COLUMN ONE : Sea Epic’s Costs May Bring Wave of Caution : The soaring budget of ‘Waterworld’ could change the way Hollywood spends--or doesn’t spend--its money on high-priced films.

The elderly herbalist walked along the edge of Kawaihae Harbor on the Big Island of Hawaii sprinkling salt on the ground in a ritual handed down by his great-great grandmother.

Henry (Papa) Auwae motioned with a bamboo stick asking the gods to chase away the evil spirits and grant peace, love and harmony to the cast and crew assembled that summer day in 1994 to begin filming “Waterworld.”

He probably should have given it a double dose.

By the time principal filming had ended nine months later, “Waterworld” would become part of Hollywood lore--not only earning the unenviable distinction of being the most expensive movie ever made, but sending shock waves through the movie industry and a mighty studio.

As the film’s Friday opening approaches, sources say the total cost of “Waterworld” has soared past $200 million, including marketing and advertising--more than twice its original budget. (Neither Universal Pictures nor Kevin Costner, its star and one of its producers, would discuss the costs.)

The number is significant because the average studio movie now costs $34.3 million. But studios still roll the dice on big-budget productions such as Arnold Schwarzenegger’s 1994 action-thriller, “True Lies,” which cost $120 million and brought in $350 million worldwide. Still, that pales in comparison to “Waterworld.”

Regardless of its ultimate box office performance, “Waterworld” has created inflationary pressures on the business, say several agents and studio executives who have a hand in determining the cost of a movie. As a result, one agent said, “studios are significantly more resistant to funding the mega-blockbuster movie now.”

That does not necessarily mean that studios will shy away from big-budget productions. They will always bankroll movies with a built-in audience, such as the “Batman” franchise, or ones based on the works of authors such as Michael Crichton of “Jurassic Park” fame.

“It sounds simplistic,” said David Colden, an entertainment attorney who represents several top directors and screenwriters, “but I think now, more than ever, no one is going to do another $100 million-plus movie--unless the material is bankable.”

Unfortunately, determining what is bankable has never been an exact science.

As far as the studio itself, “Waterworld” would have such an impact on Universal Pictures’ financial operations that many in the movie industry speculate it played a part in the decision by Matsushita Electric Industrial Corp., the studio’s Japanese owner, to sell most of its holdings in MCA/Universal in June. That sale led to radical changes in the top echelons of MCA.

In “Waterworld,” the Earth has been flooded by melting polar icecaps. Costner plays a mysterious gilled human named the Mariner, who searches for dry land and battles the savage Smokers, led by Dennis Hopper, and hooks up with Jeanne Tripplehorn and young Tina Majorino.

Some who have had a sneak peek laud the computer-generated special effects and underwater sequences, comparing the movie to a Jules Verne yarn with the contemporary appeal of Indiana Jones. Others have been more critical, mocking its story line as “ ‘Planet of the Apes’ on water.”

Early reviews have been mixed. Predictions are that it probably will draw young men but its dark mood may turn off women and older audiences. It seems a long shot to break even; according to the industry’s conventional wisdom, it would have to make at least $400 million worldwide, which has been done by only a handful of films, including “E.T. The Extra-Terrestrial” and “Jurassic Park.”

Difficulties on Set

Why did “Waterworld” cost so much?

The filmmakers have blamed the tricky nature of shooting at sea--where sun, wind and ocean swells affect camera angles and lighting--for going over budget on their 166-day shooting schedule.

But others involved in the production say costs also escalated dramatically because of poor planning and outlays that sometimes proved to be penny-wise and pound-foolish.

For example, sources said, there were days when extras were asked to show up at 6 a.m. but waited until late afternoon for their scenes. Even as the cameras were rolling on the second act, they say, the writers and the star were scrambling to reshape the third.

One area of spending surprised many on the island: enhancing Hawaii’s floral beauty.

Patricia Tummons, who edits a monthly newsletter on the Big Island called Environmental Hawaii, said she was amused when the filmmakers brought in silk plants while shooting in Waipio, one of the island’s lushest valleys. A “Waterworld” spokesman said he was unaware that any fake plants were used.

Also, the costs of building sets, procuring a fleet of boats and staging explosions, as well as housing and feeding a crew that on some days ballooned to 600, reached $100 million, “Waterworld” sources said.

Consider the main set: a huge doughnut-shaped metal atoll that often was anchored outside Kawaihae Harbor. Weighing 1.68 million pounds, it was secured by four 15-ton anchors.

With winds on the water that could carry 200 tons of lateral force, the atoll was designed to swivel on the ocean surface and not tip over.

Two white 60-foot trimarans were flown in on a Boeing 747 from Luxembourg and, to the amazement of residents, were immediately transformed into unsightly vessels with olive drab paint and camouflage.

Production sources said that about $40 million was spent on “over-the-line” talent--expenditures for Costner, Hopper and Tripplehorn, director Kevin Reynolds, producers Costner, Chuck Gordon and John Davis and five screenwriters.

Costner is said to have been paid $17.5 million. Reynolds’ fee reportedly was $4 million. And the cost of the original screenplay and the numerous rewrites totaled about $7 million, a production source said.

In addition to the $40 million, the cost of post production has climbed to about $30 million, sources say, including $13 million for special effects that had been budgeted at $3 million.

