A Strong ‘Tea’ Helps MGM to Swallow Big Write-Offs

As Metro-Goldwyn-Mayer struggles to reinvent itself under new management and attempts to stop the financial bleeding, the studio has a little underdog art house movie to thank for its only bright spot.

Franco Zeffirelli’s “Tea With Mussolini,” based on the Italian director’s memories of growing up in Florence during the rise of fascism in Italy in the 1930s, is poised to make a profit of about $4 million--which is more than MGM can say for any of its major movie releases in recent memory.

MGM has been bereft of mainstream, profitable hits since last year’s “The Man in the Iron Mask,” starring Leonardo DiCaprio, which grossed $180 million worldwide. Since then, the studio has been swimming in red ink with such box-office losers as “The Mod Squad,” “The Rage: Carrie 2” and “At First Sight.”

Unlike all the major studios for whom summer is the most lucrative time of year to exhibit their movies, MGM’s only release this season is “Tea With Mussolini.”

And the film cost only a fraction of some of the expensive movies that The Times has learned MGM is writing off before they’re even released.

To its credit, the little underdog movie--championed by MGM’s marketing president Gerry Rich and distribution chief Larry Gleason--has continued to hang tough in a marketplace dominated by strong major studio releases.

In its seventh week of release on the same number of screens it started on--285--the picture’s business was up 12% over the previous week, according to Gleason.

While “Tea” is by no means a blockbuster--even by art house standards--it is a steady performer that has consistently grossed between $950,000 and $1 million during the last four weeks. It’s sold about $10 million worth of tickets, and Gleason predicts it could bring in an additional $3 million by the time its theatrical run is through.

If it does, MGM will reap between $5.5 million and $6 million in theatrical rentals--the share to distributors after theater owners keep their cut. Gleason projects that home-video and television sales should bring in $6 million more, so the studio could ultimately see about $12 million in total revenue.

MGM’s full investment in the movie is $8.5 million, of which $2.5 million was spent acquiring the U.S. and Canadian distribution rights, and an additional $6 million on prints and advertising.

So after recouping its costs, MGM could see $3.5 million to $4 million in profit.

Rich said MGM is considering holding back on the video release until after this year’s Oscar nominations are announced in February. The movie probably will see some Oscar and Golden Globe nods (announced in late December), based on the performances of its ensemble cast members Judi Dench, Joan Plowright, Maggie Smith, Lily Tomlin and Cher.

“At the end of the year, we might bring the movie back for an Academy campaign,” said Gleason, the executive responsible for MGM acquiring the domestic rights to “Tea With Mussolini” two years ago at the Italian film market MIFED when the project was still in script form.

MGM bought the domestic rights from Medusa Film, which financed and produced the $14-million movie, and Universal acquired the international rights with the exception of Italy for $7.5 million.

Because Zeffirelli electronically edited the film and was finished earlier than he had expected, he told MGM he could deliver them a print in time for last year’s Oscar race. But Rich and Gleason said they didn’t feel the film was ready, nor did they think they’d have enough prep time to launch a proper campaign with advanced screenings.

“We didn’t want to rush the film out for Academy consideration, so we decided to go in the summer and counter-program it against the blockbusters,” said Rich.

Rich explained that the strategy was to institute an aggressive word-of-mouth campaign, having screenings around the country for six weeks before the film’s opening May 14.

“We showed the film to groups of retired people, book clubs, museum groups--more discriminating audiences, people who are motivated by reviews, word of mouth and quality,” said Rich.

What “Tea” has going for it is it’s one of a handful of movies this summer that’s aimed at sophisticated adult audiences. Most offerings are youth-oriented comedies or adventure films, including this week’s debut of “Wild, Wild West” and such hits as “Big Daddy,” “Austin Powers: The Spy Who Shagged Me,” “Tarzan” and “Star Wars: Episode I The Phantom Menace.”

One bit of unexpected publicity that MGM “lucked into,” Gleason said, was having two of the movie’s cast members--Cher and Dench--in the public eye just before the film’s release. Cher’s well-received album and book came out early in the year, so the singer-actress talked about her upcoming film. And Dench won a best supporting actress Oscar for her performance in “Shakespeare In Love.”

It also helped that Rich showed the movie early in its run to TV’s popular talk show host Rosie O’Donnell, who he said “talked about it nonstop through the month of May.”

“When you can’t spend as much, you have to be more resourceful,” said Rich, noting “most importantly the movie sells itself.”

Both Rich and Gleason tipped their hats to MGM’s new management team for making independent movies a priority at the company.

While MGM already had a specialty film division called G2 Films, based in London, Chairman Alex Yemenidjian and Vice Chairman Chris McGurk recently transformed the studio’s United Artists movie label into a unit dedicated to independent releases.

The new regime is looking for cheaper, lower-risk ways to make some of its movies, as it toils under huge write-offs. Just last week, MGM announced it was taking a whopping $225-million charge in the second quarter as part of a major corporate restructuring that includes writing off $140 million of completed productions and projects in development.

Among the completed films being written off are “Molly,” a $21-million comedy starring Elisabeth Shue and directed by John Duigan about an autistic woman who’s cared for by her brother; and the $15-million “The Extreme Adventures of Super Dave,” starring Bob Einstein as comedy daredevil Super Dave Osborne.

Due to contractual obligations, “Molly” will receive a very limited release in six markets Sept. 17. “Super Dave” is headed straight for video with no theatrical release.

In reevaluating MGM’s preexisting business plan and projections, the new management has also decided to limit its marketing expenditures and take at least partial write-downs on upcoming releases it doesn’t see great promise in, including Walter Hill’s $70-million sci-fi adventure “Supernova,” about a medical alert unit in space starring James Spader; “Stigmata,” a $32-million thriller starring Gabriel Byrne and Patricia Arquette that was produced by Frank Mancuso Jr. (son of ousted MGM chief Frank Mancuso); and “One Man’s Hero,” starring Tom Berenger, which MGM inherited when it acquired Orion Pictures.