Film Arrives by Virtue of Family Fortune
As a budding movie producer, Dennis Law has a lot of strikes against him.
Law, 49, lives in Denver, where he has a busy practice as a vascular surgeon. Neither he nor his three younger brothers, also physicians, had any experience in Hollywood; their Rolodex is so small, in fact, that they found screenwriters by running an ad in a trade paper.
But in the eyes of MGM, the Chinese American scions had one crucial advantage: the ability, and willingness, to spend piles of the family fortune on a longshot movie dream.
With backing from their father, Hong Kong toy magnate Joseph Law, the overachieving brothers plowed $35 million into developing and producing “Warriors of Virtue,” a sci-fi fantasy involving kangaroo-like martial artists, and then financed $20 million more for marketing costs. The movie opens Friday on 2,101 screens nationwide.
The cost to perennially cash-strapped MGM? Zero. And that means guaranteed profit, since the studio is assured of receiving a sizable distribution fee no matter how the movie performs at the box office. With price tags climbing ever higher in Hollywood, studios are increasingly eager to split costs, often with other studios (such as the Fox-Paramount joint financing of the $200-million “The Titanic”) or independent production companies.
Independent producers also sometimes pursue “rent-a-system” deals, in which they agree to assume production and marketing costs in exchange for using a studio’s well-oiled distribution network. Rysher Entertainment employed this strategy, with mixed results, for such films as “Kingpin” and “Turbulence.”
But it is rare, if not unprecedented, for private individuals from outside the industry to assume the entire burden of making a movie without financial help from a studio, production company or other equity partner.
It took a lot of planning--and chutzpah--as Dennis Law readily concedes.
“It wasn’t like we came out of the operating room and said, ‘Hey, let’s go make a movie,’ ” he said during a recent interview.
For MGM, which currently is suffering from a dearth of product--"Warriors” will be its sole release until “Hoodlum” in late summer--this is the closest thing to a sure bet. The studio has been struggling to jump-start its slate since a partnership led by investor Kirk Kerkorian bought the company last year for $1.3 billion.
If “Warriors” proves a hit, MGM will not share any payoff beyond its distribution fee, which typically might be 15% of box-office rentals. Furthermore, while the Laws consulted with MGM executives at various stages of production, the studio had virtually no creative control over the project. MGM executives were not available to comment.
The risk, and potential reward, for the Law family is much greater. While the family declines to cite specific figures, “Warriors” will probably need to gross at least $35 million in domestic box office for the Laws to make their money back.
Joseph Law, the 75-year-old chief of Hong Kong-based Smile Industries, a toy manufacturer whose clients include major U.S. companies such as Mattel, was well aware of the risks.
But “these are your children, and you don’t want to see them waste so much time” and fail, the entrepreneur explained in a phone interview from Hong Kong. “If I were just [an unrelated] partner, I would have walked away.”
Yet the family has taken great strides to protect its investment.
The brothers--besides Dennis, there is Ron, 47, Christopher, 41, and Jeremy, 37--developed the idea for the movie four years ago and hired artists to draw kangaroo-like characters versed in martial arts.
They tested the idea by exhibiting the characters at a licensing show in New York, where visitors gave the creations a thumbs-up. Believing that a feature film was the best way to exploit merchandising, the family hired producer Patty Ruben and attorney Peter Dekom to negotiate a studio deal.
“We were first-time filmmakers,” Dennis Law said. “We didn’t know what you could get in Hollywood.”
The brothers retained the foreign distribution rights, which currently amount to $17.5 million in pre-release sales. Moreover, the Laws have signed branded licensing deals for everything from sleeping bags to Mylar balloons.
Perhaps most significant, the contract for the 6-inch action figures tied into the movie went to none other than Smile. The figures retail for about $7, and, according to Joseph Law, the company will collect about 10% of the wholesale price for each unit.
“In any business decision, there’s a risk,” Dennis Law said. “Now, no one’s going to lose money in the seven figures and feel good about it. But we feel passionate about [this movie].”