Zac Efron Picks Two Projects

These are Above the Line clients



By NIKKI FINKE Wednesday January 27, 2010 @ 7:10pm
DEADLINE HOLLYWOOD

The list of young actors who transition to adult leading men isn’t that long... Tom Cruise, Sean Penn, Christian Bale, etc. Zac Efron is hoping to make that transition so he’s linked himself to a pair of projects he hopes will give him the chance to broaden his range. One of them would be his first action turn, in a Ludlum-esque spy thriller. Efron has a just made a deal at Universal for Fire, an adaptation of a graphic novel by Brian Michael Bendis that was published by Image Comics.
The plan is for Efron to play a college student who is recruited by the CIA, only to find that he has been trained for a program that creates expendable agents. Bendis, the fanboy favorite whose comic book creations include "Ultimate Spider-Man", will write the script. While little material moves during Sundance, Efron and Bendis got the deal after they schlepped around to three studios, pitching the project on a rainy day last Friday. The project has the steady hand of Neal Moritz, who’ll produce with Circle of Confusion’s David Engel. Efron and Alchemy Entertainment’s Jason Barrett will be exec producers.

Efron has made a separate deal at Warner Bros to star in a Back To The Future-like film that melds two projects. One’s a pitch from writers Tim Calpin and Kevin Jakubowski, and the other is a WB project called Algorithm that the studio was already developing as a directing vehicle for Nick Stoller, the Forgetting Sarah Marshall director who just wrapped Get Him To The Greek. Mark Gordon and Bryan Zuriff are producing and Alan Riche is exec producer along with Efron and Barrett.
Efron’s quest to be taken seriously, and to shed the teen heartthrob label thrust upon him after a trio of hit High School Musical films, really began when he bailed on a Footloose remake to instead re-team with his 17 Again director Burr Steers in The Death And Life Of Charlie St. Cloud, playing a young man who carries the guilt over the death of his younger brother. It isn't easy, as one of the films he made recently, Me and Orson Welles, was barely seen. But he wasn't looking for box office as much as the chance to be part of a strong cast in an art film. Good for him.

In Hollywood, Grappling With Studios’ Lost Clout

So what does this mean to the screenwriter. It simply emphasizes what's been discussed in this blog previously, the more economically viable your screenplay is the better chance it has of selling. With the studios under heavy pressure from their much larger parents to reverse the trend of declining revenue, they are looking for films that have the highest probability of generating strong box office revenue in as many markets (foreign and ancillary) as possible while attempting to reduce or at least maintain the current cost structure; comic books, theme park rides, best selling books, TV shows, sequels, prequels and remakes. Easier said than done, especially in a town where many view their status by the size of their budgets. This is taking place all over the industry and is most evident by the personnel changes taking place at Disney.








January 18, 2010 NY TIMES
In Hollywood, Grappling With Studios’ Lost Clout

By MICHAEL CIEPLY and BROOKS BARNES
LOS ANGELES — A proposed sale of Metro-Goldwyn-Mayer, the most powerful and lucrative studio during the golden age of film, drew only meager offers last week, and now Hollywood must confront a troubling question: Are movie studios becoming a financial footnote?

Loaded with debt and virtually at a standstill, MGM — now owned by a consortium that includes Sony, Comcast and the investment firms Providence Equity Partners and TPG — put its skeletal remains on the block in a complicated process that allowed potential bidders to review detailed financial information after showing their bona fides and indicating a price range based on a partial look at the books.

Time Warner, Lionsgate Entertainment and smaller private companies showed interest, but signaled offers of less than $2 billion — and perhaps as low as half that — for a company that was bought in 2004 for about $5 billion.

In a report published by Barclays Capital this month, Anthony J. DiClemente and George L. Hawkey estimated that even studios much healthier than MGM, bitten by falling DVD revenue and a 30 percent decline in operating income from 2007 to 2009, had experienced a sharp reduction in their relative importance to the media companies that own them.

“While we enjoy thinking about the film business, the reality is that film doesn’t matter nearly as much to the stocks of media conglomerates as it previously had,” Mr. DiClemente and Mr. Hawkey wrote.

