From Disaster To Dividends

A year ago at this time, 20th Century Fox was having its feet put to the fire due to such expensive fiascoes as “Volcano” and “Speed 2” and the out-of-control cost overruns on “Titanic.” While dodging the bullet, Bill Mechanic, chairman and CEO of Fox Filmed Entertainment, was busy, however, mapping out a strategy for the future, which this summer paid off handsomely with three of the season’s biggest hits, “The X-Files,” “Dr. Dolittle” and “There’s Something About Mary.”

Reflecting on 1997, Mechanic says, “I don’t think we were any worse off than anyone else at that stage.” And while that sounds disingenuous, he notes that last summer the studio also released (through its specialized Searchlight division) what would turn out to be one of the most profitable movies ever made relative to its cost, “The Full Monty,” which grossed $250 million around the world.

And despite a media pillorying of “Titanic,” whose budget had reached the unheard of sum of $200 million and which had been postponed from summer to the holidays, Mechanic had posted a “What, me worry?” sign on his door. While he never imagined it would become such a phenomenon, Mechanic says he sensed that James Cameron’s film would represent a directional change in the style and content of big-screen epics away from what he calls “knucklehead” event movies that emphasize explosions over story.

“If you look at what ‘Titanic’ was, it was clearly speaking to a change in the marketplace,” he says. “It wasn’t the kind of film that by the time you walked out of the theater you’ve forgotten what movie you saw. And we’ve been guilty of that in the past.”

With “Titanic” launched and with “Anastasia,” the studio’s first serious animation effort, a qualified success, Mechanic withstood the disappointments of such films as “Great Expectations” and “The Newton Boys” and even a bumpy summer start with the political satire “Bulworth,” a film Mechanic says he still believes in and would like to find a way to resuscitate.

But starting in late May, the studio embarked on a hot streak. The Sandra Bullock romance “Hope Floats” grossed $60 million and was followed by three major revenue generators: “The X-Files,” “Dr. Dolittle” and “There’s Something About Mary.” The four movies represent a production investment of less than $200 million and have already sold almost $350 million in tickets in the U.S. alone.

The studio’s most recent release is another modestly budgeted (under $25 million) Cinderella update, “Ever After,” starring Drew Barrymore, which after only two weeks has grossed more than $22 million and is developing into a mid-sized hit. Fox’s final summer release, the similarly budgeted contemporary romance “How Stella Got Her Groove Back,” starring Angela Bassett and Whoopi Goldberg, is also expected to zero in on its target female audience, largely African American.

“Corporately,” says Bob Harper, Fox’s marketing chief, “much of what we talked about doing two years ago is just now starting to pay off.”

An overriding concern for all four Fox film divisions (20th Century Fox, Fox 2000, Fox Animation Studios and Fox Searchlight) has been to identify and target both narrow and broad segments of the film-going audience.

It’s no coincidence that “Hope Floats,” “Ever After” and “Stella” were all aimed squarely at women. Fox has successfully tapped that often ignored half of the film-going population with a variety of films including “Waiting to Exhale,” “Romeo & Juliet,” “Soul Food” and “The Object of My Affection.”

Not only do such films tap an underserved audience segment, they also help create efficiencies in the studio’s most expensive area, marketing. The costs of releasing a film have stubbornly resisted cost control because the price of TV advertising has escalated as more major movies are released every week, according to Harper.

Targeted films can save some money. “It’s not that we’ve reinvented the wheel,” Harper says, “but the nature of the media business has changed so that it’s easier to identify your target audience [particularly through cable TV] and cheaper, because you’re not spending money outside the target.”

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Other cost savings have been realized from keeping a tight rein on talent deals and nipping potentially ruinous production overruns in the bud. Fox turned down an offer to keep “Independence Day” filmmakers Roland Emmerich and Dean Devlin because the profit-participation terms were too rich. “Speed” director Jan De Bont’s effects-laden western, “Ghostrider in the Sky,” was postponed and sent back to the drawing boards.

“If you’re going to make a film that will cost $70 million to $100 million, the script has got to be perfect,” Mechanic says. “When we’re comfortable with that, then we’ll decide whether to make it or not.”

With few exceptions, Mechanic says he prefers to work in conjunction with talent on specific projects tailored to that person’s strengths, unless he’s working with “full-service” producers who can see a project from development through completion. Two recent examples are Fox’s deals with producer Arnold Kopelson and with Arnon Milchan’s New Regency Entertainment, both of whom migrated from Warner Bros. Kopelson arrives with a strong track record in developing action dramas (“The Fugitive,” “Seven”), and New Regency also comes with its own capital.

Much the same attitude is applied to the talent in front of the camera. While there are occasions to ante up on expensive salaries (Fox has Brad Pitt, Leonardo DiCaprio, Bruce Willis and possibly Tom Hanks in upcoming films), Mechanic notes that most of the studio’s hits over the last few years have been concept-driven, not star-driven: “Titanic,” “Independence Day” and “Speed.”

Again, there are exceptions. Some stars have added measurably to a film’s gross, like Arnold Schwarzenegger in “True Lies,” Bullock in “Hope Floats” and Eddie Murphy in “Dr. Dolittle.”

“Hope Floats” started as a low-budget romance and got notched up to about $30 million after Bullock signed on. But Mechanic says it never would have grossed almost $60 million without her. “Sandra was an invitation to see that movie,” he says. More often, however, Fox is looking to develop continuing relationships with new talent as it did with DiCaprio (“Romeo & Juliet” as well as “Titanic”) and currently such stars as Barrymore, Jennifer Aniston, Ben Stiller and Cameron Diaz.

Fox has also zeroed in on better exploitation of its existing franchises. “The X-Files” movie was the next step in the continuing expansion of the cult TV hit into the mainstream. The film peaked at $85 million (Mechanic expects at least $100 million abroad), but, more important, it has broadened the show’s appeal and serves as a bridge to a second feature due in the next couple of years.

Though they will not participate in the profits, releasing the three new “Star Wars” films--the first of which will be released next Memorial Day--is a “no-lose” proposition, Mechanic says. It entails no financial risk, “and we know the movie is going to be hugely successful.” Even if the upside is only a distribution fee, it continues Fox’s association with one of the most significant pop-cultural film series of the last half of the century.

Another potential franchise could be “Planet of the Apes,” which Mechanic admits will be one of the studio’s more expensive propositions. Cameron is writing the script and will produce the film. Only with screenplay in hand will Mechanic be able to judge whether the concept is viable enough to proceed without a major star or major director or whether it will be worth spending the extra money.

Fox is largely sitting out the fall since Mechanic is uncomfortable going up against the already announced releases from other studios with material he thinks may be too similar. The critical holiday season will kick off with “The Siege,” starring Denzel Washington and Willis. It will be followed by the much anticipated “The Thin Red Line,” the first film by writer-director Terence Malick since “Days of Heaven” two decades ago. Also scheduled later this year is Mike Judge’s comedy “Office Space” with Aniston.