Polygram Catches Film Festival’s Eye

Michael Kuhn, president of Polygram Filmed Entertainment, wears one of those expensive designer watches that simultaneously tells the hour in two time zones. That’s often an affectation, though in his case, it may be one of the only ways of keeping tabs on his complex web of companies.

Polygram’s film operations are so decentralized that they almost defy description, stretching from London to Los Angeles and across six small, independently managed production labels with different distributors. The structure has drawn criticism from Wall Street and Hollywood in the past, but lately, it has been gaining converts.

Polygram’s eclectic mix of film projects won kudos from the creative community at the just-ended Cannes Film Festival, even though Polygram had nothing entered in competition.

The company had to turn people away from its raucous party for “Posse” (which has taken in a healthy $10.3 million in the United States so far) in a villa above Cannes last week. The $10-million production is the first release from Gramercy Pictures, a co-venture with Universal Pictures.

There was also plenty of festival buzz around “The Hudsucker Proxy,” a $25-million movie from the Coen brothers starring Paul Newman and Tim Robbins that is being co-produced by Polygram’s British-based Working Title.

The company’s other production labels are Interscope, Propaganda, Egg and A&M.; Kuhn says the system works because no single person’s taste dominates the creative process. Actress Jodie Foster makes decisions at her Egg productions, for instance, while producers Ted Field and Bob Cort (“The Hand That Rocks the Cradle”) call the shots at Interscope.

The company’s management structure also protects it from the financial pitfalls that have plagued so many foreign investors in Hollywood, Kuhn said. “I’d like to see someone peddle an old script to Jodie Foster or a worn-out concept to Interscope,” he said.

Kuhn’s short-term goal is to produce between 15 and 20 movies a year. He calls himself the “center of gravity” of the various labels. As business chief, he runs the numbers to see if a film is likely to recoup its cost, and guards against any two of the labels pursuing similar projects.

“I don’t green-light movies,” he said over breakfast in Cannes. “I just make sure our companies are making the number of movies I expect from them within the financial parameters ($8 million to $20 million) we’ve set.”

In that sense, the film division closely resembles its parent, London-based record giant Polygram, where no single label dominates sales. Polygram Chairman Alain Levy has said he may allocate as much as $1 billion to film operations over the next decade. The company ultimately plans to stitch together a full-blown studio operation out of the patchwork of companies.

Kuhn sees Polygram closing in on that goal as early as 1996, when agreements with several outside distributors will expire. By then, the company expects to have its own domestic distribution organization and to have acquired a major film library, though Kuhn would not say where he’s looking.

Plans also call for further diversifying film content. Kuhn, for instance, said he may convert A&M; into a label specializing in black-directed movies featuring black actors.

Polygram hasn’t truly hit it big at the box office yet. Its most successful film, “Candy Man,” grossed $25 million domestically. Wall Street seems to be warming to the company’s strategy, however.

The Hollywood trade paper Variety reported last week that two top Wall Street analysts recently recommended the parent company’s stock. PaineWebber analyst Christopher Dixon, for one, praised Polygram’s cautious entry into the film business.

Other analysts have warned that film operations could be a drain on overall revenue for years to come, but Kuhn says they are “ill-informed.”

“I don’t expect respect,” Kuhn said. “That comes from achievement, but people have to realize that there’s no quick way to get into this business. You can’t buy your way in. You just have to be patient.”

Briefly . . .

The world’s most famous film festival always produces memorable moments. Here are a few:

Strangest sound: Hundreds of French onlookers shouting, “Leeez! Leeez Taylor!” outside a hotel where the actress was addressing a press conference.

Most fun duo: Actor/director Mario Van Peebles and his father, Melvin, who ruled the dance floor at the party for “Posse.”

Most significant sighting: United Artists/Orion Pictures founder and all-around Hollywood legend Arthur Krim and his wife, Mathilde, quietly holding court at a corner table at a fund-raiser. The American Foundation for AIDS Research raised almost $1 million with a screening of the Sylvester Stallone film “Cliffhanger” and dinner at the internationally known restaurant Les Moulin de Mougins.

Most visible executive: Former CBS Records chief Walter Yetnikoff. Where: Everywhere.