Looking at Warner Brothers (a unit of Time Warner), Paramount (Viacom), Disney Studios (the Walt Disney Company) and 20th Century Fox (the News Corporation), the Barclays report reckoned that such studios, on average, accounted for only about 10 percent of the “enterprise value” of their parents.

In a separate report published last month by Global Media Intelligence, Roger Smith, an analyst and former film executive, wrote that Universal Studios, with just $170 million in operating income on revenue of $3.8 billion in 2009, was not a significant factor in Comcast’s proposed deal to acquire control of the studio’s parent, NBC Universal.

Susan Arons, a spokeswoman for MGM, declined to comment on the bidding for the studio. In a statement on Friday, the studio said it had finished receiving “indications of interest” from potential bidders and was reviewing them before proceeding.

MGM pays about $300 million a year in interest on a $3.7 billion loan and faces $1 billion in payments in June 2011. The rest of the loan is due the next year. MGM also has a $250 million line of credit that matures in April.

If MGM’s 140 creditors feel bids are too low, Stephen F. Cooper, a turnaround expert hired as chief executive in August, may need to look for another way to salvage the company.

There are backup options. For instance, Qualia Capital, a private equity fund run by the Hollywood veteran Amir Malin, has floated the idea of converting some of the debt to equity, infusing MGM with about $500 million in cash and keeping it going in a stripped-down form until the market improves.

Two people involved with the bidding, who spoke on the condition of anonymity because of restrictions on the discussion of the process, said they believed virtually all of the final bids would require a bankruptcy filing that would allow any new owner to proceed without the old obligations.

Hollywood has been rife with speculation about potential bidders. The News Corporation may wade into the auction, with reports that a bid might involve Peter Chernin, the company’s former president. But Mr. Chernin has “little to no interest” in MGM, according to a spokeswoman.

Meanwhile, some who monitor the film business have been struck by the way

MGM’s collapse in value has defied a long-standing bit of conventional wisdom: that studios, like sports teams, may lose money, but their owners ultimately do not.

“I don’t believe, fundamentally, that the value of a movie studio is necessarily going to drop going forward,” said Stephen Prough, a founder of Salem Partners, an investment banking firm in Los Angeles.

Mr. Prough said, however, that tight capital had put a damper on corporate acquisitions, those of movie companies included. And

film libraries — a major component in studio value — have decreased in worth over the last three years because of falling home video revenue, even though distributors have had stronger results at the box office.

Mr. Prough declined to comment specifically on the MGM transaction to avoid possible conflicts should his company become involved.

As recently as September, Disney paid $4 billion, a 29 percent premium over market price, to acquire Marvel Entertainment, proving that a film company built around superheroes and fantasy sequels could still command big bucks.

Yet the market capitalization of Lionsgate Entertainment, an independent studio, has tumbled to about $650 million, roughly half what it was three years ago, despite steady additions to its asset base from the filmmaker Tyler Perry, from the “Saw” horror franchise and from the television series “Mad Men.”

Pegging the market value of any particular studio is treacherously difficult because so much depends on the willingness and ability of buyers to pay a premium for access to a glamorous world in which face time with movie stars and tickets to the Oscars remain very much a part of the package.

In the case of MGM, the glamour factor is low. It has all but receded from film production and had only one release last year — a dismally performing remake of “Fame.” MGM controls the James Bond and Pink Panther franchises, and retains potentially lucrative film rights to “The Hobbit.” But without the leverage of new hits, the studio’s 4,000-film library has become less valuable.

In years past, when growing home video revenue helped lift the film business, studios could take considerable abuse and still hold their value. Thus, Kirk Kerkorian, when he owned MGM in its various incarnations, managed to sell the studio profitably at least four times. Before selling to the current owners for $2.85 billion and about $2 billion in assumed debt in 2004, Mr. Kerkorian had bought it from Credit Lyonnais, the French bank, in 1996 for $1.3 billion.

