When New York film investment broker Roland W. Betts brought his idea for Silver Screen Partners to Home Box Office nearly three years ago, he was welcomed with open arms.
No wonder. Betts offered to put together a limited partnership that would infuse HBO with $75 million in funds with which the voracious cable giant could shake and bake its own movies.
Eventually, this money would have to be paid back, Betts said, but not for five years. Five years!
It was as if someone delivered a vat of fresh blood to Count Dracula's door and said, "Can you use this stuff?"
Betts wasn't sure who would put up the money. Most brokers couldn't look their clients in the eye while suggesting they let someone use their money interest-free for five years, even with a money-back guarantee and the possibility of dividends.
But Betts figured this product was different. It had magic, style, glamour. Profit isn't everything. As he says: "It's a fun, fun industry. The broker can say to his client, 'You can't lose money, you may even make some.' The investors can put up $2,000 and go see 'Volunteers' with their best friends, elbow them in the ribs and say, 'That's my movie.' "
The deal was bullet-proof. HBO guaranteed 50% of Silver Screen's money for exclusive cable rights. Thorn EMI, a British firm, guaranteed 40% for foreign distribution and foreign TV and videocassette markets. Other income was guaranteed from domestic videocassette sales.
Within 60 days after Silver Screen made its offer (through E. F. Hutton) it had an oversubscribed $83 million in the bank and HBO, which had previously helped finance films by paying its licensing fees in advance, was suddenly competing with its suppliers.
"They (Silver Screen) put us in the movie business in a big way," says Maurice Singer, head of film production for HBO. "They provided us with the ability to be responsible for our own destiny."
The problem two years and three released movies later is that Silver Screen's investors haven't had all that much to elbow their friends in the ribs about.
The first HBO/Silver Screen film, "Flashpoint," was barely a blip on the box-office charts last year. Although this year's "Heaven Help Us" and "Volunteers" did better, neither generated the kind of heat that would drive a pharmacist out of his seat at the Bismarck Bijou shouting, "That's my movie!"
"Volunteers" was a disappointment, considering its cast. Early this summer, Tri-Star Pictures, which is distributing all of the HBO/Silver Screen movies, was hyping the Tom Hanks/John Candy comedy as one of the summer's likely blockbusters and managed to book its opening in more than 1,600 theaters.
After a month, the $13-million film has grossed $17.9 million. Not a disaster, but hardly a blockbuster either.
The rest of the HBO/Silver Screen slate: "Sweet Dreams," a biographical melodrama starring Jessica Lange as country singer Patsy Cline; "Head Office," a satire of corporate Angst starring Judge Reinhold and Jane Seymour; "Odd Jobs," a low-budget teen-age comedy, and "The Hitcher," a suspense drama starring Rutger Hauer and C. Thomas Howell.
There could be a rib-nudger in there yet. In the meantime, the investors will have to settle for what may simply end up being a good deal. Even though "Flashpoint" and "Heaven Help Us" did poorly at the box office, both are selling well on videotape.
According to Betts, Silver Screen's 13,000 limited partners have already had 20% of their money returned and will likely have all their money back before the five years are up. The partnership will continue for five years beyond that, Betts says, and monies earned from its film library during that time will be shared by all.
Anyway, Silver Screen worked so well that Betts has since made a similar, even larger arrangement with Disney. Silver Screen Partners II, the sequel, went on the market with a $100-million goal, and is reportedly already oversubscribed by more than $80 million.
Sources in the New York investment community say Silver Screen II may end up sweetening Disney's production pot by $200 million.
Betts won't say how much money the general partnership has taken in on Disney's behalf, but he estimates there will be more than 20,000 limited partners in the second group, with individual investments ranging from $2,000 to $500,000.
The difference between the two deals is control, Betts says. With HBO, the partnership participated in the film-making process, from approving properties to negotiating with Tri-Star for release dates. With Disney, he says, Silver Screen will be a passive partner.
"We feel the stature of the new management team at Disney is so strong, we didn't need to be involved (in creative decisions)," Betts says. "We were interested in Disney because the name is terrific, but we wouldn't have gone there if Michael Eisner (former head of Paramount Pictures) and Frank Wells (former head of Warner Bros.) hadn't gone over there first."
Over at HBO, Singer is hoping Silver Screen III is an HBO encore.
"We like to think we paved the way for (Disney)," Singer says. "We will probably go outside for funding again. I suspect that when we do, we'll go with Roland Betts and Silver Screen."
NEW DIRECTIONS: Stanley Kramer, who retreated to the Northwest to teach and write a newspaper column after his last film, "The Runner Stumbles," stumbled at the box office six years ago, is returning to the director's chair.
Kramer, who will be 72 Monday, has agreed to take over for Michael Anderson on "The Conspiracy," a thriller based on theories that Pope John Paul I was assassinated by agents of corrupt Vatican bankers and Italian right-wing extremists.
The film, being produced by Richard Martin, was to have begun production in Dubrovnik, Yugoslavia, in July, but was delayed several months, creating a schedule conflict for Anderson.
"The Conspiracy" will star Paul Scofield as Pope John Paul, Robert Mitchum as one of the Vatican conspirators and Christopher Walken as the American journalist who catches on to the plot.
Kramer, an Oscar nominee for both "Judgment at Nuremberg" and "Guess Who's Coming to Dinner," is said to be reworking the script with writer Bill Bairn. The film is now scheduled to begin shooting in January.