COMPANY TOWN : Gibson's Film Productions No Mere Vanity

Nearly all big Hollywood stars have "vanity" production deals with the studios. The major movie companies pay celebrities sometimes millions of dollars a year to cover overhead and development costs to maintain production outfits on their back lots.

The idea is that the actor will develop and produce projects that he or she may or may not star in. The truth is, hardly any of these deals ever amount to a hill of beans. Nonetheless, the studios continue to have these arrangements, mainly because they want to be in business with a particular star on their own movies.

Mel Gibson is one of a handful of stars, along with Kevin Costner, Jodie Foster, Michael Douglas and Danny DeVito, who actually take this producing thing seriously. He's made a slate of movies under one of these so-called housekeeping deals.

Partnered with his former accountant-turned producer, Bruce Davey--who serves as president of Icon--he has made eight films in the past six years (including their most recent release, "Braveheart") under their Icon Productions banner at Warner Bros.

Given their track record and the credibility Gibson has earned as a bona fide filmmaker, the partners are at an interesting crossroads: How do you take a company from being more or less a prestigious appendage to a studio to more of a full-service, asset-building entertainment concern that will yield its founders more control and eventually more profit?

In an interview at Icon's surprisingly modest offices on the Warner back lot, Gibson and Davey admit they have growing pains.

"I think Mel and I feel we have served our apprenticeship and it's time to look at other horizons," said Davey, whose business savvy has helped Icon raise outside financing for a number of movies made under and outside their Warner deal.

At the end of this year, Icon's longtime arrangement with Warner expires. Davey and Gibson are considering a number of options, including seeking an equity partner to help finance their movies.

"There's been no shortage of offers from people who'd like to get into business with Icon," Davey said, declining to name names. "Ideally, we'd like to find an equity partner that's going to give us the freedom to just do a distribution deal with a studio."

Davey and Gibson are also talking to Warner about a possible restructuring of their arrangement, under which the studio pays Icon's overhead and finances and distributes a portion of its movies.

"We've outgrown the current deal," said Davey, who along with Gibson wants the partners to be "owners of our films in the future."

Gibson said it would be "nice to have that kind of control over materials that you sweat long and hard over." He recalled being struck at a recent tribute to Steven Spielberg when the director talked about how his films had been exploited by television.

"He saw bits of his film 'Duel' in 'The Incredible Hulk,' " Gibson said. "They were just hacking up his film and using it in other TV shows."

A number of producers--among them partners Michael Douglas and Steve Reuther and former studio heads such as Mike Medavoy and Stanley Jaffe--have sought out their own capital, then made distribution deals with a major studio to release their movies.

Unlike many Hollywood producers who rely solely on a studio for their movie financing, Gibson and Davey have been quite entrepreneurial in finding outside money for their movies when necessary.

"They think like owners rather than just producers," said a source close to the two.

This was the case on "Braveheart," a reportedly $70-million joint venture arranged by Icon between Paramount Pictures (which has domestic rights) and Twentieth Century Fox (which has foreign), as well as on Gibson's directorial debut, "Man Without a Face," released by Warners; "Immortal Beloved" (which Columbia distributed), and Icon's first movie, "Hamlet."

In fact, it was the difficult process of cobbling together the financing for "Hamlet" that inspired Gibson and Davey to form Icon in 1989. Also at that time, they put together a group of foreign investors under the moniker World Icon who, in addition to "Braveheart," helped finance several of their other movies, including a joint venture with Warner on "Man Without a Face" and with Columbia on "Immortal Beloved."

Davey describes the process of getting the financing for "Hamlet" as putting together a patchwork quilt. Gibson's talent agency, International Creative Management, had packaged the movie with director Franco Zeffirelli and producer Dyson Lovell, but no studio, including Warner, would back it. It wasn't until the film was in the can that Warner decided to get involved by buying the domestic rights from Nelson Entertainment.

"But they didn't put up the bread," said Gibson, who starred in the movie.

"Probably the most miraculous thing about that production is that it got financed," he said. "If you think about it, it's an old Shakespeare story with a tragic ending. It's not the sort of thing that says, 'Boy, this is going to make a million dollars at the box office.' "

Davey, who made his debut as a producer on "Hamlet," recalls the experience fondly: "It was a nightmare," he said.

But that didn't stop the partners from making another seven films. Gibson and Davey said they have never operated with a formal business plan, but rather have moved from one picture to the next when the material was there.

"Things just evolved organically, and they need to be organic for anything lasting, really," Gibson said.

Said Davey: "We don't have a traditional business plan. It's what we call adaptable. You can't sit down and say, 'We'll make three films this year,' because you'll end up making three films that are not worth" anything.

The Icon philosophy: "You have to go one [film] at a time and take them as they come," Gibson said.

"If three [films] happen to come along at once, so be it," added Davey. Which is exactly what happened last year when Icon made "Braveheart," "Immortal Beloved" and the small, independent Australian movie "On Our Selection," which opened Down Under this month.

Under the Icon deal, Gibson owes Warner one more movie in which he will star. However, his next movie as an actor will be "Ransom" for Disney and director Ron Howard. Production is expected to begin in January.

Icon is developing several projects, including remakes of Ray Bradbury's "Fahrenheit 451" and Leo Tolstoy's "Anna Karenina," but it has not yet picked its next production.

As for any possibility that Gibson may do the fourth installment of the "Lethal Weapon" series for Warner, the actor said: "Probably not. Didn't I do it already? It's my career. I don't want to waste time on old ground. I just want to go somewhere else."

And Icon is definitely looking to the future now. In addition to seeking its own capital, it has other plans afoot.

Earlier this month, the partners launched their own London-based foreign sales division, Icon Entertainment International, to handle the overseas distribution of their movies. Ralph Kemp, a veteran foreign sales executive, was hired as the division's chief executive.

Davey and Gibson would also like to set up their own record label by year's end. Davey said talks are under way with major record companies about distribution. Icon previously formed a venture with Time Warner's Atlantic Records to release the soundtrack to "Maverick" and made individual deals with other labels on its additional releases.

The partners agree it's time to strike out on their own.

"Standing still really amounts to standing still," Gibson said.

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