13 Jul Film Fund-amentals: No Truth in News and No News in Truth

Reading Hollywood news reports is a lot like reading Pravda and Izvestia back in the days of the old Soviet Union. You have to read heavily between the lines and ignore most of what is said.

This is especially true of the recent series of studio firings and other maneuvers within the executive suite (just the beginning of what promises to be a never-ending series of studio shuffles). Officially, everything is fine and everybody is great, which is why they had to move on. Unofficially, the captain of the Titanic still insists that they simply stopped to pick up more ice for the party.

Take for example the current situation at Paramount Pictures. They have one of the few hits of the summer (though Transformers: Revenge of the Fallen is not going to do the business they were hoping for). They also have sudden job openings for head of physical production, senior vice president of production and executive vice president of production. In other words, most of the guys who run the place. In business circles, this is called “restructuring.” Everywhere else it is known as a panic attack.

The dismissal of Guy Stodel as head of Paramount Vantage would normally be of deep concern to people within the independent film industry. But since Paramount had already pretty much whacked the company by moving it all back within the confines of the main company (whose key people they have now canned), the further demolition of their in-house indie unit is just a bit of belated mop-up activity.

Admittedly, Paramount Vantage was never able to get an advantage except on the occasions when they co-produced with Disney’s Miramax (No Country For Old Men and There Will Be Blood). When left to its own devises, Paramount Vantage repeatedly stumbled its way to the bottom of the box office. Some of the movies were sort of OK (e.g. Margot at the Wedding), but Paramount Vantage was clueless as to how to market the titles. Others, like Black Snake Moan, simply defied any known audience market that might exist.

During its brief existence, Paramount Vantage sailed a rudderless course, and its fate is of little real consequence to the independent market (with which it never seemed all that comfortable). But its inevitable trek to the ash heap is a grim reminder of the major studios’ inability to comprehend the small market, in terms of either production or audience. Even worse, the lackluster history of Paramount Vantage will be used as an argument in favor of continuing the nutty drive toward big buck production uber alles.

Meanwhile, NBC Universal is sending their CFO to Hollywood to ask a basic question: Why do our movies stink? More to the point, why can’t these stinkers make any money? Any time when New York sends the head financial guy to Hollywood, it’s a given that heads will roll. Since NBC Universal is believed to be waiting to see the box office results on their remaining summer line-up (Public Enemies, Bruno and Funny People), the sound of those melon-sized objects hitting the bottom of a wicker basket should soon be echoing through the Black Tower.

The upside about the impending upheaval at NBC Universal is that the studio hasn’t been much of a friend to independent production. In fact, NBC Universal hasn’t been much of a friend to production, period, for some years. Between their TV and cable operations and movie studio productions, NBC Universal gives me the distinct impression of a company that would just as soon be engaged in some other line of business altogether (maybe a shoe factory or something).

With the single biggest hit of the century (The Dark Knight with its global count of $1 billion and climbing – and let me repeat, Transformers II ain’t gonna get anywhere near this amount), Warner Bros. is sitting pretty. Maybe. Maybe not. Their first quarter profit sheet is written in red ink. They are the studio who proudly announced at the beginning of the year that they were pulling out of small-budget production and would focus on tent pole movies. Ironically, the only substantial hits they have had since The Dark Knight have been Gran Torino (budget $35 million; US box office $148 million), Friday the 13th (budget $16 million; US box office $65 million) and The Hangover (budget $35 million; US box office $209 million). The tent pole productions (e.g. Watchmen) have all been costly bombs. Sound as if Warner Bros. may be ready for some “restructuring.”

On the other hand, Disney (the company that practically owns everybody else) may be ready for a team of really good lawyers. Rumors have abounded for the past several months that the Magic Kingdom is about to have another major round of layoffs, and employees in virtually every department have been feverishly re-doing their resumes. But thanks to the recent monorail disaster and four different suits alleging 21 years of toxic contamination from Disney into the surrounding community, employees now have something to help take their minds off their problems. Instead of worrying about job security, they can now concern themselves with the issues of cancer, class action suits and really bad (even scary) publicity. Kind of puts everything into perspective.

Disney denies any wrongdoing and insists that the suits are frivolous. Since the contaminates include carcinogens such as hexavalent chromiun as well as trichloroethylene and tetrachloroethylene, and since the various plaintiffs are claiming that the area has suffered a unique rate of cancer from the toxic exposure, Disney may be in for a very long fight. A long and very nasty fight with many more charges and suits to follow. The kind of legal battle that turns some companies into an impoverished economic wasteland.

But at least Disney has a lot to sell off before they get really desperate. They could even try “restructuring.”

Read more of Dennis Toth’s views in “America’s Next Sweetheart,” by Christian Toto, Boxoffice, July 17, 2009.