Boxoffice-September.1997

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NATIONAL
NEWS
MOVIEFONE WINS $22 MILLION
JUDGEMENT FROM PACER/CATS
An arbitration panel ordered ticketing systems
manufacturer Pacer/CATS to pay a
whopping $22.7 million to MovieFone, Inc.
in a judgement based on MovieFone's claim
that Pacer/CATS reneged on a 1 992 contract
to provide hardware to the phone ticketing
company, which would have helped
MovieFone to expand and improve its teleticketing
operations.
The big post-judgement question is: who's
going to pay? Key Pacer/CATS assets were
acquired by ticketing giant (and MovieFone
competitor) Ticketmaster in 1994, which
rolled those assets into another entity, called
CCS. MovieFone claims it was Ticketmaster's
acquisition of Pacer/CATS assets and the rivalry
between the two companies that caused
Pacer/CATS to fail to honor its MovieFone
commitments and that therefore Ticketmaster
is liable. Ticketmaster claims it isn't responsible
for any aspect of the judgement, since
Pacer/CATS as a company is unrelated to
Ticketmaster, and because no Ticketmaster
executives were involved with or questioned
during the arbitration.
A transcript of the three-member panel's
decision appeared to support MovieFone's
position. "Pacer/CATS materially breached
and blatantly violated the agreement between
the parties," the panel declared in part.
"Pacer/CATS, Ticketmaster and [former
Pacer/CATS parent] Wembley secretly entered
into a transaction to strip Pacer/CATS of
the resources necessary to perform its agreement
with MovieFone and, under cover of this
concealment, developed a common plan and
purpose, the aim of which was to terminate
the agreement and demolish the business."
The panel also declared that Ticketmaster's
Pacer/CATS division CCS "is explicitly bound
by its terms and liable for breaches that it
committed, or were previously committed by
Pacer/CATS." The panel pointed out that CCS
"since its inception. ..has continued to do
business under the same trade name and logo
as Pacer/CATS, using the same personnel,
office, phone number, stationery, business
cards and other paraphernalia."
The $22.7 million judgement was decided
upon to reimburse MovieFone for the development
costs related to its own proprietary
tele-ticketing system after Pacer/CATS faltered
in its contractual obligations.
THE LION LANDS ORION, GOLDWYN
As Metro-Coldwyn-Mayer Inc. finalized its
deal to buy Orion Pictures and Goldwyn Entertainment
Co. from Metromedia Intl. Group
(MIC) to a tune of $573 million, it also gave
out pink slips to Orion Pictures vice presidents
Brad Krevoy and Steve Stabler, who are negotiating
for a settlement of their five-year contracts
with Metromedia. Reportedly a total of
85 Orion employees were terminated immediately,
with approximately 136 employees
to stay on during the transition, of whom
25—mostly the distribution executives—will
be absorbed intothestudio, while the rest will
find their jobs eliminated over the next nine
months. MGM plans keep the Goldwyn name
as an art-film label. The fate of the 35-employee
Goldwyn unit, including Goldwyn president
Meyer Gottlieb, has yet to be determined.
MGM decided to acquire Orion and Goldwyn
in order to more than double the size of
its current library. The 2,200-title library from
Orion and Goldwyn includes "Dances With
Wolves" and "The Silence of the Lambs" and
now gives MGM "the largest modern film
library in the world," according to MGM
chairman and CEO Frank Mancuso. The library
is expected to significantly enhance the
studio's operating cash flow. Some industry
insiders say it puts MGM in a better position
for a possible initial public offering. MGM
added almost all of the 10 acquired completed
films from MIG to its practically empty
release slate.
INDIE EXECUTIVE SHUFFLE
Call it the independent executive exchange
program, but the shuffle at Miramax, October
Films and Live Entertainment is keeping everyone
on their toes. Miramax senior vice
president Scott Greenstein, often referred to
as the third Weinstein, left Miramax in June
and was taken on board at October Films to
replace co-managing executive Amir Malin,
who left October to take a top spot at Live
Entertainment.