The Coca-Cola Company did similarly well with Columbia Pictures in the 1980s. After buying the studio for about $750 million in 1982, it restructured the operations, and in 1989, sold what by then was a 49 percent interest in Columbia Pictures Entertainment to the Sony Corporation for roughly $5 billion in cash and assumed debt.

Marvin H. Davis, the oil entrepreneur, paid about $480 million to buy 20th Century Fox in a pair of transactions in the early 1980s. He then sold to the News Corporation, controlled by Rupert Murdoch, in stages for about $575 million, having drawn some millions from the studio in cash flow in the interim. The News Corporation still owns Fox, which, Mr. Murdoch pointed out on a recent investors’ conference call, yields more than its purchase price in profit every year.

Following the ins and outs of Universal is more difficult, as the studio went through a series of complicated sales, in which its ownership moved from MCA Inc. to Matsushita to Seagram to Vivendi to General Electric, and now to its proposed owner, a co-venture between G.E. and Comcast.

The bundle of operations within which the studio was sold changed over the years, making it virtually impossible to isolate its exact value. But the buyers appear roughly to have matched what Matsushita paid for the studio when it bought MCA’s various assets, which then included a music company, for $6.6 billion in 1990.

Even Universal, a well-tended studio despite its recent troubles at the box office, may now be worth less,

however — at least until some new technology once again raises the value of its library.

“If Comcast wanted to sell Universal as is, I don’t think getting close to $6 billion would be possible,” said Mr. Smith, the analyst.

Hollywood busts the plan

Show business rarely adheres to rules
By PETER BART
"Paranormal" crashed through the $150 million barrier recently, promptly inspiring its distributor, Paramount, to announce a new program of micro-budget pictures. The dubious conceit: That Hollywood can replicate the "Paranormal" phenomenon (its budget was $15,000).

Meanwhile, the exuberant reception accorded "Avatar" prompted its auteur, Jim Cameron, to reveal that he is prepping a program of films designed to exploit "Avatar's" breakthrough technology. Cameron did not specify whether the follow-up movies would aspire to "Avatar's" budgetary heights (Cameron's production cost totalled somewhere between $300 million and $400 million, depending on which accounting rules you follow).

If Avatar achieves something close to "Titanic"-like success, it will further reinforce the unique role that technology has played in Hollywood filmmaking. In most industries, technology has brought extraordinary cost savings, while in Hollywood it has created giant cost overruns.

One reason is that filmmakers have been incapable of curbing their appetites for effects that are "bigger" and "better." Another is that studio managements have proven extraordinarily inept about managing effects budgets or the outside contractors who violate them. Testifies the producer of one of the year's hit effects movies: "Dumb strategies by studio management added $35 million to my final costs."

Whether or not "Avatar" and "Paranormal" ever appear on a double bill, the two films dramatize the polarization of the Hollywood agenda. Studios are trying to nurture either very pricey franchise films or very inexpensive projects, often to the neglect of the "tweeners" that have racked up surprising numbers this past year. Executives find comfort in the fact that a conventional disaster movie like "2012" can gross almost $700 million around the world (two thirds of it from foreign markets). Its success reinforces basic corporate business strategies.

On the other hand, how do you account for a $460 million blockbuster like "The Hangover," a movie without star-casting or special effects or even an entirely coherent plot? Surely, "The Hangover" will go unrewarded with an Oscar, since comedy has traditionally been ignored by the Academy. But its success cannot be ignored by the studios for this key reason: It's a vivid reminder to the conglomerates that Hollywood has always defied efforts to come up with a business plan. Hits happen at any budget. And the double bill from hell will happen, too.

New Paramount division will think small

I hate to say I told you so, but.............




The as-yet-unnamed unit will concentrate on developing only movies with a production budget of less than $100,000.

By John Horn

December 11, 2009

Fresh off the stunning success of "Paranormal Activity" -- a $15,000 thriller that has grossed more than $107 million in domestic release despite little paid advertising -- Paramount Pictures is set to launch a new production business for movies budgeted at less than $100,000.

