For Warner and Roadshow Studios, No Need to Analyze Joint Ventures
When Bruce Berman was head of production at Warner Bros., little did he know that some of the very projects he bought back then--including today’s release “Analyze This"--would become movies he would help get financed in his new job.
The economic environment of Hollywood has shifted since Berman was booted out after six years as Warner’s movie chief in March 1996 and 18 months later was named chairman of Village Roadshow Pictures.
Studios like Warner are increasingly looking to outfits such as Village Roadshow Pictures--whose publicly traded parent company Village Roadshow Ltd. is Australia’s largest entertainment conglomerate--to share the financial risk of making and marketing their movies.
Village Roadshow’s year-old deal with Warner to co-finance 20 films over five years is one of several partnerships the studio has made. Others include those of Steve Reuther’s Bel Air Entertainment with French pay-TV giant Canal Plus and Castle Rock Entertainment with Universal Studios (which inherited the deal after buying PolyGram Filmed Entertainment).
Unlike Bel Air’s Reuther, who functions as a producer, Berman operates as an executive, a role he sees as advantageous.
“It allows me to think in terms of slates and programs instead of single pictures,” said Berman, 46. “And, for a company like this to be successful, I think that’s really where our focus has to be.”
Since the inception of the deal a year ago, Village and Warner have already co-financed seven movies, the first of which, “Practical Magic,” was released last fall, with two more, “Analyze This,” starring Robert De Niro and Billy Crystal, and “The Matrix,” with Keanu Reeves and Laurence Fishburne, in theaters this month. The other four films--Renny Harlin’s “Deep Blue Sea,” starring Samuel L. Jackson; David O. Russell’s “Three Kings,” with George Clooney, and his “Three to Tango,” with Matthew Perry and Neve Campbell; and Davis Guggenheim’s “Gossip"--will be released this year.
Under the deal, which calls for five movies a year over five years, Roadshow and Warner are essentially 50-50 partners, each kicking in half the production cost on the projects they agree on. Warner distributes the movies in perpetuity worldwide with the exception of Australia, New Zealand, Singapore and Greece--territories where Village Roadshow Ltd. is most heavily concentrated both as a distributor and an exhibitor.
After marketing expenses are recouped and Warner collects a reduced distribution fee, Warner and Roadshow split what’s left of the revenue from their movies.
“If one of us has lost money on one side and one of us had made money on the other side, that gets evened up,” explained Berman, noting, “That’s the spirit of the deal.”
As for the process of selecting movies, it’s up to Berman and Warner Co-Chairman Terry Semel to agree on what works well under the deal and is worthy of green-lighting.
“It’s a give-and-take,” said Semel, noting there are “some projects we don’t really want a partner on,” whether that’s because they are so inexpensive they don’t warrant a partner or are too expensive to fit under the deal.
Roadshow does place financial limits on the size of films it will co-finance.
According to Berman, the company can finance movies with budgets “as low as $15 million on ‘Gossip,’ ” a fall release about a rumor started by a college student that has tragic consequences, and “as high as $80 million on ‘Deep Blue Sea,’ ” a summer release about genetically enhanced smart sharks that menace workers at a marine facility.
Co-financing deals benefit studios and production companies by defraying the spiraling costs of development, production and marketing.
“The smartest thing studios can do today is have a distribution company that collects fees, share the risk on movies that are not sure shots--and most movies are not--and keep 100% of the movies they deem to be sure shots, like ‘You’ve Got Mail,’ ” said Berman, noting the Warner film that has grossed more than $100 million domestically.
Semel views the relationship with Roadshow as a “win-win for both companies,” in that “it enables us to leverage our cash investment in the number of Warner Bros. films we make with each other while still maintaining distribution rights in most of the world.”
Co-financing deals benefit foreign exhibitors and distributors by guaranteeing access to a flow of major studio films.
Initially the partnership relied on Warner’s inventory of movies, which with the exception of “Practical Magic” are all projects Berman bought for the studio when he was president of production from 1989 to 1996.
Opening today on 2,200 screens, “Analyze This,” a $45-million comedy about a mob boss (De Niro) who goes to a shrink (Crystal) when he begins experiencing anxiety attacks, was originally brought to Berman by Paula Weinstein’s Warner-based company Spring Creek Productions with the talent already attached.
“There were some projects I wanted that I didn’t get and some projects they wanted me to take that I didn’t,” said Berman.
As a 12-year veteran of Warner, Berman is familiar with the studio’s inventory. Berman said, “We like to take a proactive position and tell Warner ahead of time what we’re interested in rather than having them come to us with what they think we might be interested in.”
Another avenue of getting movies on the slate is Roadshow’s own development pipeline. Berman said in the next month he expects to announce three movies that could be ripe for the co-financing arrangement.
“What I try to do is develop as much as possible with Warner Bros. so that when we do get to the point of making a decision, they’re invested creatively and financially,” he explained.
If, by chance, there’s a project Berman is passionate about but Warner is not, he said he will develop it anyway with the hope that when the screenplay is completed and the movie is packaged the studio will change its mind.
“Maybe the studio will see something they didn’t see when I brought it to them in the first place,” he said.
Semel added that not only has Warner had an “extraordinarily successful relationship” with Village Roadshow over the past 25 years, being partners in exhibition and distribution, but also “the addition of Bruce Berman as a graduate of our company” has proved beneficial for both companies.
Despite having been ousted from his position at Warner, Berman said time has healed all wounds, and “I’ve never felt better than I do now personally and professionally--it could have easily not worked out.”
Berman, who started in the movie business working for Motion Picture Assn. of America President Jack Valenti in Washington while attending law school, was halfway through his three-year production deal at Warner when he was approached by Graham Burke, managing director of Village Roadshow Ltd., about taking the chairmanship. Under Berman’s direction, Village Roadshow Pictures has become a financier of major studio movies. Before Berman took over, the company had financed only low-budget independent movies.