Live, which was recently acquired by an
investors group headed by Bain Capital and
Richland Gordon & Co., named Malin copresident
in charge of domestic and international
film distribution, and announced its full
top team: Live chairman Roger Burlage remains
in place along with two new executives—Mark
A. Curcio, former head of Bain's
Los Angeles office, was named CEO, and Bill
Block, former head of West Coast operations
for talent agency International Creative Management,
was named co-president. Neither
Curcio nor Block has any previous film production
or film company experience.
Miramax, meanwhile, promoted Steven
Hutensky to senior VP of business and legal
affairs and Andrew Herwitz to senior VP of
acquisitions and business affairs. Greenstein
will join with October's other co-managing
executives Bingham Ray and John Schmidt.
Bain had bid on taking over October (before
LJniversal acquired a majority interest in the
indie) and Malin was known to be intrigued
by the potential of Live's 2,000-title library.
AMC IN PLANET HOLLYWOOD ORBIT
Planet Hollywood International, Inc. and
AMC Entertainment announced a joint venture
to develop and operate an integrated
moviegoing, dining and retail concept under
the branded name Planet Movies by AMC.
The 50/50 partnership will be responsible
for the creation and marketing of themed
environments combining AMC megaplexes
with Planet Hollywood restaurants as well as
other dining, retail and movie-related outlets.
The venture plans to open complexes worldwide;
to kick things off, seven existing AMC
'plexes encompassing 1 50 AMC screens will
be adapted to the Planet Movies concept. The
re-branded locations include AMC's Pleasure
island 24-plex in Orlando, Fla., which is located
across the street from Planet Hoi lywood's
most successful restaurant and retail unit.
The co-venture will own and operate all
subsequent units, including eight to 10 new
complexes with a total screen count between
200 to 250, which are to be built in the next
18 to 24 months. After that. Planet Movies
anticipates rolling out new facilities at the rate
of five to 1
sites per year.
MR. VALENTI GOES TO MOSCOW
Jack Valenti, chairman and CEO of the
Motion Picture Association of America
(MPAA) and chairman and CEO of the Motion
Picture Association (MPA), announced the
appointment of Simon Barsky to the post of
senior vice president and general counsel of
both the MPAA and its international counterpart,
the MPA. Barsky, who has been with the
MPAA since 1978, will oversee all of the
associations' legal affairs worldwide.
However, Valenti will continue to be involved
with one of the most prominent international
legal affairs affecting the industry: the
ongoing battle against the piracy of LJ.S. films
in foreign countries. Trade war threats against
major offenders such as China have loomed
for months as an ultimatum to incite action to
solve the problem.
In July, Jack Valenti departed for Moscow
to meet with a number of the country's highranking
government officials on the issue of
piracy. Russia is one of the largest markets in
the world for pirated U.S. films, accounting
for an estimated annual revenue loss of $300
million. Upon arrival in Moscow, Valenti met
with the Russian audiovisual industry and
launched the Russian Anti-Piracy Organization,
a new joint initiative to fight piracy. As
Valenti pointed out in a statement, "Piracy
steals from us all. Nikita Mikhalkov's awardwinning
'Burnt by the Sun' and Andrei
Konchalovsky's new work 'The Odyssey' are
just two examples of Russian works to suffer
in pirates' hands."
AU REVOIR, RYSHER
After three years in motion picture production,
a series of boxoffice losses has prompted
Rysher Entertainment to pull out of the movie
industry. It will focus exclusively on TV operations,
phasing out all theatrical production
activities. The move will result in the elimination
of about 40 jobs. CEO Tim Helfet said in
a July 8 meeting that Rysher had lost money
on its theatrical product, having never managed
to score a major boxoffice hit. The company
suffered substantial losses on the
MGfvVUA-distributed "Turbulence," which
cost nearly $60 million to make but grossed
only $11.5 million domestically, and "The
Evening Star," distributed through Paramount,
which grossed $12.5 million and resulted in
losses of more than $30 million. The total cost
to Rysher's parent company, Atlanta-based
Cox Enterprises, is estimated at $200 million.
Other Rysher projects to bomb were
"House Arrest," "Exit to Eden" and "Destiny
Turns on the Radio," while the company's hits
included "Private Parts," "Primal Fear" and
"Big Night." Rysher will produce one more
film, "EugeneOnegin," starring Ralph Fiennes
and Liv Tyler.