TURNER, MGM: WHAT HATH MOGUL BOUGHT?

The deal had just been closed and Ted Turner was in an ebullient mood. After losing his bid to buy CBS, Turner was about to become owner of MGM/UA Entertainment Co., expanding his media web to include one of the eight major studios.

Gathering MGM’s top executives on a Monday morning in early August, Turner quickly assured them that their jobs were secure. But he made it clear that he wanted MGM to return to making family-oriented movies. “I’m not going to tell you guys how to do your job,” one observer quoted Turner as saying, “but I think we should be making more epic movies that appeal to the whole family--movies like ‘Shane’ and ‘Gone With the Wind.’ ”

Later that week at a follow-up meeting, David Gerber, president of the Television-Broadcast Group for MGM, stood up and announced that Turner’s mandate would be hard to carry out. “We have to try harder around here,” he said, “not because we’re No. 2, but because we’re No. 8.”

The remark drew nervous waves of laughter, but, like every good joke, it contained a measure of truth. Ted Turner was a year old in 1939 when his favorite movie was released. “Gone With the Wind” captured nine Oscars and MGM was a dominant force in Hollywood (the Atlanta-based Turner later named his son Rhett). In 1939, MGM offered up four of the 10 films nominated for best picture. (“Gone With the Wind” won. MGM’s other three contenders were “Goodbye, Mr. Chips,” “The Wizard of Oz” and “Ninotchka.”)

But what sort of studio has Turner purchased today? It is clear that he has acquired a library packed with film classics that will fuel his satellite network with programming for years. (The deal landed him 2,400 film titles, including “Oz” and “Singing in the Rain,” along with a variety of television programs made under the MGM logo, including “Fame.”)

He also has purchased a debt-laden (about $565 million total) studio that in recent years has been in constant turmoil. Turnover within upper management has led to six different production heads (between MGM and UA) since 1980. Even in the mercurial world of the movie business, that is considered a dangerously high rate, and it has has had a devastating effect on the product pipeline at the studio.

There may be even more changes to come: One current rumor says that Universal Chairman Frank Price may move to head up UA. According to high-ranking insiders at Universal, Price and Turner had dinner together recently. (Price did not return a reporter’s calls.) Industry insiders also expect producer Ray Stark, said to be disenchanted with management at Columbia, to move his operation from the Columbia lot to MGM, where he will be near close friend Turner. Earlier this year the two announced they were forming a partnership, called Turnstar, but nothing ever seemed to come of it.

According to industry analyst A. D. Murphy, MGM has consistently ranked near the bottom of the eight major studios in terms of market share for the last three years. This year looks to be no exception. As of late August, MGM had earned a mere 5.5% of total box-office receipts for the year. Murphy argues that the rapid turnover has led to diminishing returns. “Every time they have one of those big changes at the top, all of the movies in development at the time go right out the door,” says Murphy. “And MGM remains in the cellar.”

It has been a rather empty cellar. With the exception of two annual evergreens--a Rocky movie and a Bond film--and occasional bona-fide hits like “Poltergeist” and “WarGames,” the studio has had little luck with its own movies, and in the last two years has filled its distribution system largely with “pickups,” movies distributed but not produced by the studio. Failed movies, such as “Reckless,” “Electric Dreams” and “Ice Pirates” in 1984 and “Heavenly Bodies,” “Cat’s Eye” and “Gymkata” this year, have hurt the studio’s credibility with exhibitors. “They’ve had so many bad films they can’t muscle their way into the good theaters,” says one producer currently making a film at MGM. “You can’t run a distribution system on two movies a year.”

The combination of little in-house product and poor box-office performance has also had an effect on the creative community. MGM/UA today is no longer perceived by leading agents, writers or producers as a first-choice lot to make a movie. “They are kind of medium players,” says one rival studio head. “Let’s put it this way: I don’t bump into (compete with) them on deals very often. They have kind of become the last stop on the list.”

Says one prominent literary agent, who insisted on anonymity: “Until we see what happens with Turner, I wouldn’t put any of my top clients at the studio right now. What’s the point of locking a client into a one- or two-year situation when no one knows what’s going to happen there?”

That kind of confusion has existed at MGM/UA since TransAmerica sold United Artists to MGM in March, 1981, for $380 million in the wake of the “Heaven’s Gate” debacle. First, David Begelman was brought in to oversee production for the two divisions (movies were arbitrarily assigned the MGM or UA logo), but a string of nearly a dozen failures, such as the $30-million musical flop “Pennies From Heaven” and “Cannery Row,” led to his departure in July, 1982. Later, Donald Sipes and Freddie Fields held brief tenures as heads of production.

In February of this year, chairman Frank Rothman brought in producer Frank Yablans, a former head of Paramount Pictures. But after a series of box-office disappointments, including the highly touted “2010,” “Teachers” and “Ice Pirates,” Rothman and the board chose Alan Ladd Jr. as president to help resurrect the studio. Ladd, an industry veteran who ran 20th Century Fox in the mid-’70s when that studio was red-hot with hits like “Star Wars,” was brought in initially to run the United Artists division of the company while Frank Yablans would continue to oversee MGM. But by March, Yablans, suffering from the fallout on “2010,” had resigned. The $40-million movie he had predicted would be a major hit barely broke into the black.

