Fox Says Multiple Film Units Spur Diversity

As Hollywood studios look for every which way to consolidate operations and cut overhead, the strategy of having duplicative movie labels seems to make no financial sense.

Yet 20th Century Fox insists on maintaining them.

It was speculated for some time that Fox would eventually fold up 5-year-old Fox 2000, one of its two mainstream film divisions, after concluding it simply didn’t pay to sustain parallel units with separate staffs essentially developing the same kind of movies.

To the contrary, when Fox 2000 chief Laura Ziskin resigned this week, Fox Filmed Entertainment Chairman Bill Mechanic underscored his commitment to keeping the division alive, reiterating his theory that having multiple film units headed by different personalities results in a better, more diverse slate of movies. And, he argued, it gives the division heads more control over their projects because they have fewer to oversee.

Fox is the only studio to divide responsibility for the mainstay of its annual mass-appeal movie slate between two production heads. In the wake of Ziskin’s departure, Mechanic promoted Tom Rothman to president of the Fox Film Group to oversee Fox 2000 and the studio’s other main production division, and named Elizabeth Gabler and Hutch Parker as production heads succeeding Ziskin and Rothman, respectively.

Some in Hollywood suggest that it would be more cost-effective and seemingly just as creatively effective to have one production staff serving up the mainstream movies, since any team is inherently made up of different personalities with varying tastes.

The argument against the two-label system is that having independent staffs and separate development tracks not only costs more but can promote internal competition between like labels. It can also cause confusion among agents and producers who might find themselves torn about where to send particular projects.

Mechanic, who was en route to Australia and unavailable for comment, and Rothman hold the opposite view. They believe that having parallel movie divisions is advantageous both for the studio and for the creative community at large.

“The audience is broad and diverse, and you can’t take a monolithic approach to programming for that audience,” Rothman said. “The advantage to agents and the sellers of the world is that it increases the likelihood of their having an advocate for their material.”

Rothman also discounts the notion that having two like divisions creates unnecessary competition.

“There are enough projects to go around and we don’t wrestle with each other. The two divisions are collaborative,” Rothman said, noting that on the few occasions when both divisions wanted the same piece of material, “we worked it out.”

Some competitors don’t buy that notion.

“It makes no sense to have two internal divisions competing against each other from a material standpoint and a release slot standpoint,” said MGM Vice Chairman Chris McGurk, who shortly after joining the studio in the summer shrunk MGM’s sister label United Artists from a full-fledged mainstream unit into a specialty-film division.

“From a cost standpoint, having two separate development organizations didn’t make sense,” McGurk said. “It made more sense to have one organization releasing 15 films a year than two divisions each doing seven or eight.”

Rothman pointed out that all of Fox’s movie labels, which also include the specialty unit Fox Searchlight and Fox Animation Studios, are serviced by the same story, casting, physical production and post-production departments.

Mechanic’s other argument for having a multi-label system is that splitting responsibility eases the load on division heads. But studios today are making fewer movies than they used to.

Ten years ago, when Mechanic was a top executive at Disney, then-studio chief Jeffrey Katzenberg formed a second label--Hollywood Pictures--alongside Touchstone Pictures to produce more films aimed at adult audiences. The move was motivated by Katzenberg’s strategy to ramp up the studio’s output of movies to about 40 a year.

The move ultimately resulted in a slew of box office duds and cost the studio a lot of money.

Last year, Disney consolidated the development and production operations of all three of its movie divisions--Touchstone, Hollywood and Walt Disney Pictures--into one creative group of executives. (Disney still uses its branded Disney family logo as a marketing tool to let consumers know what kind of movie they can expect to see.)

Warner Bros. also uses a separate logo (Warner Bros. FamilyEntertainment) to identify its kids-oriented releases. But as of last year, when it phased out its animation division, all of the studio’s internal development and production activities are centralized under one division headed by production President Lorenzo di Bonaventura.

Most Hollywood studios, including Fox, Sony, Universal and Paramount, have separate divisions to handle smaller, art-house releases, which often require specialized marketing and distribution.

It also probably makes sense that Disney-owned Miramax Films, which is known for releasing sophisticated specialized movies, chose to launch a separate low-budget genre label. That unit, headed by Bob Weinstein, has proved to be a cash cow for Miramax, with such horror hits as the “Scream” series.

Warner Bros.’ newly installed chairman, Alan Horn, said he may consider forming a classics division. New Line Cinema, which is owned by Warner Bros. parent Time Warner, has a specialty-film division, Fine Line, which has not proved to be profitable after many years. Warner Bros. itself has released smaller, more specialized movies over the years, with mixed results.

Many in Hollywood are still befuddled by Sony’s formation last year of what appears to be a second specialty-film banner, Screen Gems. The studio already had an established art-house unit in Sony Pictures Classics.

Sony Pictures Chairman John Calley said the rationale for launching Screen Gems was to handle the kinds of films that fall between the limited releases of Sony Classics and the studio’s more traditional wide releases.

Earlier this year, Sony also set up a division to develop “character-based” live action and animated entertainment targeted to kids for film, television and other markets.

Some find it hard to buy the studio’s contention that neither Screen Gems nor the family division will overlap with current operations.

About 18 months ago, as part of a streamlining move to eliminate duplication and save money, Sony folded its TriStar Pictures movie unit into Columbia Pictures, headed by Amy Pascal.