Boxoffice-May. 1999

NATIONAL
NEWS
by Annlee Ellingson
DOLLARS LOST AT SEAGRAM
Seagram began to see the effects of its $1 0.4
billion acquisition of Polygram during the second
fiscal quarter ending Dec. 31, reporting a
net loss of $226 million, or 28 cents a share. A
year before, the company reported a profit of
$28 million, or eight cents a share, during the
same timeframe. Without Seagram's one-time
$405 million restructuring charge connected
with the Polygram acquisition, net income
from continuing operations fell to $18 million,
or five cents a share, compared to $58 million,
or 1 7 cents, the previous year. Other agents
leading to the loss include Universal's disappointing
boxoffice receipts from such releases
as "Meet Joe Black" and "Babe: Pig in the City"
and Polygram Filmed Entertainment's additional
loss of $32 million in the quarter.
Seagram is moving forward with its plan to
integrate PFE's international assets into Universal,
a step that doesn't bode well for film-side
employees. Universal pinkslipped the first 30
or so PFErs in mid-February. As many as 20
percent of the domestic distribution company's
"second floor" staffers are expected to be out of
work, including workers in marketing and distribution,
accounting and soundtracks.
DOLBY OUTSMARTED ON ONE
END, OUTSHINES ON ANOTHER
Dolby Laboratories' lawsuit against Smart
Devices has been dismissed by the United
States Court for the Northern District of California.
Dolby had sued the Atlanta-based
sound company for alleged patent infringement
in the engineering of its popular
Panastereo product line, claiming that Smart's
CM333 module, which decodes Dolby SR
motion picture encoded soundtracks, uses
noise reduction technologies developed by
Dolby and covered by Dolby patents. "We're
very pleased that the judge dismissed the
case," Smart founder and CEO Norm Schneider
told BOXOFFICE. "It is fairly simple. The
motions were made to the judge; the judge
looked over the stuff and dismissed."
Dolby saw significant victory on an entirely
separate front, however, announcing before
ShoWest that its digital sound platform is now
America's biggest seller. According to SMPTE
figures, Dolby Digital is installed on 9,338
domestic screens (1 9,824 worldwide).
MGM SEES RED
MGM posted an annual loss of $157.6
million, or $2.08 per share, last year compared
to a $1 28.1 million, or $4.47 per share,
in 1 997. The fourth quarter showed results just
as bleak: a loss of $43.7 million, or 41 cents
per share, though those numbers are up from
last year's loss of $82.5 million, or $1.64 a
share, for the same timeframe. Revenue rose
49 percent, however, to $1.24 billion compared
with $831.3 million the year before.
Quarterly revenue was up even more, with a
51 percent gain ($328.7 million vs. last year's
$217.2 million). Negative cash flow, too, was
better, especially at year-end: $48 million for
the year compared to last year's $49.1 million,
and $1 5.6 million in the fourth quarter compared
to last year's $56.9 million. MGM's
library did the lion's share of work in the film
division, generating a cash flow of $1 0.6 million
vs. last year's loss of $1 5.6 million.
ONE MOUSE IN THE HOUSE
Following the restructure of Disney's domestic
film division, chairman and CEO Michael
Eisner plans to develop a similar strategy
for the company's international division,
bringing film, television, video and consumer
product units under one Walt Disney Intl.
president. Former ABCinc. president Bob Iger
will take on these duties as well as act as
chairman of the ABC Group.
TECHNICOLOR, KODAK BOW
FILM PRESERVATION MEASURES
Technicolor has committed itself to film
restoration, establishing a new facility adjacent
to its main headquarters in Universal
City, Calif. The move came with the advent of
HDTV, digital TV and new home video formats
that will undoubtedly fuel an interest in
reconditioning classic films to fill the new
entertainment pipelines. Rami Mina, a 30-
year veteran in the industry, will head the new
Technicolor subsidiary.
