “if that business still existed, we would still be doing it, hand over fist.”

But that business has been hammered by declining DVD sales and fading foreign presales in recent years. Nu Image still negates as much risk as possible presales to foreign distributors, but there is more focus on story quality, big name casts and high production values.

In order to deliver this, Nu Image has been focusing on the mid-budget-range niche largely abandoned by the studios. It manages to produce Millennium’s films cheaper than its bigger counterparts by taking advantage of domestic tax credits or shooting in Eastern European countries with cheap labor. Lerner is known for driving hard bargains with talent, both above and below the line.

“We pay a stunt coordinator less than a quarter of what he gets from the studio,” boasts Lerner, who began his film career running a drive-in in his native Israel. “We asked him, ‘Why do you agree to work with us for $4,000 when you get $20,000 from the studio?’ He said, ‘I work maybe three months with the studio, and then I’ve got nine months I’ve got to work.'”

Although Nu Image has always displayed a strong fiscal discipline, it was more impulsive when it came to vetting story quality.

“We could have coffee somewhere and decide, within three days we start the movie, and the script wouldn’t be ready yet,” says company’s longtime head of development, Boaz Davidson. “It was a lot of gut feelings.”

Now, the company has Gill — who during previous stints at Miramax and Warner Independent had a hand in acclaimed films such as “In the Bedroom,” “March of the Penguins” and “Good Night, and Good Luck” — making sure the story points are in order. But it’s still the fastest greenlight in town.

“We don’t need 2 million meetings or go from one executive to another,” Davidson says.

The biggest change is the absence of co-founder and de facto sales chief Danny Dimbort, who left to join Red Granite Films in May 2011, yet remains a partner in the company.

“Because we are family, all of us, it wasn’t and still isn’t easy,” Davidson says, “the fact that Danny is not here.”

The company has seen some other setbacks over the years, from the collapse of its acquisition First Look Pictures to the box office failure of last year’s “Conan the Barbarian” and “Drive Angry,” starring Nicolas Cage.

But the business rolls on. In May, Nu Image closed a three-year, $100 million co-financing/co-production agreement with West Coast Film Partners that calls for them to produce two to three wide-release feature films per year, the first of which is “Olympus Has Fallen.” Nu Image is also in the process of securing a P&A fund to pay for the marketing of its theatrical releases.

“It gives you a great deal more leverage, latitude and freedom in who negotiate with, how you negotiate and what kind of deal you can do,” says Short, who serves as the company’s CFO. “Because you’re taking a huge obstacle,” tens of millions of dollars in marketing costs, “away for the potential distribution company.”

While Nu Image becomes more like a conventional studio every day, Lerner is quick to point out how much it differs from power-suited counterparts lunching around town.

“It’s very simple: we understand making movies,” says Lerner, who has more than 350 films to his credit. “Some of the executives in the top studios have never been on a set. They don’t understand the difference between a gaffer and a grip.”

TIMELINE: From Jo’berg to big B.O. bets

1992:
Avi Lerner moves to Los Angeles to establish Nu Image with partners Danny Dimbort, Trevor Short and Danny Lerner. Lerner, who sold South Africa-based Nu Metro Entertainment Group to MGM, plans to produce movies for the booming direct-to-video market.

1993:
Nu Image releases “Lethal Ninja,” a movie involving a sadistic Nazi, and “Cyborg Cop,” about a former DEA agent whose brother has been turned into a cyborg.

1996:
Nu Image partners with producer Elie Samaha and October Films on a slate of $8 million to $30 million projects under the Millennium Films banner.

1997:
Nu Image forges a first-look deal with Miramax on Millennium Films. Samaha exits.

2001:
Nu Image/Millennium inks a financing and distribution deal with Emmett/Furla Productions. The group would team together on “Righteous Kill,” “Bad Lieutenant” and “Rambo.”

2005:
Nu Image taps into coin from Equity Pictures to fund a series of bigger budget films, including “88 Minutes” and “The Black Dahlia.”

2006:
Nu Image buys state-run Boyana production facility in Bulgaria, renames it Nu Boyana.

2007:
Company buys First Look Studios, gaining access to its 700-film library.

2011:
April:
The company opens Millennium Studios, a state-of-the-art production facility in the Shreveport, La.
May:
Co-founder Danny Dimbort exits to Red Granite, taking with him Christian Mercuri, president of international sales, and Joe Gatta, head of Millennium Films. Dimbort remains part owner in Nu Image.
July:
Mark Gill, a veteran of Miramax and Warner Independent, joins the company as president of the company’s Millennium Films banner, charged with helping produce higher-quality movies.

Nu Image @ 20
Lessons of indie war survivors | Duo disdain prestige without discipline | Gill leads Millenium’s upgraded pic slate | Meet the key players | Lerner: ‘The Grey Zone’ is my favorite mistake | Sharp shots happen on their own backlots
GALLERY: Top 10 worldwide Grossers

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