In late April, Reynolds, weary of the long shoot in which Costner had ordered rewrites and directed scenes, handed in his director’s cut and quit--creating a major fissure in their longtime friendship. Since then, Costner has called the shots.

And after the previews, additional footage was ordered, including shots of sharks off Catalina Island in an attempt to add realism to scenes using fake sharks that had done poorly with audiences.

Production Snafus

Poor planning seemed to be a villain throughout the filming.

At first, the filmmakers spent money on research of the ocean bottom to determine the best locales. The part of the island where the film was shot, mostly in the harbor, was relatively desolate, so not much was known about weather conditions. Had the filmmakers paid for adequate research they would have learned that the area was subject to sudden 45 m.p.h. winds.

Nonetheless, the filmmakers decided that “Waterworld” was a go and began filming on June 27, 1994.

Some Universal executives were alarmed that only one full-blown production meeting was held during the first half of the shoot.

“It is ludicrous to have only one major production meeting on a film like this,” one production source said. “You have to keep up with every detail because when you’re shooting on water, the elements change so rapidly. But that is how it went from Day One.”

Days that would start out sunny would turn overcast and rainy. “A lot of times there wasn’t a backup plan” for shooting if the weather changed, one crew member recalled. It took months, he said, to film one key battle scene.

The delays added not only to cost overruns but frustrated the crew. And while Costner slept in an $1,800-a-night beachfront residence and had a yacht to rest in during breaks, many crew members were housed in un-insulated condos subject to 50-degree temperature swings.

“The crew was forced to stay in substandard housing, all in the guise of being economical,” said one executive. “That perpetuated hostilities and low morale.” Universal, he said, finally made the producers move them into better housing.

That attitude of only selectively counting pennies was fairly common, sources said. “They would trip over $100,000 to pick up a buck every other week,” said one high-placed production source.

Complaints then surfaced that “Waterworld” was being careless with the environment. Authorities determined that reports about special effects explosions killing whales and fish were untrue.

However, one incident raised the hackles of environmentalists.

A main, but smaller, set depicting a slave colony sank in 180 feet of water in January a quarter-mile outside the harbor.

“They just left the slave colony out in the water for several weeks,” a production source said. “Nobody took care of it. . . . It sank because of the constant pounding from the weather and the waves.”

According to one production source, a salvage company was hired to lift the set with air bags, but its bottom dragged along the coral bed. When it was pulled to shore, it gouged a deep channel through the reef.

“It made a 12-foot swathe a quarter-mile long through the coral reef,” said one crew member. “It was basically like driving a bulldozer under water.”

State officials said they viewed an underwater video and concluded that the dredging “did no environmental damage.” Environmentalists are not convinced.

Studio Shake-Up

While the question of environmental damage remains open to debate, there is no doubt that Universal bristled at the barrage of negative publicity about the film and its star.

Some agents and studio executives have gone so far as to draw comparisons between the latest happenings at Universal and the demise of United Artists--a direct fallout of its 1980 box office disaster, “Heaven’s Gate.”

They point to the recent shakeout of top brass at Universal after Matsushita sold its majority stake in MCA/Universal to Seagram’s Edgar Bronfman Jr.

Although one picture could not force the sale of a studio, some believe the movie’s out-of-control costs served as a signal to Matsushita that it did not really know the business. Lew Wasserman, the chairman and founder of MCA, recently was elevated to a figurehead position as chairman emeritus; Sid Sheinberg, Wasserman’s right hand, has become an independent producer on the Universal lot and Tom Pollock, formerly head of the studio, has been made vice chairman but as yet has no staff.

Production executives at rival studios say “Waterworld” has made them think before jumping into a big budget project.

Before green-lighting a movie that costs $100 million going in, they say, the star would have to have a track record.

Warner Bros. is considering producing “Crusade,” a pet period film project of action star Schwarzenegger. The estimated $90-million to $95-million price tag could be even higher because the movie requires building a set resembling medieval Jerusalem.

Warner’s has asked Peter MacGregor Scott, who produced “Batman Returns,” to check out locations but with an eye toward cutting the budget by about $15 million, sources said.

What made “Waterworld” such a risk for Universal was that Costner, unlike Schwarzenegger, is not known to his audience as an action star, but rather as a romantic leading man.

Another project that bears watching, industry sources say, is 20th Century Fox’s remake of the 1968 sci-fi classic “Planet of the Apes.” “That could be a runaway if we’re not careful,” one Fox source said. “Everyone, after what they’ve seen [with ‘Waterworld’], is afraid of any big movie that has the chance of getting out of control.”

While the industry ruminates over budget limits, it is the audience that will give them their final direction.

John Krier, head of Exhibitor Relations Inc., which tracks box offices, said exhibitors got an early peek at the movie and some, like himself, were “very impressed.”

“A couple of my friends couldn’t believe how much I liked it,” he said. “A couple of them hated it and some thought it was boring. In a way, you can almost feel the problems they had shooting this picture, but for me it didn’t matter.”

One rival studio executive said that even if “Waterworld” does charm audiences and hits it big at the box office, it is still an extreme example of what is plaguing the industry.

“You get seduced,” a studio official said. “I find it appalling that there are a lot of movies now that cost $70, $80, $90 million in negative costs. ‘Waterworld’ is $200 million. People now look you in the eye without blinking and say, ‘It’s $70 million’--as if it was a bargain.”

Welkos is a Times staff writer and Brennan is a free-lance writer.