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The Mad Money Men
by Sharon Waxman
January 2008 Issue
January 2008 Issue
A new Hollywood studio makes its debut this month with a film about, fittingly enough, an audacious attempt to make a pile of cash.
The Sundance Curse
The most prestigious award at the Sundance Film Festival, which takes place in January in Park City, Utah, is the Grand Jury Prize. But in recent years, artistic recognition has led to commercial disappointment. See All Video & Multimedia
Hollywood's screwball king and the venture capital firm Sequoia Capital are rewriting the rules of the entertainment business. But will Funny or Die survive? Read More
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The Company, through its ownership of interests in subsidiaries and other companies, is engaged in the video and on-line … View More
Here's a Hollywood caper: A few friends hatch a bold scheme to wring money out of a highly sophisticated system by exploiting a gaping opportunity.
That, more or less, is the plot of Mad Money, a new comedy about a trio of desperate Federal Reserve workers (Diane Keaton, Queen Latifah, and Katie Holmes) with a big idea. But it also, in a sense, describes the origin of the company that's releasing the movie: Overture Films, a new full-service Hollywood studio headed by former MGM executives Chris McGurk and Danny Rosett.
A wholly owned division of John Malone's
Liberty Media, the studio intends to make or acquire low- to midbudget films ($15 million to $30 million), distribute them in theaters, and then funnel them through other companies controlled by Liberty: pay-cable channels Starz and Encore, internet-download service Vongo, and home-video unit Anchor Bay Entertainment.
It's these internal distribution outlets, McGurk and Rosett say—plus a five-year, $500 million annual commitment from Malone—that set Overture apart from other high-risk Hollywood startups. Wall Street money has poured into the movie business in the past few years, but most of the new players rely on the major studios for distribution. Overture, in contrast, is counting on its corporate siblings to wring maximum revenue out of its films.
McGurk, the chief executive, and Rosett, the chief operating officer, have been making this argument for more than a year now. Mad Money, a thoroughly pleasant crime comedy, is their first release and a prototype for what's to come—low-risk entertainment that skews toward an older audience and plays well on cable.
"We built this company to be about the 10 movies we make, acquire, and market every year," says McGurk.
But like any Hollywood seedling, the studio's success will depend on its ability to nurture hits. Overture has acquired Righteous Kill, starring Robert De Niro and Al Pacino as burned-out cops tracking a serial killer, and has green-lit two films that it has produced itself: Traitor, starring Don Cheadle as an illegal-arms trader, at a budget of $25 million; and Last Chance Harvey, a romantic comedy starring Dustin Hoffman and Emma Thompson, on a shoestring budget of $14 million. McGurk and Rosett say that by keeping costs moderate to low, they've minimized the potential for catastrophic loss while leaving open the possibility of finding a major hit on the order of Legally Blonde, which the duo oversaw when they were at MGM.
This underscores a challenge that confronts any Hollywood startup. With no track record, McGurk and Rosett are unlikely to get first crack at the most promising movies. Like other smaller outfits, the studio may have to content itself with small-time independent fare or movie stars' pet projects that have been turned down elsewhere. "If you look at people who have tried this in the past, it hasn't worked," says Brad Ruderman, managing partner of Ruderman Capital Partners in Beverly Hills, who cites Joe Roth's failed Revolution Studios and the spotty performance of the Weinstein Co.
Overture will also face the same scheduling gridlock that plagues the rest of the industry. That was part of the problem in the fall of 2007, when Hollywood had one of its most dismal box office performances in recent memory. Too many movies, too little quality. Hostel Part II, anyone?
That, more or less, is the plot of Mad Money, a new comedy about a trio of desperate Federal Reserve workers (Diane Keaton, Queen Latifah, and Katie Holmes) with a big idea. But it also, in a sense, describes the origin of the company that's releasing the movie: Overture Films, a new full-service Hollywood studio headed by former MGM executives Chris McGurk and Danny Rosett.
A wholly owned division of John Malone's
Liberty Media, the studio intends to make or acquire low- to midbudget films ($15 million to $30 million), distribute them in theaters, and then funnel them through other companies controlled by Liberty: pay-cable channels Starz and Encore, internet-download service Vongo, and home-video unit Anchor Bay Entertainment. It's these internal distribution outlets, McGurk and Rosett say—plus a five-year, $500 million annual commitment from Malone—that set Overture apart from other high-risk Hollywood startups. Wall Street money has poured into the movie business in the past few years, but most of the new players rely on the major studios for distribution. Overture, in contrast, is counting on its corporate siblings to wring maximum revenue out of its films.
McGurk, the chief executive, and Rosett, the chief operating officer, have been making this argument for more than a year now. Mad Money, a thoroughly pleasant crime comedy, is their first release and a prototype for what's to come—low-risk entertainment that skews toward an older audience and plays well on cable.
"We built this company to be about the 10 movies we make, acquire, and market every year," says McGurk.
But like any Hollywood seedling, the studio's success will depend on its ability to nurture hits. Overture has acquired Righteous Kill, starring Robert De Niro and Al Pacino as burned-out cops tracking a serial killer, and has green-lit two films that it has produced itself: Traitor, starring Don Cheadle as an illegal-arms trader, at a budget of $25 million; and Last Chance Harvey, a romantic comedy starring Dustin Hoffman and Emma Thompson, on a shoestring budget of $14 million. McGurk and Rosett say that by keeping costs moderate to low, they've minimized the potential for catastrophic loss while leaving open the possibility of finding a major hit on the order of Legally Blonde, which the duo oversaw when they were at MGM.
This underscores a challenge that confronts any Hollywood startup. With no track record, McGurk and Rosett are unlikely to get first crack at the most promising movies. Like other smaller outfits, the studio may have to content itself with small-time independent fare or movie stars' pet projects that have been turned down elsewhere. "If you look at people who have tried this in the past, it hasn't worked," says Brad Ruderman, managing partner of Ruderman Capital Partners in Beverly Hills, who cites Joe Roth's failed Revolution Studios and the spotty performance of the Weinstein Co.
Overture will also face the same scheduling gridlock that plagues the rest of the industry. That was part of the problem in the fall of 2007, when Hollywood had one of its most dismal box office performances in recent memory. Too many movies, too little quality. Hostel Part II, anyone?
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