Seed money fueling Franchise came from Guez. A Tunisian immigrant, Guez heads Tarrant Apparel Group, a major private-label clothing maker. Though he won't talk much about his relationship with Samaha, Guez said he's known him for more than 20 years and backed him as a business investment.
Guez confirmed that he holds an option to acquire as much as 25% of Franchise, which would leave Samaha with 50% and Franchise's president, Andrew Stevens, a former actor, with the remaining 25%. Intertainment said Guez put $7 million, overall, into Franchise. Guez disputes that but won't reveal the actual amount. Papers filed in 1999 in Samaha's divorce from Carrere list Samaha as having a personal obligation to Guez of $1 million.
Among the first stars William Morris sent Samaha's way was Travolta. Despite his marquee value, Travolta had tried and failed for more than a decade to launch a personal project, "Battlefield Earth," based on Scientology founder L. Ron Hubbard's 1982 sci-fi novel.
Stepping up to finance the long-languishing project during a phone call from Milan, Italy, Samaha earned the gratitude of Travolta's manager-producer, Jonathan Krane. Krane said Travolta was so eager to do the project that he "substantially" cut his upfront fee, which sources put at $16 million--down from his usual $20 million. Krane said he slashed his producer fee in half. In return, the two were promised half of any profit the film would generate, according to Krane.
Intertainment, which distributes movies in Europe, signed on in 1999 as the single biggest financier of Franchise movies. For European rights, Intertainment would foot 47% of each budget.
Questioning Costs
The matchmaker between the two companies was a former Warner Bros. top business executive, Jim Miller, who sits on the board of Guez's garment company. Miller, who declined to comment on Samaha, was so enthusiastic about the producer that he dashed off a glowing e-mail in 1999 to Gerald Levin, chief of what was then Time Warner Inc., describing the multi-picture deal.
"He's made a believer out of me so far. And beyond his business skills, he is a great guy," Miller wrote of Samaha in the e-mail, obtained by The Times.
Samaha planned to operate outside the traditional film industry economic models--way outside. Before the company had a single picture in theaters, he provided Intertainment documents that projected the value of Franchise to be at least $593 million and possibly as much as $1.7 billion.
The relationship between Samaha and Intertainment Chief Executive Ruediger "Barry" Baeres quickly soured as Intertainment began to question Franchise's budgets. Both Baeres and Stephen Brown, who runs the company's Los Angeles operation, said in an interview that they got their first whiff of trouble during a screening last fall of "Get Carter."
"We looked at each other and said, 'There's no way this movie cost $63 million,' " Brown recalled. They contend "Get Carter" instead cost only $44.7 million, but they were billed at the higher price.
Baeres and Brown said they subsequently discovered conflicting budgets on Franchise films and suspect that as many as four versions existed for some. The way the alleged scheme worked, according to Intertainment, is analogous to the padding of an expense account by jacking up scores of line items. Because Intertainment agreed to cover 47% of each budget, Baeres and Brown claim, the inflated costs led it to overpay for each film.
For example, on Franchise's forthcoming release "City by the Sea," with Robert De Niro, Intertainment was informed that actors cost $18.5 million, but another document showed the amount to be $13.7 million. Building sets cost $1.2 million in Franchise's budget, the company alleges, compared with $864,018 in other documents. The cost of the film's music, $815,000 on Franchise's documents, is just $300,000 on the separate, lower budget documents. The result: a $59-million budget on paper that Intertainment says is $39 million.
Intertainment, as a result, declined to finance the film, but it says it did unknowingly bankroll as many as 22 movies with inflated budgets and overpaid Franchise in excess of $75 million. Recently, Intertainment added Los Angeles-based Imperial Bank as a defendant, alleging it was in cahoots with Samaha, an allegation Samaha's lawyer denies.
Intertainment sued Franchise in December in U.S. District Court in Los Angeles, alleging it was duped into overpaying the film company $75 million. Franchise sued Intertainment the same month in Los Angeles Superior Court, alleging Intertainment reneged on its deal with Samaha. The cases are pending.
Samaha disputes all the allegations made by Intertainment, saying its suit stems from his spurning overtures by Baeres to buy him out and Baeres' jealousy that he found a new European backer, Epsilon.
At Arm's Length
