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Budget Fever Over Spike Lee Film : Entertainment: A completion bond firm now has the legal power to finish ‘Malcolm X.’ The movie is $5 million over budget.

TIMES STAFF WRITER

A completion bond company has assumed control of director Spike Lee’s film “Malcolm X” after production costs climbed as much as $5 million over the original $28-million budget, The Times has learned.

The move by Completion Bond Co.--a Century City firm that insures investors against films going over budget and over schedule--means the company now has the legal power to finish the movie itself in order to deliver it by year’s end to its distributor, Warner Bros.

The company says, nonetheless, that Lee will retain creative control of “Malcolm X.” But the noted director must adhere to stringent cost-cutting measures while the three-hour movie winds its way through its months-long post-production phrase.

“He is being held on a financial short rein,” said a source close to Lee, who could not be reached for comment Wednesday.

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Backers of many films are protected by completion bonds. But only a small percentage of movies are taken over by the bond companies, which are reluctant to assume control of over-budget films--both because it is disruptive and because they must then pay the costs of finishing the films.

“Malcolm X,” Lee’s most costly film project to date, is an adaptation of “The Autobiography of Malcolm X,” starring Denzel Washington as the charismatic Black Muslim leader. The film began principal shooting last fall in Harlem, Upstate New York and, eventually, Egypt and South Africa.

Lee himself has described it as an “epic picture . . . on the scale of the great films that David Lean did,” a reference to the director of “Lawrence of Arabia” and “Dr. Zhivago.”

“They did go over budget,” said Joan Stigliano, director of business affairs for Completion Bond Co., which took over the film production in December, as the director was wrapping up filming in New York City. “We have to complete and deliver the movie . . . and we’ve got people watching production.”

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Co-producer Marvin Worth said the takeover of “Malcolm X” had not interrupted filming. “It just caused us some extra work, but we’ve shot everything we wanted to shoot,” he said.

Sources explained that the cost overruns were allowed to reach $5 million in part because Lee had assured the bond company that he was searching for an investor to cover the excess. That didn’t happen, however; Lee is still looking for backers and is saying he’d consider giving up a portion of his profit share as an enticement.

“He would still like to get someone else to come in to make up the shortfall, even if it costs him personal profits,” said a source close to Lee’s production company, 40 Acres & a Mule Filmworks. “He doesn’t want the bond company to bite the bullet. . . . It’s the first time any of Spike’s movies have gone over budget.”

While the film was budgeted at $28 million, Lee has said he believed that it would cost much more.

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“Spike has been talking about a $33-million epic version of the life of Malcolm X for a long time, and that is what he always intended to do,” said one of Lee’s co-workers, who asked not to be identified.

The bond company made a “big mistake” when it agreed to insure the movie at $28 million, said another source close to Lee.

“It couldn’t really be done for that,” he said, noting that the 176-page script called for huge period sets, mass rallies and distant location shoots. “But the bond company OKd it. They had a budget and a screenplay. I was surprised, to tell you the truth.”

Worth said there were no racial overtones to the takeover of Lee’s film. His movies, including “Jungle Fever” and “Do the Right Thing,” have addressed sensitive racial issues. A Warner Bros. source added that the move was purely financial.

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Completion Bond Co., which is owned by Transamerica Corp., also insured Barbra Streisand’s 1983 directorial debut, “Yentl.” The company took over in post-production, paying more than $1 million to finish the film. Completion Bond also provided coverage for such films as “Driving Miss Daisy,” “A Passage to India” and “The Last Emperor.”

Stigliano said it is rare for her company to take over a production. “It’s less than 1% of the time, and we’ve been in business for 10 years,” she said.

A competitor, Film Finances, took over Terry Gilliam’s “The Adventures of Baron Munchausen.” Originally budgeted at $25 million, “Munchausen” was completed for $46 million--$15 million of that the bond company’s money.

In the case of “Malcolm X,” Warner Bros. has agreed to buy the film for North American distribution and has announced plans to release it during the Thanksgiving-Christmas holiday season. For Warner Bros., the movie is a “negative pick-up,” meaning that although the studio has agreed to buy the finished product, it has not yet invested any money.

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This procedure has become more common since the fiasco of “Heaven’s Gate,” which United Artists made for $36 million--about $29.5-million over budget.

Sources close to Lee said the film began sustaining cost overruns in the early weeks of shooting.

“During the first 11 weeks of shooting in New York, we went one week over schedule,” one of Lee’s associates recalled. “We had several large scenes that (required) a great deal of construction costs.

“Every day of the shoot, there was another huge scene,” he added. “We had a 1940s ballroom, huge rallies with thousands of extras, and Harlem streets that had to be re-created for the 1940s, ‘50s and ‘60s.”

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The budget soon became a concern for the bond company, whose representatives held discussions with Lee and his team about how much filming was needed in Africa.

Although the bond company did not bar Lee from traveling to Africa, it expressed concern over the size of his entourage and the time that the trip would take.


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