Hollywood: Monsters, Meteors, And Management Shakeups

Studios are pruning, and this summer's blockbuster crop is down

In Deep Impact, the Paramount disaster epic that will kick off the summer movie season on May 8, a killer meteor lands in the Atlantic. Back in Hollywood, there are even more terrifying forces bearing down: management shake-ups at two major studios and cutbacks nearly everywhere. At Warner Bros. Inc., two executives have been fired, and a raft of films have been "indefinitely" postponed because--horrors--they cost too much. At Universal Pictures, where four execs hit the road, parent Seagram Co. put forth the novel idea that a movie might do better at the box office if it were marketed like, say, a bottle of Chivas. At Sony, Price Waterhouse has spent a year quietly assessing ways it could streamline management.

The result: With the approach of the all-important summer season--which has been a bloodbath in recent years, as big-budget films annihilated one another and crowded out smaller flicks--some un-Hollywood-like moderation appears to be creeping in. Overall, the majors--including MGM/UA--are releasing 40 films this summer, 20% fewer than last year. While the industry is still swinging for the fences with event films such as Sony's Godzilla and Walt Disney Co.'s Armageddon, fewer movies with $100 million-plus budgets are going ahead. And, to save money for potential blockbusters, studios are greenlighting fewer moderate budget films, too--those coming in at $30 million to $50 million.

These cutbacks could be key as moviemakers struggle to make a profit on a modest 5% growth in box-office receipts. Indeed, if you factor out the megahit Titanic, the box-office sales would be flat, despite the higher prices for tickets.

Are studio heads, who last year approved projects that boosted the average cost of making and marketing a movie by 27%, to $75.6 million, finally drawing the line? "That's giving us a lot more credit for collective thinking than we deserve," says Joe Roth, studio chairman at Disney.

Indeed, spending is still rampant in some quarters. Mel Gibson stands to make $50 million for coming back to do Lethal Weapon IV this summer. And the marketing and production costs of both Armageddon and Godzilla approach $200 million.

But the first signs of industry consciousness-raising are there. Warner Bros. is halting two big-budget films, Superman Lives with Nicolas Cage and I Am Legend with Arnold Schwarzenegger. And at Fox, still smarting despite the money flowing in from Jim Cameron's $200 million Titanic, several departments have been overhauled to cut production costs. Another economy move: a new central digital-effects unit. "Other years, we might have gone ahead with a film like Superman that might not have been ready," admits Warner Bros. Chairman Bob Daly. "Not this year. Not with the costs these things have gotten up to."

RUNAWAYS. A combination of timing, management overhauls, and just plain luck have also cut down the number of films that will be released this summer. Sony, which brought in new managers two years ago, was able to get only two movies up for this summer, but they're banking on two biggies: Godzilla and Antonio Banderas in The Mask of Zorro.

The management shake-up at Universal left it without a big-budget film of its own, although it has a half-interest in DreamWorks' highly anticipated Small Soldiers, which Universal will distribute. After a year with such budget runaways as Titanic and Speed 2, Fox isn't spending more than $70 million on either of its big summer films: The X-Files Movie and Dr. Doolittle, starring Eddie Murphy.

With fewer special-effects extravaganzas, films such as DreamWorks' Saving Private Ryan, a Steven Spielberg-Tom Hanks World War II story, and Disney's Harrison Ford romantic comedy 6 Days, 7 Nights should do even better at the box office, with weekends to themselves. Another break: There will be a month between the two major animated films, Warner's The Quest for Camelot and Disney's Mulan, about a young Chinese girl who goes to war in place of her ailing father.

PASSING FAD? Theater owners, already feeling an earnings pinch, aren't happy about this summer's schedule. Some are praying for another sleeper like last year's The Full Monty, a small British film with big box-office appeal. "You've got to hope that some of the little films out there find a home," says Tony Reed, senior vice-president for film buying at Carmike Theaters.

Will this season's cost-consciousness prove to be another fleeting fad in the film capital? Warner says it's serious about change, and Disney's Roth says the studio will stick with a schedule of 15 to 20 films a year, about half its production in 1996. It's a trend, he says, that will catch on elsewhere. "This really is a business with lousy margins, and a lot of folks are starting to wonder just how much of a market there is out there for all of the product that we are making." That's a script that will play on Wall Street at least.

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