‘Happy, Texas’ Deal Spurs War of Words

A crowd-pleasing comedy called “Happy, Texas” has become the talk of the Sundance Film Festival--but it’s not exactly happy talk.

Miramax bought the film earlier this week, beating out Fox Searchlight, Paramount Classics and New Line Cinema--each of which had wooed the first-time director, Mark Illsley, in two days of frantic meetings with his producers and his parents. Given Miramax’s track record making independent films successful at the box office, even the distributors that got beat agreed that Illsley’s choice was understandable.

But the way the final deal was brokered--and particularly the manner in which Miramax has publicized it--is so galling to some executives here that two have taken the unusual step of complaining publicly. The result: a highly personal battle of words that pits one acquisitions executive against Miramax and another against the agent who brokered the sale, Cassian Elwes of the William Morris Agency.

More than merely a clash of egos, the “Happy, Texas” furor is a window into the high-stakes world of film marketing, where perception is sometimes more important than fact. Is “Happy, Texas” (which stars William H. Macy, Steve Zahn and Jeremy Northam) an 800-pound gorilla, made by the son of a wealthy California businessman and sold at Sundance for a record price? Or is it the little engine that could--a scrappy labor of love, financed by a Santa Rosa family that “mortgaged almost everything [it] owned” (according to a Miramax press release) and sold for a pittance?

The answer depends on who’s spinning. So much for the tight-knit world of indie filmmaking; Park City these days is a lot like Hollywood, only chillier.

Tony Safford, a senior vice president of acquisitions for 20th Century Fox, alleges that Miramax is lying about what it paid for “Happy, Texas,” which follows two escaped convicts who evade the law by posing as professional beauty pageant promoters (who happen to be gay). While Miramax says it paid only $2.5 million (plus substantial first-dollar gross participation for the filmmakers), Safford said he knows “for a fact” that Miramax paid “north of $10 million,” breaking the Sundance record held by “The Spitfire Grill” (which Castle Rock Entertainment bought for $10 million in 1996).

Safford and others believe Miramax is downplaying what it paid in order to avoid what some call “the ‘Spitfire’ syndrome.” Industry veterans say that film, which did $13 million at the box office, suffered because the huge sales price raised unrealistic expectations. And Miramax’s purchase last year of Brad Anderson’s “Next Stop, Wonderland” for $6 million is said to have also been hindered by the hype surrounding its sale (it made only $3.4 million in theaters).

But Mark Gill, Miramax’s L.A. president, dismisses Safford as “a disgruntled ex-Miramax employee with an ax to grind.” (Safford is a former head of acquisitions at Miramax.) Gill stands by the $2.5-million upfront payment, which he said will allow Miramax to put more money into marketing the movie. He said the back-end deal is so generous that if the movie grosses just $20 million domestically, the filmmakers will make more money than if they’d taken $10 million up front.

“Since Tony seems to be a little affected by the altitude up there [in Utah] and his brain isn’t working,” Gill said of Safford, “let me be clear: We did not pay $10 million for this movie. Period.”

Meanwhile, Cary Woods, a producer (“Copland”) whose Independent Pictures has a domestic output deal with New Line, said the negotiations on “Happy, Texas” left him feeling “completely used” by Elwes. Woods said that despite spending three hours discussing his marketing plans with the filmmakers, he never got a chance to bid on the film, which he compared to “In & Out.”

“I’m writing Cassian a letter basically saying we’re not friends anymore,” said Woods, a former agent at William Morris who has known Elwes for years. “I will succeed [in] never buying a movie from him for the rest of my career.”

Elwes responded: “Cary is a dear friend of mine, and I’m very sorry he feels this way. I did everything I could to keep him in the game and to promote him to the director. I hope that over time he’ll come to know the truth of what happened here and forgive me.”

Of the “Happy, Texas” sale, Elwes said his confidentiality agreement prohibited him from talking numbers, but he called it “the best deal that’s ever been made for an independent film.”

Sources close to the negotiations said that during the bidding process, which occurred late Monday night, Elwes told people Miramax was offering more than $10 million. Two sources said Elwes said Miramax’s bid “broke a record”--a statement that Elwes called “absolutely not true.’

“There are so many people here gossiping and trying to be part of this story,” he said. “That people would deliberately try to hurt me is just horrible.”

Making matters even more confusing is the director himself, who took pains in an interview to distance himself from a Miramax press release on the film. Asked to confirm Miramax’s description of the deal, Illsley said, “That entire statement is not wholly true.”

Later, asked to confirm a quote in the press release, attributed to him, that claimed he had turned down two higher bids than Miramax’s, Illsley equivocated.

“Miramax was not the highest bid. But they were not the lowest,” he said vaguely, adding, “That press release was not signed by Mark Illsley.”

Sources said Paramount Classics bid between $6 million and $8 million and that Fox Searchlight never formally bid but indicated it would pay around $5 million. Woods, meanwhile, said he never made an offer, though he wished he’d had a chance to.

“I won’t tell you how far I would have gone, but I wasn’t going to $10 million, that’s for sure. At $10 million, I’d have to do $25 million [box office] to break even,” said Woods, who shared Safford’s skepticism about Miramax’s version of the filmmakers’ back-end deal.

“I ran the numbers,” he said. “That deal would [give Illsley] 25% to 30% of gross from first-dollar on everything. I don’t think that Tom Cruise or Tom Hanks has that deal. I can’t imagine that anyone would give that to a first-time filmmaker.”

Gill stood his ground.

“We paid Robin Williams just $2 million for [acting in] ‘Good Will Hunting,’ plus 20% of the gross, and nobody believed that either,” he said. “Call Robin’s people. They’ll tell you it’s the greatest deal they ever did.”

For his part, Illsley says he is thrilled to be working with Miramax, whose co-chairman Harvey Weinstein flew to Utah to close the deal. Illsley said he felt Weinstein truly understood his movie, adding that he felt that the way the film was sold had brought some dignity back into the deal-making process.

Specifically, Illsley said, he refused to talk money with distributors in his initial meetings, asking them instead to tell him how they planned to release and market the movie. This approach, he said, was designed to focus attention on “the marriage, not just the wedding.”

For their part, distributors said they cooperated, though one compared the process derisively to “an audition.” Ruth Vitale, co-president of Paramount Classics, offered another analogy that seemed fitting, given the film’s plot line.

“It was like a beauty pageant,” she said.

Woods, meanwhile, was more disparaging.

“The whole thing was a charade,” he said. “Given what we all know happened, if I were the filmmakers I would head to the bank and shut up. Don’t go out and brag how dignified it was. It’s unfathomable to me.”

Illsley says he knows some distributors are miffed, but he feels they all got a fair shake. Miramax won out, he said, because “they are the godfathers of the indie world.” Though he knows Weinstein’s penchant for recutting movies has earned him the nickname “Harvey Scissorhands,” Illsley said the charismatic executive had promised him final cut and promised not to change a frame. The film is scheduled for an October release.

Production notes for the film describe Illsley as “the son of a corporate CEO who started his own business and grew it into a thriving multinational company.” Illsley’s father, Rolf, confirmed that he remains a shareholder in Optical Coating Lab in Santa Rosa, which makes the pigment used to print U.S. currency, among other things.

Told that Miramax’s press release said the film, made for $1.7 million, was “financed by Illsley’s family and friends, who mortgaged almost everything they owned and borrowed heavily to raise the funds,” Rolf Illsley shook his head.

“We did all borrow money. I went to the bank and got some loans. And so did Mark’s brothers and sisters,” he said. “But no, not ‘everything we owned.’ That’s not true.”