Boxoffice-July.1997

1 be
NATIONAL
NEWS
MO' MONEY FOR THE MOVIES
The first quarter profits for 1 997 are in and
the results, with the exception of Viacom,
look good across the board, making it official
that this was one banner first quarter for the
movies. Sony Corp. increased revenues more
than 1 ,000 percent over last year's disappointing
first quarter returns, posting $99.5
million in profit, thanks to strong boxoffice
from "Jerry Maguire," "Anaconda" and "The
Fifth Element." Sony Pictures Releasing continues
to look strong with the upcoming "Men
In Black," "My Best Friend's Wedding" and
"Air Force One." News Corp.'s profits were
up 38 percent for the quarter ending March
31 with $291 million profit, which is credited
to the boxoffice success of subsidiary 20th
Century Fox's reissue of the "Star Wars" trilogy.
It was the weakest quarter for the Walt
Disney Company, who still exceeded many
analysts' estimates and rose 63 percent over
last year's first quarter results to earn $333
million in profit, with the help of "Ransom,"
subsidiary Miramax's "The English Patient"
and the home video release of "Toy Story."
Time Warner Inc. posted $35 million in profit
despite its heavy debt. Viacom Inc. showed a
net loss of $ 1 8.7 mi II ion, brought down by the
Blockbuster Entertainment unit and a less than
blockbuster performance from Paramount,
which showed a cash flow decline of 25
percent. Seagram Co.'s corporate earnings for
the quarter more than doubled, posting $27
million in profits despite the fact that
Universal's hit "Liar, Liar" was released too
late in the quarter to help, though it will
certainly boost next quarter's profits.
Among exhibitors, first quarter profits were
well up from last year which is due, insiders
say, to the industry becoming a 12-month
business instead of a seasonal one. Regal
Cinemas Inc. posted a $8.5 million profit, up
85 percent from last year. AMC Entertainment
Inc.'s earnings were up 1 7 percent to $8.2
million. Cineplex Odeon Corp. showed $2.1
million profits against last year's $7.2 million
in losses. Cinemark USA Inc.'s first quarter
profits more than doubled from last year's
$2.5 million up to $5.1 million, thanks in part
to the addition of just over 220 screens added
last year.
GIANT-SCREEN GIANTS SETTLE
OUT OF COURT
Large-format companies, Imax and
Showscan ceased rattling sabers at each other
in May when they agreed to settled all
litigation
between them, one month before the first
lawsuit was scheduled to begin. The settlement,
which remains undisclosed, is not expected
to have a financial effect on either
company. The string of lawsuits first began in
February 1996 when Imax filed suit against
Showscan, charging copyright infringement
over similarities between Showscan's
Showmax and Imax's own large-format camera
and projection systems.
Showscan, in turn, filed their own complaint
against Imax for violation of Federal
anti-trust laws. Then again this February,
Showscan filed suit in U.S. District Court,
seeking to have the trademark of Imax Corp.
canceled because "Imax" had become a generic
term. Showscan's newly appointed
CEO, Dennis Pope, was said to be instrumental
in negotiating the settlement between the
two large-format companies.
POLYGRAM'S GAME FOR A NEW
DISTRIBUTION COMPANY
They've been working on the move for
years, but finally. Polygram Filmed Entertainment
unveiled a new film distribution company.
Polygram Filmed Entertainment
Distribution, that would work alongside PFE's
Gramercy Pictures to release motion pictures.
Andy Fogelson was named president of the
new unit by PFE president Michael Kuhn.
William Soady has been named president of
distribution and Peter Graves comes in as
president of marketing. Kuhn looks for
Polygram's distribution entity to emulate the
success of such distribution companies as
Miramax or October.
Polygram already distributes its own films in
foreign markets, including France, Australia
and Canada. Company sources say the $900
million in annual revenues from its 400-title
film library should maintain more than enough
financial strength to carry a domestic distribution
division, but industry insiders say it would
take several years of releasing 10-12 wide release
pictures before the new distributor wou Id
have a shot at the majors. Gramercy Pictures,
which released last year's "Fargo," will continue
under president Russell Schwartz as an
autonomous entity. The first release for Polygram
Distribution will be "The Game," a
David Fincher ("Seven") helmed thriller starring
Michael Douglas and Sean Penn.
