Studio Report Card: Warner Bros.
'Mail' delivered, 'Lethal' wasn't, and the future is 'Wild'
EXEC SHUFFLE: Warner Bros. was the dysfunctional studio of choice in 1997, and management upheaval continued to bug Bugs Bunny well into 1998, culminating in the departure of co-president of production Billy Gerber in April and the incessant rumors that co-chairman Terry Semel might ankle to take over Universal.
Following Gerber's move to a producing deal on the WB lot, his comrade -- or rival -- Lorenzo Di Bonaventura became the sole head of production, in a move that WB expected to streamline decision-making.
As for Semel, informal dinners were said to have taken place, but nothing was ever decided about studio jumping. Time Warner chairman Gerald Levin and vice chairman Ted Turner have been patient with WB co-chairs Semel and Bob Daly and the poor performance of the film division. Insiders say Levin and Turner are willing to weather the down months (read: years). But it's expected that a good deal may be riding on the shoulders of this summer's "The Wild, Wild West."
MIDDLING TO LOW POINTS: The effect of the executive turmoil wasn't immediately apparent at the box office, although WB had a better 1998 than 1997. The company's standout pics were "Lethal Weapon 4" ($130 million), "City of Angels" ($79 million) and "A Perfect Murder" ($68 million) and the year-end release of "You've Got Mail" with Tom Hanks and Meg Ryan.
But the fact that action pic "Rush Hour," from WB's supposedly smaller sibling New Line Cinema, outgrossed "Lethal" made WB execs feel uneasy. To make matters worse, the backend participation payments on "Hour" were practically nonexistent compared with those on "Lethal."
Semel admits that " 'Lethal 4' was not as profitable as 'Lethal 3' because it cost more. On the other hand, it also grossed more and didn't have wildly expensive effects or 20% gross players." Semel added that he expected "Lethal 4" to end up with a worldwide gross of almost $300 million. "I wouldn't mind having that every year," he said.
Warner Bros. was unexpectedly dependent on the development slate from Turner Pictures, which was merged into WB when Time Warner and TBS got married two years ago. Though WB execs originally downplayed the Turner slate addition as un-needed, the studio went on to benefit from both Turner pics, "City of Angels" and "You've Got Mail."
HIGH POINTS: Semel said he preferred to judge the performance of the studio by looking at the whole entertainment group -- i.e., film, television and music -- rather than purely film. "We have projected a 16th record-breaking year in earnings for the group, and we'll hit (that target)," Semel said.
Semel argued that 1997 was a transition year for Warner Bros. Pictures, and the second half of 1998 marked the beginning of a turnaround. He noted that WB's year-end comedy "Mail," starring Tom Hanks and Meg Ryan, opened successfully Dec. 18 with $18 million weekend.
On the marketing side, the stormy tenure of the maverick Chris Pula -- stolen by WB from New Line after the Time Warner-Turner merger -- ended in April when he was replaced by McDonald's marketing exec Brad Ball. Semel said he was looking for WB, which ended '98 tied with Sony for third place and 10.9% in terms of market share, to be back in pole position this year.
FINDING PARTNERS: Aside from its management changes, a key development at WB during 1999 was the studio's widening of its co-financing practices. WB now has four principal co-financing partners: Castle Rock Entertainment (shared with Universal Pictures), Village Roadshow Pictures, Bel Air Entertainment and Morgan Creek Prods.
Semel said WB's 1999 slate contained more co-financed pics than ever before. "There's only one ("The Wild, Wild West") that is costing more than $100 million," he said.
Village Roadshow is co-financing the Robert De Niro/Billy Crystal comedy "Analyze This"; Renny Harlin's shark-infested actioner "Deep Blue Sea"; and the Joel Silver-produced "The Matrix." Bel Air contributed to "Message in a Bottle," starring Kevin Costner. And Castle Rock is providing "The Green Mile," with Tom Hanks, and the thriller "Mickey Blue Eyes."
"We want to do more films in the $50 million to $75 million range," Semel said. "We will limit ourselves to one that breaks through that. We will be aggressive about leveraging our money, but we want to keep distribution rights to most of the world."
He explained that WB intended to keep back rights by encouraging its partners to make equity investments in projects, which enables them to recoup alongside the studio (although he wouldn't confirm specifics of the agreements). Village Roadshow, for example, co-finances with WB but only gets pic rights in Australia and New Zealand.
LOOKING AHEAD: WB had to contend with numerous, expensive, box office disappointments in 1998, specifically "The Avengers," "Soldier" and "Sphere." This has convinced the senior WB brass to do fewer event films and do them better. Semel pointed to a number of moderately priced pics, which, he claimed, would be profitable, including "Jack Frost," "The Negotiator" and "Practical Magic."
In general, the WB motion picture strategy is gradually becoming more flexible. "We're going for a better mix of product, genres, films and talent," Semel said. Warner Bros. is noted for its muscular male action formula from the likes of Clint Eastwood and Mel Gibson, but next year the studio -- like a lot of its Hollywood brethren -- is targeting the teen demographic, among other things, with pics such as "Three to Tango," starring Neve Campbell.
