Company Town : Real Key Is How Goldwyn Is Treated
These are highly emotional times for Sam Goldwyn Jr.
Because of financial strains, the 69-year-old son of the legendary mogul is being forced to sell off his 16-year-old company, which has produced and distributed such critically acclaimed films as “The Madness of King George,” “Much Ado About Nothing,” “Eat, Drink, Man, Woman” and “sex, lies and videotape.”
Sources predict that within weeks, Samuel Goldwyn Co.--of which Goldwyn owns 64.5%--will be in the hands of a new owner, possibly PolyGram, Ted Turner, Disney, MCA or, less likely, Viacom’s Paramount. At the moment, it looks like PolyGram and Turner are the front-runners.
While the price being talked about is about $143 million--$63 million in debt and $80 million in equity--money is far from being the only issue in the consummation of a deal.
Goldwyn himself is a big consideration.
“Nobody’s going to break their back over this,” said one source, explaining that while none of the suitors are likely to overpay for the company, “how Goldwyn gets treated is the real key.”
Goldwyn, who is refusing all interviews, apparently wants assurances from any buyer that the company will be maintained as a going production concern and not just gobbled up for its film and TV libraries and its valuable theater holdings. He and company President Meyer Gottlieb, who owns 3.3%, would ideally like Goldwyn to function as an autonomous concern much like Disney’s Miramax or the Turner-owned New Line Cinema and Castle Rock, with themselves remaining at the helm.
“Short of that, it depends on the buyer,” said a source close to the two.
As the last major independent to sell to a deeper-pocketed owner, Goldwyn has been reluctant to relinquish the company he has built up over the past decade. Only when it became painfully clear that the company’s heavy bank debt, a string of costly box office flops including “The Perez Family,” and failed attempts to lure a European partner had forced the issue, did Goldwyn face the inevitable.
The suitors for the company are most interested in the film and TV holdings and the 128-screen Landmark Theaters art-house chain, which has an annual operating profit of about $5 million. One source valued the theater holdings at more than $50 million.
Aside from satisfying Goldwyn, the biggest problem for potential buyers is getting a true valuation of the library.
“It’s a difficult deal to make work,” said one industry source, mainly because of the library. Seventy-five of the movie titles are classics from Goldwyn Sr.'s estate, including “Wuthering Heights,” which are controlled by the family trust. Since the company only has distribution rights to those films, a buyer would have to negotiate separately with the trust (owned by Goldwyn and his wife) to actually own the copyrights.
The main Goldwyn library consists of 358 titles, while the Heritage Entertainment library, which the company acquired in 1991, has less viable movie offerings like “King Kong vs. Godzilla” but valuable TV episodes of “Flipper” and “Gentle Ben.” Then there is the 411-title Rank Film Library, to which Goldwyn owns only distribution rights. While it includes some Alfred Hitchcock films, a source said many of the titles are “very obscure, arcane and highly uncommercial.”
About three years ago, Charles Evans--the 69-year-old real estate magnate brother of Hollywood producer Robert Evans--did something his friends thought was absolutely nuts.
He had just come from a lunch with Joe Eszterhas at Le Dome, where the gonzo screenwriter pitched him a movie idea about Las Vegas showgirls. Paul Verhoeven, also at the lunch, said he’d be very interested in directing the project if the script were as enticing as the pitch.
Evans was sold. He immediately wired $2 million in cash directly into Eszterhas’ bank account and, as they say in Hollywood, it was a done deal. “Showgirls” was born.
“I thought if you could make a movie with the combination of these two people, it was a very prudent investment,” said Evans, a native New Yorker in town last week to visit his brother Bob, his producer son Charles Evans Jr. and to see a screening of “Showgirls.”
In an interview at his suite at the newly refurbished Beverly Hills Hotel, Evans recalled: “My friends told me I was crazy to put this money in because any investment in the film business is considered cavalier. But I don’t believe in generalizations, and I put my money where my mouth was.”
Even before the film’s upcoming nationwide release this fall, the risk paid off for Evans. He recouped his $2 million and was given an added $1-million producing fee by Carolco Pictures when the film company bought the script from him. And if “Showgirls” performs anywhere near what Eszterhas’ erotic thriller, “Basic Instinct,” did ($350 million worldwide), Evans will be that much richer as one of the film’s profit participants.
No doubt the movie will do well overseas in countries with liberal attitudes toward sexuality, but here at home its box office potential is more questionable because the film last week received an NC-17 rating from the Motion Picture Assn. of America.
Evans, like the filmmakers and studio, are optimistic that “Showgirls” will overcome the obstacles.
“Showgirls,” for which Evans shares a producer credit with Allan Marshall, though Evans was not involved in the making of the movie, is one of three movie properties Evans has bankrolled over the years.
His first was the 1982 smash comedy “Tootsie,” also gutsy subject matter for its day that all of Hollywood moviedom had passed on. Dustin Hoffman played an obnoxious New York actor who finally lands a job when he pretends to be a woman--and discovers he’s a much better female than he was a male.
“I got the script from Buddy Hackett [who wanted to play the role of the agent which director Sydney Pollack wound up with], and I couldn’t stop laughing,” recalled Evans, who paid $35,000 for an 18-month option.
Evans, who said he still receives payments on “Tootsie,” estimates he’s collected about $1 million in profits over the past 13 years.
Evans’ $450,000 investment in “Monkey Shines,” a 1988 box office flop directed by George Romero and released by Orion Pictures, didn’t pay off, however. Though he did collect a $500,000 producer’s fee and was involved in every aspect of production, he admits that he “never saw profits from the film.”
The financier, who says he’d “like to be looked upon as a working banker for select projects,” said he enjoys dabbling in Hollywood “because I enjoy movies very much. I have the time to do it. And I believe if done wisely, it can be a profitable business.”
Evans, who refuses to divulge his net worth other than to joke that “it’s more than $1 million,” made his first fortune with the Evan-Picone clothing line. At age 22, he and Joseph Picone started the business in August, 1949, then sold the company to Revlon in May, 1962, for $12 million to $15 million. He remained under contract for the next four years, then left the company, where brother Bob had also worked under the clothes line division called Diva.
Evans then went into the real estate development and construction business, where he made his next fortune building more than 6 million square feet of office space from 1967 to 1988, mostly in New Jersey.
Today, he maintains a real estate holding company to oversee his various properties.
In 1975, he suffered a personal tragedy, losing his ex-wife and two young children, Melissa, 10, and Elizabeth, 9, in a fire in their New York apartment. Their son, Charles Evans Jr., who was in a different part of the house, escaped without injury. After Evans lost his family, he went on a one-man crusade to establish laws mandating smoke detectors.