The 2-year-old exclusive film production deal between longtime Hollywood executive Sidney Sheinberg and the company he once ran is over, and studio sources said the reason is the poor start Sheinberg’s company made in the risky business of producing.
In a joint announcement, Universal Studios Inc. and Bubble Factory, the production company formed by Sheinberg and his two sons, Jon and Bill, acknowledged that their exclusive deal is over.
Sources at the studio said Universal could eventually lose from $50 million to $75 million on the deal, which produced two box-office duds, “That Old Feeling” and “McHale’s Navy.” Bubble Factory also was called in to take over a third film, “Flipper,” which also was a box-office disappointment.
Two pictures, “A Simple Wish” and Tim Allen’s holiday film “For Richer or Poorer” have yet to be released. Bubble Factory also has some films in development at Universal, which the studio can choose to make or cut loose for other studios to pick up.
Universal is said to have had a clause in the deal allowing it to pull the plug if losses reached a certain level.
But Sheinberg denied that any trigger was reached, and sources at the studio confirmed that the negotiations came before Universal could exercise any escape clause. Still, a high-level studio source said that the trigger was “all but reached.”
In an interview, Sheinberg said that he and his sons did not want to be tied exclusively to Universal. He added that Universal did not want a deal involving so-called “put pictures,” in which Universal was obligated to release three Bubble Factory films a year if they fell within a certain budget range.
“They feel it does not allow them--whoever they are--to control their destiny as they would like to,” Sheinberg said. “I think the renegotiation of the deal is very much to our best interest, and to Universal’s. Anybody who knows me knows I don’t agree to things that are not in our best interest.”
Sheinberg said he is especially optimistic about “For Richer or Poorer.” But he acknowledged that Bubble Factory’s movies to date have been disappointing.
“ ‘McHale’s Navy’ was a disaster. I’m not pretending it wasn’t a disaster,” he said.
The deal was negotiated when Sheinberg exited as president of MCA Inc.--since renamed Universal Studios Inc.--when spirits giant Seagram Co. bought control of the entertainment conglomerate for $5.7 billion in 1995 from Japan’s Matsushita Electric Industrial. Sheinberg had worked for the company for 35 years, including 22 as its president.
The deal effectively makes Sheinberg and his sons free agents. Sheinberg said the company has held no talks about affiliating with other studios.
“I haven’t given a scintilla of a scintilla’s attention to any third-party relationships,” Sheinberg said.