Studios in Quandary Over Timing

In the wake of the Sept. 11 attacks, when will moviegoers want to see Arnold Schwarzenegger hunting down a terrorist or Tim Allen and Chris Rock yukking it up in action comedies that feature bomb sequences?

That is the burning question confronting top executives at Warner Bros. and Walt Disney Co., the studios behind three major productions that were temporarily shelved three weeks ago. The studios are undecided about release dates for “Collateral Damage,” “Big Trouble” and “Bad Company” until they can better gauge public sentiment in coming months.

Such uncertainty comes at a price. The trio of delayed movies represents more than $200 million in spent production and marketing costs, with “Collateral Damage” the most expensive at more than $80 million.

The studios are caught in a moral and financial dilemma, grappling with what is appropriate in light of the terrorist attacks while incurring escalating interest costs with each passing week.

“It’s a balancing act,” said Dick Cook, head of the motion picture group at Disney Studios, which canceled the release of “Big Trouble,” on Sept. 21, and “Bad Company,” slated for Christmas Day. “There was a very conscious decision to take them out because we wanted to do the right thing.”

Cook said Disney probably will not release “Bad Company,” which cost north of $70 million to produce, until mid-June. The comedy, starring Rock and Anthony Hopkins, features terrorists as villains and a sequence with a suitcase bomb about to explode in Manhattan.

Barry Sonnenfeld’s “Big Trouble,” starring Allen and Rene Russo, might be released in the first quarter of next year, Cook said. The movie contains a scene in which a bomb is sneaked past airport security and onto a plane.

Warner Bros. President Alan Horn said the studio is considering February as a possible release date for “Collateral Damage.” The Andrew Davis film, which stars Schwarzenegger and includes a terrorist bombing of a Los Angeles skyscraper, was scheduled to open today.

The film was delayed “without hesitation,” Horn said. “We felt, at the time, it was wrong to have a fictional representation of a terrorist act.”

In the unlikely event that “Collateral Damage,” which was co-financed by producer Steven Reuther’s Bel Air Entertainment, were to be held for a year, the interest costs could be as much as $5 million, Horn said.

Marketing Money ‘Essentially Wasted’

With production and marketing costs at an all-time high and profit margins around 5%, such investments are significant even for diversified media giants such as Warner Bros. parent AOL Time Warner and Walt Disney Co.

Last year, the cost of making and marketing studio movies rose 6.5%. The average production cost now is $54.8 million and marketing cost is $27.3 million, for a total investment of $82.1 million a film.

Warner’s move to hold “Collateral Damage” wasn’t lost on the film’s star, who was consulted about the decision.

“Even though it meant the loss of millions of dollars, they felt it was better to close the book and think more about healing the wounds than benefiting from it,” said Schwarzenegger, who portrays a Los Angeles fireman seeking revenge against the terrorist responsible for killing his wife and young son.

“What impressed me the most was that even though the studios have a reputation of being greedy, I saw a different side of people. . . . That was extraordinary,” Schwarzenegger said. “It’s a big investment that the studios have made, but that setback cannot be compared to the setback of the tragedy.”

Warner already had spent about $3 million on advertising materials--including posters, trailers, billboards and television spots--all of which were pulled the moment the decision was made to postpone the movie.

“That money is essentially wasted, even though there may be some residual impact” when the movie is eventually released, Horn said. He added that Warner will have to start from scratch in relaunching and possibly retooling its marketing campaign.

Studios See an Audience for Postponed Movies

David Foster, a producer of “Collateral Damage” who developed the project at Warner six years ago, said that the title has become so “world renowned, we are getting publicity we’d never otherwise get” since the Sept. 11 attacks.

With the $40-million-plus “Big Trouble” just two weeks shy of its release date when Disney pulled the plug, the studio had spent about $6 million of its overall advertising budget. But Cook said he is hopeful that “there will be some awareness when we begin the campaign again.”

Both Warner and Disney stood to lose more money on additional pre-booked TV ad time, but Horn and Cook said they were able to switch spots for other upcoming movies.

Because “Bad Company” was not scheduled to open until Christmas, Disney hadn’t yet spent a penny on advertising. Director Joel Schumacher said he recently suggested to producer Jerry Bruckheimer that they preview the film for a recruited audience early next year to test the waters.

“I’m totally Zen about the movie,” Schumacher said. “If the timing is not right, it’s not right. And right now, it’s not right.”

Those involved in all three releases say they are confident that audiences will want to see their movies even in light of the Sept. 11 tragedy.

“I feel there will be a time when it’s appropriate,” said Schwarzenegger, citing strong rental demand in recent weeks for terrorist-themed videos such as “Die Hard,” “The Siege” and “Executive Decision.”

Schwarzenegger, who starred in the hit movie “True Lies,” said audiences have long been fascinated by terrorism movies and are happy to see bad guys get their due.

“People enjoy these movies because they feel it could be real,” Schwarzenegger said.