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Weintraub's Worries : Box-Office Flops Add to Woes of Flashy 'Mini-Major'

January 11, 1989|MICHAEL CIEPLY | Times Staff Writer

The Rolls-Royce Convertible in two tones of tan belongs to Jerry Weintraub--with some help from an automobile "allowance" paid by Weintraub Entertainment Group, of which he is chairman, chief executive officer and a major stockholder.

The blue Rolls next to it belongs to Weintraub's company and is reserved for Kenneth Kleinberg, president and chief operating officer.

Such perks have been the sweeter side of running a movie and television company with big-league financial backing and a yen to beat the major studios at their own game. Yet perks may be harder to come by at Hollywood's flashiest remaining "mini-major" movie studio if it doesn't deliver a major hit--and soon.

Weintraub Entertainment, which claimed almost half a billion dollars in financing from Columbia Pictures, Cineplex Odeon and others when it was formed two years ago, is now bruised and battered from the box-office failure of its first three movie releases.

"The Big Blue," a European-produced film to which Weintraub Entertainment bought distribution rights, sold just $3 million in tickets last August. Then "Fresh Horses," the studio's first original production, which starred Molly Ringwald and Andrew McCarthy, grossed only $7 million at Thanksgiving.

But the biggest shocker was "My Stepmother Is an Alien," a Christmas comedy that matched up sexy Kim Basinger with funny Dan Aykroyd. The film cost at least $26 million to make and market, and was supposed to carve $50 million or more out of the Christmas box office, according to pre-release estimates by Columbia and Weintraub Entertainment executives.

Instead, "Stepmother"--despite a Washington premiere that included President-elect George Bush, a Weintraub friend, along with much of the inaugural and transition teams--was buried by Universal's "Twins" and Paramount's "The Naked Gun."

It grossed just $10 million in the United States during its first four weeks, leaving the 51-year-old movie mogul and former pop star manager (whose film production credits include, among others, "The Karate Kid" and "Diner") to wonder what hit him.

"It has personally knocked me for a loop," Weintraub said during an interview at the company's cream-colored, art-bedecked headquarters in West Los Angeles.

"Are the results of 'Stepmother' damaging to us? Absolutely. Are they insurmountable? No," he insisted.

"But it's going to slow me down. I'm re-examining the kind of pictures we're doing."

Though jolted by the setbacks, Weintraub said he still finds "Stepmother" a "terrific" film (reviews were mixed) and hopes it may eventually turn a profit on foreign, videocassette and cable TV sales. Company executives noted that the movie has already opened to good business in Australia and French-speaking Canada.

But Weintraub and Kleinberg acknowledged that they may consider at least slight cuts in the company's 170-member staff and might for the time being slow their pace somewhat from the seven or eight films a year they had previously planned to release under a 20-year distribution agreement with Columbia.

The company currently has four films in the can and may complete a fifth for release in 1989, according to Kleinberg. It plans to release "The Gods Must Be Crazy II," a sequel to the 1984 art-house hit, and "Daddy's Little Girl," which stars TV's Tony Danza ("Who's the Boss?"), this winter.

According to Kleinberg, the studio also expects to shoot "Evita" with director Oliver Stone, its showiest project to date, in Buenos Aires before the end of the year.

But at Weintraub, the mood of the moment is clearly one of shock, which, notwithstanding the three flops, seems strange when you consider the apparent size of the company's bankroll. After all, when the studio was formed in February, 1987, Weintraub called it "the most highly financed entertainment company that's come down the pike," a reference to the dazzling $461 million in securities, bank loans and advances it had garnered from Columbia and others.

So where did all that money go?

According to filings with the Securities and Exchange Commission and other sources, the studio has actually been scrambling for capital ever since July, when the Bank of America terminated its commitment for a $145-million, 7-year credit line, wiping out almost a third of the company's expected war chest.

Peter Geiger, vice president of entertainment lending for the bank, declined to discuss reasons for the termination. According to Kleinberg, however, the bank had difficulty in syndicating portions of the loan to other banks after Weintraub Entertainment separately borrowed $50 million to help with its $85-million purchase of the 2,100-film Thorn-EMI Screen Entertainment film library from Cannon Group Inc.

The bank and the company say they are now close to finalizing a reduced, $95-million credit line, which will run for just two years and will include funds from Credit Lyonnais, a European lender.

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