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HOLLYWOOD NOW | EXECUTIVE P.O.V.

The Peter Principle

A Hollywood Survivor ('Midnight Express,' 'Rainman,' 'Batman') Explores the Mysteries of Winning in Show Biz.

March 22, 1998|PETER GUBER | Peter Guber, former CEO of Sony Pictures, is the head of Mandalay Entertainment

It is widely believed, not withstanding the MPAA's numbers, that the average cost of a motion picture manufactured by a major studio is approaching $50 million. A North American print and advertising budget to launch in the cluttered marketplace hovers near $25 million. When we factor in costs of international release, we're talking about an average investment of nearly $100 million. The studios release 18 home-grown movies a year (many are producing more), which means they go to bat every 21 days. If that doesn't give the executives involved sphincter arrest, nothing will.

Here's another rush: Today, the development platforms of the studios include as many as several hundred projects, but the vast majority of these movies never get made, and these losses must be absorbed out of the successful pictures.

Time lines are another aspect of the movie business that makes it unique. In the music industry, opportunity horizons can be a matter of just a few weeks or months. Television movies-of-the week make it to the tube in 200 to 300 days. Ah, but a feature film defies the laws of gravity.

Consider the economic differences between TV movies and features. In television the priorities are: First, be on time (if you're late, they're not going to post up a black screen and say, "Sorry, Mandalay didn't deliver this picture on time, so go out for a bite to eat and come back in an hour and a half"). Second, it must come in on budget. The return from all revenue sources is quite predictable--and limited. Third, the movie has to be good.

In theatrical motion pictures, there also are three priorities: First, the film has to be great. Second, the film has to be great. Third, the film has to be great. The other two TV priorities don't really count. Did you ever hear anyone say, "Let's go down to the Bruin Theater; I hear there's a film playing that came in on budget"?

More significantly, for a theatrical motion picture to garner profits, it has to go through an excruciating experience. Consider: In 1978, I made "Midnight Express" for $1.7 million. There were no gross players; in fact, I don't recall there being any net players except for me (that's always a good position). The picture enjoyed a staggering profit. Today, making a studio film of just the two-hour lunch that I had before writing this article would probably cost about $35 million, and you'd have to spend $20 million or so more for a major marketing plan. And if you don't get it released domestically, then it's not worth much internationally. It also would probably take two years to decide whom to cast as the waiter, and he or she would probably get $20 million against 15% of the gross from dollar one. Yes, that's a big carve-out before the financiers get their investment back.

Then, of course, the writer and the director would want to eat out of the same trough. You know those familiar noises: Oink, Oink, Oink, Oink. So "My Lunch at The Palm" would need another star, the newest and hottest on the horizon: special effects. We would have to have the pasta arrabiata morph into the hero just to show that we had this component for the trailer or for the promotional ShoWest reel, which might cost another $100,000. This is presumably necessary to sell the films to the exhibitors, who are taking 50% of the action at the box office on your film. Then, of course, you have to argue with the exhibitor about how much of the 50% you're owed that they will actually pay you.

It's not that I'm cynical about the business; I'm realistic. The odds of getting to King Solomon's mines are becoming longer every day. I don't mean to discourage anyone from being an independent producer or from making a film, starting a small studio or being a major studio executive. It's just that you have to understand that there's a reason why Las Vegas has bells, whistles, alarms, buzzers and horns going off when someone wins big: The odds are slim.

Now, in light of all this, what do we do? Go out of the business? Retire? Give up? Our product often defies rational analysis, so how do we turn our burning passion for a kung fu movie about elephants into a reality?

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