It’s Deal Ho! for Pioneering Attorneys

A decade ago, entertainment attorneys Nigel Sinclair and Craig Emanuel had what would become a formative experience for them and the successful entertainment practice they would build.

They were hired by actor Paul Hogan and his manager-producing partner John Cornell to negotiate a U.S. distribution deal for a $6-million Australian movie they made called “ ‘Crocodile’ Dundee.”

The lawyers, egged on by Cornell, who doggedly believed they had a $100-million gold mine on their hands, structured a tough licensing deal with Paramount Pictures. Hogan and Cornell--the architect of the deal--took a modest advance in return for owning the lion’s share of the gross. Perhaps even more significantly, the partners retained all sequel rights.

Needless to say, they made out like bandits.

“ ‘Crocodile’ Dundee”--released by Paramount domestically and Twentieth Century Fox elsewhere except for Australia, New Zealand and Taiwan--grossed about $400 million worldwide in all media. The sequel, released worldwide by Paramount two years later, grossed about $300 million worldwide.

“One of the things that deal showed us was if you represent talent that has a project with strong box-office draw and you can own the negative, you can make a substantially greater amount of money than if you’re an employee for hire at a studio,” Emanuel says. “That has, in essence, become a theme for a lot of the work we’ve done, and I think it’s become a major trend in the industry now where you see a lot of major talent owning their own movies.”

Over the years, Sinclair, 48, and Emanuel, 36, went on to help pioneer a number of independent movie deals with such high-powered Hollywood clients as Mel Gibson and directors Peter Weir and Tony and Ridley Scott. The deals put their clients into partnerships with the studios and placed their Beverly Hills law firm Sinclair Tenenbaum Olesiuk & Emanuel on the map as a leading expert on international film transactions.

With a strong international breed of lawyers and combined expertise in the foreign marketplace, the partners in the firm, who also include Irwin Tenenbaum (Woody Allen’s attorney) and Keith Fleer, recognized early on that the best financing opportunities for American independent movies were overseas.

“At a time when no one was really interested in the international independent business in the late 1980s, we started thinking there was a very interesting area here,” Sinclair says. The strategy he and his partners adopted was to “take top talent that had clout and were prepared to commit to a picture without a studio, raise the money to make the film, then make them business partners with the studios.”

Since the American market had already matured by the early 1980s with booms in videocassettes and pay cable, they decided to capitalize on the explosion of the international film market, which Sinclair attributes primarily to the privatization of European television and modernization of the Asian markets.

“The new money in the business and the money that is entrepreneurial and not institutionalized is not in America; it’s in Europe and Japan,” says Sinclair, coming from such key international players as France’s Canal Plus and Japan’s distribution giant, Shochiku.

*

One of the seminal deals Sinclair and Emanuel helped engineer was director Peter Weir’s romantic comedy “Green Card,” starring Gerard Depardieu, which Walt Disney Co. released in 1990.

Weir, who controlled the material, could have made a traditional director’s deal with Disney and made out fine as a profit participant on the movie that Disney would have owned outright. Instead, working with Weir’s agent, John Ptak of Creative Artists Agency, Sinclair and Emanuel arranged independent financing for the picture as an Australian-French co-production, and struck a straight distribution agreement with Disney.

Disney licensed the rights in various territories, and after collecting its distribution fees, gave Weir the balance of the profit from the film, which grossed $75 million worldwide.

Such a deal, Sinclair says, drastically “shifts the balance of power from the studio to the filmmaker.” Suggesting that not all talent is suited for such partnership relationships, he adds, “It’s challenging the pay or play studio employment system.”

Conventional studio deals are attractive to stars and filmmakers who don’t want the worry or pressure of shouldering the financial risk involved in the movies they make.

“Some of the more emotionally volatile talent probably couldn’t do it because they need somebody to solve problems for them,” Sinclair says.

Director-brothers Tony and Ridley Scott, who have owned their own businesses for years, including a successful TV commercial company, were ripe candidates for such deals.

Sinclair and Emanuel helped set them up in their own movie and TV company, Scott Free, where they can be co-owners of the movies they choose to make. The company has a domestic distribution deal with Disney and a foreign arrangement with Largo Entertainment. Ridley has made some movies in partnership with the studio, including “White Squall” and the upcoming “G.I. Jane,” starring Demi Moore.

Emanuel is in the process of setting up the first independently financed film for client Steven Seagal, who has been an employee on his previous movies.

Recently, the attorney made a deal for one of his up-and-coming filmmaker clients, Anthony Waller, who’s currently directing “An American Werewolf in Paris,” the sequel to John Landis’ 1981 movie, “An American Werewolf in London.”

Waller and his producing partner, Richard Claus, acquired the sequel rights to the original after encountering creative differences with PolyGram/Propaganda. Emanuel helped secure independent financing for the film from London-based foreign sales company J&M; Films, Disney’s Hollywood Pictures and a Luxembourg subsidy.

Sinclair is working with director Wim Wenders, Bono (of U2) and writer Nicholas Klein to help get their project, “Million Dollar Hotel,” off the ground. The law firm helped set up financing for Wenders’ 1991 film, “Until the End of the World.”

“I’m the businessman helping them arrange the international financing, making deals with actors and arranging the domestic distribution,” Sinclair says. “It’s really like a counseling service.”

Emanuel likens their involvement more to that of “an executive producer rather than a traditional legal role.”

The law partners divide their time among independent financing transactions, conventional talent deals and advising international businesses looking for a foothold in Hollywood.

The firm represented Shochiku in a recent multi-picture deal with Robert De Niro’s movie company Tribeca in which it was reported that the Japanese company would provide up to $30 million.

Although there have been a number of false starts by foreign companies losing money in Hollywood, including Italy’s RCS and Penta, Sinclair says that doesn’t mean co-ventures are going away. “They won’t go away because they can’t. Ultimately, the percentage of box office going to American movies in every major foreign territory has gone from 60% to north of 90%.”

Born in Scotland, Sinclair was a former international tax and business lawyer who once worked in the Middle East in the oil and gas business. When he first came to Hollywood in 1982 to open a Los Angeles office of the prestigious London firm Denton Hallburgin, everyone assumed he was an entertainment attorney, so eventually he succumbed and became one.

In 1985, he hired Emanuel, a 25-year-old Australian from Melbourne with no green card or work permit, for $15 an hour.

“Within a year, he was the backbone of the practice,” Sinclair says. “We got him a green card, he passed the California bar and now he’s the managing partner of the firm, and I work for him.”

*

It’s unusual for attorneys to be acknowledged at Oscar time.

But, at this year’s Academy Awards ceremony, both Mel Gibson and his producing partner, Bruce Davey, thanked Sinclair when they picked up Oscars for their movie “Braveheart.”

Like some of his other clients, Gibson has gone from being an actor for hire to an established filmmaker who with Davey runs his own business and co-owns the independently financed movies such as “Braveheart” and “Hamlet” that Sinclair and others have helped get made.