The as-yet-unnamed division's initial plan is to finance as many as 20 "micro-budget" movies annually starting in 2010, Adam Goodman, president of Paramount's film group, said Thursday.

Funds for the movies -- about $1 million annually -- will be part of Paramount's existing production budget. The division does not plan to acquire completed movies at film festivals and markets, as traditionally has been the case with studios' specialized film divisions.

The move comes as studios wrestle with spiraling production budgets -- Dec. 18's "Avatar," made at a cost of at least $310 million, is Hollywood's costliest movie ever -- and escalating marketing expenses just as DVD income is plummeting.

Some of 2009's most profitable movies have been modestly budgeted works that grossed huge multiples of their costs, including "Paranormal Activity," "The Hangover," "District 9" and "The Blind Side."

Moviegoers, having grown accustomed to viewing YouTube videos, are no longer put off by the shaky camera work and low production values typically associated with inexpensive films. January's Sundance Film Festival is launching a programming category, called Next, dedicated to movies made for less than $500,000.

"I feel very strongly we need to be contrary in our thinking," Goodman said. "Everybody has the ability to create content right now."

Not all the micro-budgeted movies will be released theatrically.

Instead, the division will operate much like a studio's development slate, where screenplays are purchased, rewritten and in some cases turned into movies. Paramount plans to target both established filmmakers and newcomers with its micro-budget pitch. A current Paramount executive will run the business, but the selection has not been revealed publicly.

Some of the movies may end up serving as "calling cards" -- a showcase of a novice director's storytelling talent for a future project. A handful of films may contain enough good ideas to merit a bigger-budget remake. And another group may rise to the top of the heap, getting a theatrical release. While some of the movies will be horror and thriller titles, there is no specific genre directive, Goodman said.

Because thousands of theaters are now equipped to show digital movies, the micro-budget productions can be distributed without the added expense of striking film prints, which can cost more than $1,000 apiece. Paramount also believes the films can be marketed without costly television commercials, print advertisements and billboards, instead relying on the grass-roots word-of-mouth that helped propel "Paranormal Activity" to its huge profit.

Some of Paramount's micro-budget movies could be released in just a handful of midnight screenings to gauge audience interest before a wider (and costlier) national release.

Paramount is not the first big studio to try to play in a smaller sandbox. 20th Century Fox launched (and recently closed) Fox Atomic, a division dedicated to genre films that struggled with such releases as "Turistas" and "Jennifer's Body." Universal Studios also just exited the business, selling its Rogue Pictures ("Doomsday," "The Return") to Ryan Kavanaugh's Relativity Media.

"Paranormal Activity" has spawned other movies inside Paramount. The studio is developing a sequel to the spectral demon movie from director Oren Peli and producer Jason Blum. The Viacom-owned studio recently bought Peli and Blum's next movie, "Area 51," a drama about three kids who sneak into a government-run alien storage facility, for about $7.5 million.

With challenge comes opportunity.

Execs seek opportunity in challenges
By DIANE GARRETT
With challenge comes opportunity.

That was the mantra at Variety's Future of Film Summit in Santa Monica on Tuesday. Panelist after panelist invoked the aphorism in between talk of broken business models and the need to trim costs accordingly.

"We are in the middle of a seismic revolution, not evolution, in the film business," said Paula Wagner, now an indie producer with Chestnut Ridge Prods., during her keynote conversation with Variety prexy Neil Stiles.

Wagner stressed the need to rein in development and marketing costs to adjust to the new realities of distribution. "We're in that place that we knew was coming," she said of the technological changes transforming Hollywood.

She said mid-tier movies have an especially tough time breaking through the clutter of entertainment choices and therefore require sizable marketing expenditures. "If it's not a brand or franchise, youmight be spending as much if not more on marketing," she said.

"The economic model isn't changing fast enough to enable movies to be made across the broader spectrum," concurred Morgan Creek Prods. chief operating officer and co-chairman Rick Nicita in the game changers panel later in the morning. The exec, a longtime agent and spouse of Wagner, observed that smaller movies and bigger tentpoles have been able to succeed in this climate, but "movie economics have malfunctioned in the middle."

