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A Battle-Scarred Revolution

The young studio has seen success at the box office, but flops have taught its founder some things to avoid.

August 07, 2003|Michael Cieply and Claudia Eller | Times Staff Writers

Joe Roth suspected eight months ago that his Revolution Studios was in for a rough ride this spring and summer.

In a hurry to make its mark, the young company had committed nearly $350 million to a cluster of movies that included two from filmmakers Ron Shelton and Martin Brest. Each would write, produce and direct his own picture -- and enjoy the prerogative of final cut, depriving Revolution of creative control over their work.

Another film, starring Bruce Willis, was an expensive international military adventure that probably would test the patience of audiences who were getting their share of foreign affairs on CNN.

Roth, by his own account, resolved to get a better grip on the creative process and costs. But it was too late to avoid several high-profile train wrecks. Willis missed badly with "Tears of the Sun," as did Shelton with "Hollywood Homicide" and Brest with "Gigli."

"Failure is a very good teacher," Roth said in an interview Wednesday. "It hurts so badly, you have to sit back and stare at it. It's humiliating. You want to learn from your mistakes and make it better."

Luckily for Roth and his studio, Eddie Murphy, who had just come off three flops, hit with "Daddy Day Care," as did Adam Sandler with "Anger Management." But the misses have left the 3-year-old movie outfit and its financier-distributor, Sony Pictures Entertainment, in an embarrassing place that takes some of the glow off Roth's reputation as one of Hollywood's smartest operators.

The disappointments have pinched Sony, which depends on Revolution for nearly half its film schedule. And they come at an awkward time, as Sony Corp. -- whose studio chief, John Calley, is planning to retire -- reorganizes its management around a governance committee that includes Roth as a key player, even though he holds no executive position in the company.

While stressing that Revolution is soundly profitable and has delivered net gains for Sony and other investors, Roth, 55, said he has learned some hard lessons: to put storytelling first, keep firm control over development and production of his own pictures and to avoid R ratings when they get in the way of the audience, as happened with Jennifer Lopez's young fans when they were shut out of the R-rated "Gigli."

Launched in May 2000, Revolution is a partnership among Roth, Sony, News Corp.'s Fox Entertainment unit and Liberty Media Corp.'s Starz-Encore cable group, along with several individuals who help set up the company.

Roth owns about 62% of Revolution, while the individual investors hold stakes in return for a total equity investment of $250 million. Sony Pictures, which owns 7.5%, provides about half the production cost and all the print and advertising money for each Revolution movie.

According to Sony and Revolution, the arrangement has been profitable for all involved -- though Revolution has had the better end of the deal. The Santa Monica-based company will make close to $300 million from its first 17 films, Revolution partner Rob Moore said. Sony, which carries most of the movie costs, will gain in excess of $100 million from that batch, said sources close to Sony.

Six of the movies will end up in the red, Moore said. The loss from "Gigli" is estimated at $35 million. "Hollywood Homicide" will lose about $30 million, and "Tears of the Sun" about $20 million. Beyond that, "Tomcats," "Punch-Drunk Love" and "Stealing Harvard" have lost about $10 million each.

But the clunkers have been offset by the spectacular success of "XXX," which has taken in about $275 million at the worldwide box office, as well as "Maid in Manhattan," "Black Hawk Down," "Anger Management" and other winners.

"We're very happy with the arrangement," said Amy Pascal, head of Sony's Columbia Pictures unit. "For every 'Gigli,' there's a 'XXX' or "Maid in Manhattan.' "

Still, the studio's parent saw profit drop 98% in its fiscal first quarter, in part because films from both Revolution and Columbia have done worse than last year's blockbusters, which included "Spider-Man" and "Men in Black II."

Sony's top U.S. executive, Vice Chairman Howard Stringer, this year named a seven-member committee to supervise the studio, with a special eye on trimming costs. Pascal and Roth serve on the panel, which assumes greater authority as studio chief Calley approaches retirement this fall.

In the past, Stringer has made clear that he has favored Roth as Calley's successor. In an announcement Wednesday, however, the company confirmed that operations would be overseen by Pascal, along with fellow executives Jeff Blake and Yair Landau.

For the moment, at least, Roth said he is focused on Revolution.

"I love running the company and having the freedom to do other things, like directing movies and producing the Academy Awards," he said.

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