In the end, “2010” was certainly no bomb, but top executives had hyped the film so much that its returns were considered a disappointment. One executive recalled Rothman predicting to a television news crew that the movie would gross more than $125 million. After Yablans saw a rough cut of the movie, he reportedly told marketing executives he hadn’t been so excited about a film since his first viewing of “The Godfather.”

The constant turnover at the studio has made it virtually impossible for MGM to establish so-called “accounts” with star players. Warner Bros., for example, annually releases a Clint Eastwood film and regularly has a Goldie Hawn movie. Paramount has Eddie Murphy, the “Raiders of the Lost Ark” movies and now several John Hughes movies a year. Universal has Spielberg. But with the exception of the Rocky and Bond movies (UA movies that will be part of Kerkorian’s library, not Turner’s), MGM has been unable to solidify similar relationships. “If you look at successful studios, they’re the ones with stabilized management,” says Irwin Winkler, co-producer of the Rocky films. “If you’ve got a great script, the thinking is let’s go somewhere where we know the people will be there in six months.”

With Ladd’s team in place, including Jay Kanter as president of MGM and Richard Berger, former head of production at Disney, as president of UA, stability, it seemed, had finally come to MGM. Now, just nine months after the new team arrived, Turner has come knocking--and now the uncertainty over who will be calling the creative shots at the studio has observers wondering just how long the current team will remain in place.

“It depends on how Turner wants to run the company,” says producer Joe Roth, currently shooting “Lazaro” in Brazil for MGM. “If he wants to run it hands-on, based on his philosophy, I don’t think it would matter who was in there; it would be a losing proposition. We have not had a hands-on owner who tried to implement his own political or social beliefs onto a program for years. That wouldn’t bode well for anybody.”

Whether or not Turner’s influence will extend to the political or social content of MGM movies is problematic. Both Turner and top MGM executives refused to be interviewed for this story, but a recently delivered 8-K (financial disclosure) filing with the Securities and Exchange Commission explained Turner’s “total managerial right and authority of ownership.”

The filing states in specific terms that MGM/UA cannot commence development or acquire rights to a project on any picture or TV program without the prior approval of a representative from Turner Broadcasting System. Whether or not that filing is taken literally in the day-to-day operation of the studio is still an open question. Chairman and Chief Executive Officer Rothman told the trade paper Variety that the filing was just a “protective backstop against damaging an investment” and that the day-to-day decisions remain in the hands of the Ladd team.

Those who have worked with Ladd in the past say he is an independent thinker who likes to go with his own instincts and needs autonomy. “Alan Ladd will always make the kinds of films he wants to,” says Peter Hyams, director of “2010” and now scheduled to direct “Running Scared” for MGM. “To me, MGM is Alan Ladd. He is the person who decides what films they will make.”

Hyams also believes that Turner’s arrival on the lot may be a blessing. “Turner is a bit of a showman. If he treats this place the way he treats his TV empire and his baseball team, the infusion of money, showmanship and flair can only bode well for the studio.”

But others wonder whether Ladd, whose risk-taking creative vision has produced such gambles as “Star 80” and “The Right Stuff,” will be comfortable working for the conservative-thinking Turner.

Friends say Ladd could never have anticipated what he was getting into when he accepted the job of studio head in January. “Alan was brought in to bring some solidity and good sense to what was a very mercurial situation,” says one high-ranking MGM executive. “The only thing that would make him go would be if the situation changes too radically. After all, there are only eight studios and he’s running one of them.”

In early August, MGM/UA released a seven-page press release outlining a $175-million production budget that would help fund 10 movies. The films ranged from “Rocky IV,” the already much-hyped battle between Rocky and a Soviet set to open in November, to a comedy called “Bobo,” starring Howie Mandel, and Peter Bogdanovich’s next film, “Whereabouts.”

Of the 10, three were Dino De Laurentiis productions--pickups the studio is merely distributing. In fact, in the last two years, the studio agreed to distribute films from both the Cannon Group, then from Dino De Laurentiis Presentations, which included the successful “Red Sonja” and now the not-so-successful “Year of the Dragon.”

Of the Cannon deal (MGM distributed movies like “Sahara” for a share of the revenues), one producer noted: “That was an indication of how desperate they were (MGM) to keep the distribution system intact.”

Eventually, disagreements over the handling of the X-rated “Bolero” (which the studio never did distribute) led to the disintegration of the deal.

With Ladd and his team firmly in place after five years of instability at MGM, the pendulum started to swing. Since his arrival in January, Ladd and company have put 60 projects into development and his underlings are busy assuring the dealmakers of Hollywood that it’s still business as usual at the studio. “I’m still talking to the same directors, writers and producers as before” (before Turner bought the studio), says one vice president.

Producer Craig Zadan can attest to that. Zadan has a deal at MGM to produce a non-musical movie suggested by “Brigadoon,” which is owned by MGM. The so-called “Brigadoon project” was actually initiated under the Yablans team. The idea was so well received by the Ladd crew that the project survived, a rare occurrence when a new regime takes over. “We were concerned at first, but the truth is I don’t think anybody knows what’s going to happen there,” says Zadan. “If you didn’t know what was happening with Turner, the studio would seem completely normal. It’s the kind of place you’d want to make a movie.”

The Brigadoon project is probably a safe bet to survive at Turner’s new studio. Though he hasn’t mentioned it yet, insiders say “Brigadoon” is Ted Turner’s kind of movie. “Brigadoon,” like “Shane,” might well come back.