The problem, he said, is that it's impossible to quantify marketing campaigns. There's no way to tell whether extra coin poured into marketing made the difference. When in doubt, studios do not cut marketing budgets, he observed; they make them bigger. "It's fear," he said. "CYA -- cover your ass."

Nicita, who nonetheless remains committed to mid-tier films, predicted that there soon would be an all-platform day-and-date release of a major title. Comcast's acquisition of NBC Universal should speed that up, he added.

IFC exec veep Lisa Schwartz noted that there was a lot of resistance to the company's day-and-date strategy when it began releasing movies on multiple platforms simultaneously four years ago, but filmmakers have grown more accepting. The company distributed more than 200 pics, many of them with smaller budgets, last year over its various platforms. Five of them ­ -- including "Che," "Gomorra" and "In the Loop" -- generated more than $1 million at the box office.

"Four years ago we saw things were changing and frankly were a little broken on that sort of film," Schwartz said.

The problem with simultaneous VOD, however, is that many investors and filmmakers still insist on a theatrical release as an indication of quality. And major exhibitors resist such simultaneous releases.

Schwartz's co-panelist Oren Peli admitted he refused VOD and home entertainment distribution offers because he believed in the theatrical potential of "Paranormal Activity," a movie that cost him $15,000 to make.

"After I saw how the movie played on bigscreen at festivals, I rejected those offers," said the writer-director, who's now busy on his second movie, "Area 51." "We pushed really hard to get a theatrical release."

Peli naturally felt vindicated since his movie, once slated as a direct-to-video release, has made more than $100 million at the domestic B.O.

Panelists outlined a chicken-or-egg scenario with financing and domestic distribution. Without domestic distribution, it's difficult to get financing, but financiers want to know that the project has that distribution before they fork out coin.

"Without having that domestic guarantee, you have a lot of questions," said Rena Ronson, co-head of UTA's independent film group at the afternoon session on overseas markets.

"The biggest challenge right now is the domestic theatrical piece, which has become a really empty, funky place," said Groundswell Prods. founder and CEO Michael London in the finance session.

Bill Block, founder and CEO of QED Intl., noted there are 25-30 big projects now in production with major movie stars that don't have domestic distribution. He said the indie community is rooting for Bob Berney's Apparition Films and Mark Gill's Film Department to pick up some of the slack now that studios have scaled back their specialty arms.

The key to survival, Block reiterated, is to cut those costs.

"If there's any path for all of us, it's bringing those costs down," Block said. "The revenue has come down. That's OK. We'll bring costs down."

In case of "District 9," he points out, Weta did not do the special effects even though the project was backed by Peter Jackson. "It was too expensive."

He said that producers must "give talent a fair shake with a real transparent backend. We need to find our way to a better model that rewards today's box office performance."

Adding to the financial pressure: Foreign coin has dried up due to the economy and shift toward local productions. According to Stuart Ford, founder and CEO of IM Global, international coin that once would have made up 40%-50% of box office now accounts for 10% "on all but the most slamdunk commercial movies."

"I think for the last five years there were a lot of free lunches," said Ashok Amritraj, chair and CEO of Hyde Park Entertainment, alluding to Wall Street coin that pumped biz coffers for a spell. "But that has stopped."

He said international companies are afraid to step up with "stupid money." And they've gotten choosier about which projects they will buy in pre-sales.

"We would like foreign companies to come in," he said. "We love it when a 'Twilight' happens, because it keeps the foreign guys happy and in business."

The good news, panelists said, is that agents and talent have become more aware of how different the environment is today and have reduced expectations accordingly. The growth of VOD domestically and internationally was also cited as an encouraging sign by financiers.

"The toughest moment was six to eight months ago, when there was a lot of denial about what was going on out there," London said. "Now there are a lot of green shoots out there."

London said indie producers and financiers are "all scrambling to find out what whether the answers lie in VOD or home entertainment."

"As all that happens, the movie business will move back to much more rational process," he said. "Audiences are still really hungry for good movies," he said.