Kodak is taking a more proactive approach
to film preservation, introducing its Panchromatic
Separation film 2238. The stock is
coated on a hardy Estar base that resists
shrinkage, chemical deterioration and other
physical damage. Besides prolongingthe shelf
life of new films. Panchromatic Separation
film can also be used to restore color films
with dye-fading problems and for specialized
optical special effects applications.
PIXAR'S VISION
Pixar Animation Studios has developed a
laser recording system that transposes digital
computer data into images on film stock that
will be used in the production of "Toy Story
2." Called PixarVision, the technology's solid
state lasers record on multiple film formats
with a higher quality and faster speed than
ever before—eight seconds per frame, compared
to 35. David DiFrancesco, who developed
the system in 1 996, received a scientific
and technical Oscar this year for his efforts.
"LIFE" IS BOUNTIFUL
Having broken Oscar records by registering
seven nominations for a foreign-language film,
Roberto Benigni's "Life Is Beautiful" went on to
break boxoffice records, becoming North
America's highest-grossing foreign film of all
time. The Holocaust comedy released stateside
by Miramax surpassed 1996's "II Postino,"
which garnered more than $21.8 million (and
also came from Miramax).
WHATEVER WERKS
Burbank, Calif.-based Iwerks Entertainment
had reason to celebrate the new year, despite
its fiscal second-quarter loss of $821,000:
That figure was down from a $3.5 million loss
the year before. Revenue figured at $8.6 million,
a 44 percent advance over the 5
million of a year ago. The giant-screen
ride-simulation company attributed its
newed success to stronger hardware sa
particularly in Asian markets; upgrades to:;
attractions at Six Flags theme parks; an
i
general reduction in expenses.
IMAX PROFITS AT AN IMIN
Imax Corp. saw its profits downswin.
,
1998 to $794,000, or 3 cents a share, a
percent decline from $20.3 million, or
cents a share, a year before. Imax blamed
i
losses on a one-time debt-offering char
writeoffs for fiscally disappointing films in
library, and its financially unsuccess
Ridefiim production unit. Revenue, howev
:
rose to $1 90.3 million, a 20 percent incre,
over $1 58.4 million a year before. Imax stc
rose recently on Street recommendation t
lowing Disney'sannouncementthattheinii
holiday run of its animated "Fantasia 20C
would appear at Imax locations.
MOVING BIONDI
Former Universal Studios head Frank Bior
Jr. hopes to pool a new fund to invest in me(
and entertainment companies with partr
Richard Reiss. The pair wants to raise $1^
million-$500 million for the venture, whi'
would consider a broad range of projects
such as start-up companies, buyouts and
nancing—^for investment and advisory servio
LARGO SLOWS DOWN
Japanese backer JVC Entertainment haste
minated its subsidiary Largo Entertainmen
foreign sales. Largo's only activities now w
be aoministering rights to about 30 films it h
in its
library through a servicing agreement
i
struck witn Summit Entertainment. Larj
i
knew it was in trouble when JVC pulled i
production financing lastyear, reducing Lar^
to a foreign sales agent.
PHOENICIAN FRANCHISER
Folding Phoenician under its own banne
Franchise Pictures will now handle the inte
national distribution of both their films. Phc
enician won't disappear, rather existing as
production unitforthecompany's low-budg(
pictures while Franchise puts out higher-buc
get and studio-level films.
SONY RUNS UP ITS TAB
Stunning the rest of Hollywood, Sony Pic
tures announced a $900 million non-cas
charge against earnings to comply with th
industry's
\
|
new bookkeeping guidelinestwice
the estimated amount. A Scnroder & Co
analyst put Hollywood's total cost at $2..'
billion. The bookkeeping standards that an
shaking things up include studio estimates oi
how much they plan to spend a year on talen
and marketing costs accounted for within th(
first three months of release.
THE BALCONY CLOSES
Film critic Gene Siskel, half of the thumbs
up, thumbs-down movie-reviewing broadcas
team of Siskel & Ebert, died in Februarv afte
a yearlong battle with complications from i
brain tumor. He was 53.
46 Boxoffice