LEED ON AT TRISTAR AS
COLUMBIA LOSES JOSEPHSON
ExM VP Chris Lee's move up to president
of production at TriStar Pictures makes him
the first Asian American to ever hold that high
a rank at a major studio. As the top executive
at TriStar, Lee is effectively replacing the former
president of TriStar Pictures, Robert Cooper,
who resigned in May after less than a year
on the job.
Lee oversaw "Jerry Maguire" said he will
continue to oversee TriStar's "Godzilla" and
"Starship Troopers" even as he takes on his
new responsibilities. Lee started as a script
reader and worked his way through the ranks.
He was also the executive on "The Fisher
King," "Philadelphia" and "Legends of the
Fall." The installment of Lee ends speculation
that Sony Pictures Entertainment was planning
to merge Columbia and TriStar into one
entity, since SPE president and COO John
Calley had already integrated the story and
business affairs units into one entity.
Insiders say Calley never got along with
Cooper, who was brought in by former SPE
head Mark Canton to TriStar last summer from
HBO Pictures. When Canton left last year and
Calley was appointed in November, Cooper
became frustrated with Galley's very handson
approach that didn't allow Cooper to operate
autonomously. Rumors say Cooper may
land at PolyGram or DreamWorks.
Meanwhile, Columbia Pictures president
of production Barry Josephson, who was rumored
to be a likely candidate to replace
Cooper, will leave before his contract is up
October 1 . He may end up with a producing
deal at Sony. His position will not be filled, as
Columbia Pictures president Amy Pascal will
take over Josephson's responsibilities. Josephson
was considered one of the last executives
with strong ties to the former Canton regime,
as he was the first hire by Canton. Josephson
was responsible for overseeing such big-budget
action films as "Bad Boys," Money Train,"
"Anaconda," The Devil's Own" as well as this
month's "Men In Black" and "Air Force One."
UNIVERSAL'S BACK TO THE BANK
Universal Studios Inc. recently sealed a
$1.1 billion, biggest-deal-of-its-kind, threeyear
film financing agreement with Citibank
j
(Citicorp Securities), the very financial institu- !
tion that structured a similar $1
billion deal
last year with 20th Century Fox. The money
will go to financing 1 2-20 films per year (up
to 60 films overall). Since the financing facility
will be an "off-balance sheet" for Universal,
the debt won't show up on parent company
Seagram Co. Ltd.'s balance sheet.
Universal is just one of many major studios
looking for ways to pay for the high cost of
filmmaking without having to delve into the
pockets of its parent company. The off-balance-sheet
financing uses the anticipated
value of the future films, packaged together,
as a kind of bond or stock offering. The bank(s)
or investors buy into units of the entire group
of films rather than any one film. This way the
studio doesn't have to go to the parent company
but still gets to make movies, and the
investors share in the film's profits but don't
need to put all their eggs in one film basket.
The off-balance-sheet financing is becoming
a popular strategy that many studios are looking
into for possible financing. Time Warner Inc.
may line up a similar deal with Chase Securities
to provide funds to its New Line Cinema.
IS POPCORN INCLUDED?—MOVIE
THEATRE ADMISSIONS RISE TO $9
They say if it happens in New York, it's only
a matter of time before it happens everywhere
else in the country. If that's true, then moviegoers
across the U .S. wi 1 saddened to hear
the price of an evening at the movies is on its
way up. The Sony Lincoln Square multiplex
in New York City recently upped their prices
to an all-time high of nine dollars per ticket,
a cost that is more than twice the national
average for a trip to the silver screen.
Of course. New York is still better off than
Japan, where a movie ticket goes for the
equivalant of $ 1 5, but for American exhibitors
three questions come to mind: Is it a sign of
times to come? How much of that nine smackers
do the exhibitors get to keep? And, most
importantly, for that price, who can afford a
night at the movies? But not all is lost—while
New Yorkers may have to shell out the big
bucks for their trip to "The Lost World," the
price for a movie ticket in America still averages
out to a mere $4.41 .