Separate panels touted technological advances in 3D and home entertainment delivery as other developments that will energize the business.

The 3D format "provides us an opportunity to reinvigorate the experience in the theater," said Ed Leonard, chief technology officer of DreamWorks Animation. "3D done well is an incredible tool for our creative teams -- not as a gimmick, but as a vehicle to really pull you into the story."

(Cynthia Littleton contributed to this report.)

Read the full article at:
http://www.variety.com/article/VR1118012437.html

CBS Films takes 'Vengeance'

'Taken' writer Robert Mark Kamen sets action pitch
By MICHAEL FLEMING
CBS Films has made a preemptive deal to acquire "Vengeance," an action pitch by scribe Robert Mark Kamen. Erwin Stoff will produce.

While material sales are few and far between in the waning days of 2009, CBS Films prexy Amy Baer stepped up to the chance at an action genre entry with a modest budget that is very much in the vein of "Taken," the 2008 sleeper hit Kamen wrote with Luc Besson.

"Basically, it's a contemporary revenge love story -- what happens when violence meets love," Kamen said. "The main characters are 20 and Italian, and there are themes that echo films like 'The Godfather.' It's about family loyalty and how much someone owes their family and the past. It's not set in the gangster milieu but just outside it."

Kamen, who said he and Besson have scripted a sequel to "Taken" that will get made based on star Liam Neeson's availability next year, is working with Stoff for the first time since they started out together with the intention to become writing partners.

Read the full article at:
http://www.variety.com/article/VR1118012351.html

Hollywood's get-rich-quick era is over

Paula Wagner gives keynote at Future of Film
By CYNTHIA LITTLETON
The get-rich-quick era in Hollywood is over, Paula Wagner said during her keynote Q&A at Variety's Future of Film confab at the Sheraton Delfina hotel in Santa Monica.

"It's not the time to come in to the movie business to get rich quick," Wagner said during the conversation with Variety Group prexy Neil Stiles.

Wagner, the former head of Cruise/Wagner Prods and former head of United Artists, said that compared to the 1980s and '90s, when creative talent could count on rich upfront paydays on projects, the new ethos of austerity calls for talent to work more "on spec" in exchange for participation in success.

"Big dollars are not flowing from the creation of product" anymore, she emphasized. The dealmaking and development process needs to change and become much more collaborative with the goal of getting the best possible product on the screen.

"Let's make movies, not deals," Wagner said. "Let's write movies, not scripts."

One of the toughest aspects of the biz these days is what Wagner, who recently launched her own shingle, Chestnut Ridge Prods, called "the middle" tier of pics.

"Studios are about brands - safe, comfortable - only hit movies. They don't want to touch the middle," she said. "Studios will make a movie out of Tide (laundry soap) if they think it'll work."

A big problem for a pic budgeted in the $35 million range is soaring P and A costs.

"If it's not a brand or a franchise, you'll spend probably more money to market it" than on production, she said, adding that everyone involved in film needs to "scrutinze" marketing costs.

As an indie producer, Wagner said she's very focused on finding the best way to deal with the exponential growth in distribution options for pics.

"The real issue now is distribution channels," she said. "We need to know what size screen we're working for."

The movie biz has always faced dynamic changes - from the dawn of talkies to the 1948 breakup of the majors and their exhibition holdings - but the transformation underway in the present day are staggering, Wagner said.

"We are in a seismic revolution in the movie business," she said. But the good news is, as domestic B.O. approaches the $10 billion mark, the aud's appetite for movies shows no sign of slowing down.

"More people are going to the theaters," she said. "Something is being done right."

Thesp Joe Pantoliano was among those in the aud for Wagner's chat. He got a laugh out of the room in asking why studio execs aren't taking pay cuts at a time when actors are facing huge drops in income compared to just a year ago. Wagner reiterated her earlier statement that "everyone" in the film biz needs to get used to more modest paydays in order for the biz to thrive.

Read the full article at:
http://www.variety.com/article/VR1118012394.html