As for the film budgets, Samaha calls Intertainment's numbers fiction and says film budgets naturally change as production moves forward. He also says Baeres is using the allegations as a smoke screen to deflect attention from his own problems, which include a drop of more than 90% in Intertainment's stock value in the last year.
"This guy is making my life miserable," Samaha said. "He is not performing. We don't want to be in business with Intertainment. And if you have a cancer, what do you do with it? You cut it out."
Nonetheless, reports of Samaha's alleged financial wrongdoing are troublesome to Warner Bros.
"The problems he's having are unfortunate and it's not pleasing to read about it," Horn said. "Our deal with him is strictly an arm's-length relationship. . . . Of course, our image is very important to us and we are protective of it. Having said that, we have a deal with Elie Samaha's company, and as long as he lives up to the terms of our deal, then we'll honor it."
Regardless, Warner is at no risk financially and still values the relationship with Franchise enough to have recently exercised an option extending the deal four more years. Under the Warner arrangement, Samaha must deliver the movies 100% financed. The studio advances him money for prints and advertising costs but recoups that immediately from its first box-office receipts. Franchise pays Warner a 15% distribution fee.
As a private company, Franchise keeps its numbers secret, but Samaha says his movies haven't been the financial disasters they appear. He insists, for example, that "Battlefield Earth" may eventually earn a profit after DVD sales are counted. Still, he acknowledges, an independent like Franchise doesn't have a lot of room for error.
"With a company of our size, if you take a hit two or three times at $5 million to $7 million each time, you would be out of business," Samaha said.
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Major releases since 2000 by Elie Samaha's Franchise Pictures and each film's domestic box-office results to date:
"The Pledge,": $19.6 million
"3000 Miles to Graceland,": $15.3 million
"The Caveman's Valentine,": $48,138 (released March 2)
"The Whole Nine Yards,": $57.3 million
"The Art of War,": $30.2 million
"Battlefield Earth,": $21.5 million
"Get Carter,": $15 million
"Animal Factory,": $43,805
"City by the Sea"
Source: Exhibitor Relations Co.