Hollywood Immortal

[Chapter 360: Universal's Predicament]

After Linton Films announced the greenlighting of five new movies, every major film studio was stunned by his bold move. Not even the seven giants of Hollywood had ever launched five big films simultaneously.

Talent agencies and actresses went into a frenzy; everyone knew that a film produced by Linton Films had an exceptional ability to launch careers. Over three years, each movie's box office success had been explosive. The lead actresses all skyrocketed to stardom -- now, the lowest level stars in these films were already considered established second-tier Hollywood actresses. Everyone hoped to be the next breakout star.

But it wasn't just the actresses; competition among the male actors was equally fierce.

Such a colossal opportunity was simply impossible to miss. For a moment, all the major agencies unleashed their efforts, each showing off their best moves.

Unfortunately for them, all the female leads for these films had been secured by Linton already. The best they could hope for were supporting roles. As for the male leads, there was more opportunity. Except for Mission: Impossible, all male leads would be chosen through auditions led by producers and directors.

Besides Mira, none of the negotiating parties met directly with Linton.

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Universal's Lou Wasserman and Levitt Gore proactively came to visit.

Upon arriving at the 16th floor of Linton Tower, they were awestruck by Linton's ultra-luxurious office. Even as Universal's CEO, Lou was floored by how massive and extravagantly appointed the office was.

Their visit was, naturally, about investing in Mission: Impossible. According to the agreement between the two companies, Universal held at least 30% preemptive investment rights in the film, with the overall investment exceeding $50 million.

After learning the details of Mission: Impossible, Lou and Levitt had no objections to Linton's offer of $32 million plus 25% of North American box office revenue -- a very generous deal. Their only request was that their investment share be as high as possible.

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Universal was under immense pressure to deliver results. In '94, Universal Studios Group earned an unprecedented $730 million in profit, second only to Disney among the top seven studios.

On the surface, such earnings should have made them confident and driven.

But a closer look at the numbers revealed problems. Of that $730 million, $310 million came from their core business -- film production and distribution. Another $280 million came from their Universal Records subsidiary, and $80 million from Universal Studios theme parks.

But the remaining revenue streams -- from MCA Television Group, MCA Home Video and Pay-TV, Putnam Publishing, Cineplex Odeon theaters, Universal theaters, USA Cable, and the management of Universal's vast film and TV rights library across over 50 subsidiaries -- together barely made $60 million annually.

Though production and distribution showed $310 million in profits, $320 million of that actually came from cooperation with Linton Films. In other words, without Linton, Universal's core business was running at a loss last year.

Universal's own investment in 10 films last year yielded only one decent performer -- a live-action comedy called The Flintstones. The rest all lost money.

The only bright spot was Universal Records, which not only had cultivated Linton as a massive money-maker but also developed a new generation of pop icons like Shania, along with rising stars like Izumi Sakai and Vivian Chow, with profits steadily climbing.

Yet there were complications. Shania wasn't directly signed with Universal Records but with Sunlight Records -- an independent label with no equity stake, only a distribution partnership with Universal.

Panasonic Electronics of Japan wasn't just sitting idle or ignoring this -- they had already signaled irritation over the arrangement.

Sony Electronics had recently made a statement by ousting the two vampires from Columbia Pictures, Guber and Peters, setting a precedent.

If things didn't improve, Panasonic might cut Universal loose.

After lengthy discussions, the executives at Universal devised a strategy: increase cooperation with Linton Films while investing heavily in a few major projects to turn their production and distribution fortunes around.

Their current focus was Waterworld, with investment increasing from an initial $100 million to $175 million, hoping to replicate the success of Jurassic Park.

But just one Waterworld wouldn't be enough -- they also set their sights on the Speed sequel.

Speed had brought huge profits to both companies in '93 and showed initial signs of becoming a major franchise. Not following up with a sequel would be financial suicide. Ideally, they wanted to acquire the 60% rights to the Speed series held by Linton Films.

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Hearing Lou and Levitt's pitch, Linton couldn't help but think these guys were shamelessly taking advantage of foreign capital.

Universal Group had many premium assets and channels and, backed by Universal Studios, Universal Records, and MCA Television -- three big pillars -- they still couldn't make a profit. Some divisions were even losing money.

With revenue from cooperation with Linton included, Universal's overall profits paled compared to this small film company of his. Who knew how much of the profits were filtered into these managers' own pockets?

When he heard about Waterworld, Linton inwardly mourned for Universal for three seconds.

It was a legendary flop in Hollywood history -- an absolute disaster.

The project was a mess from the start, with budget overruns piling up until it reached an unimaginable $260 million.

In the end, it completely bombed at the box office, with both the audience and critics unanimously labeling it one of the ten worst films ever made. The losses were at least $150 million.

Luckily, Universal was a giant -- any smaller studio probably would have gone bankrupt.

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As for Mission: Impossible, everyone knew it was a guaranteed money-maker. After the successful release of The Man from Nowhere, Linton had solidified his standing in Hollywood and no longer needed Universal to shield him. He was not about to give up more investment shares.

Universal was granted 30% investment, but creative control stayed firmly with Linton Films, following a similar arrangement as with Speed.

Unlike Independence Day, the North American distribution of Mission: Impossible wasn't shared with Universal; Linton Films handled it solo. However, overseas distribution was fully entrusted to Universal.

Linton never planned a Speed sequel himself. If Universal wanted it and the price was right, he didn't mind selling the 60% rights for the sequel production. But neither he nor Catherine Zeta-Jones would have the time to star.

Without both of them leading the cast, no matter the script or director, a big-budget sequel casting new leads would definitely face significant challenges, and its box office prospects were very uncertain.

But none of these concerns were Linton's -- after friendly negotiations, Universal bought the entire 60% sequel production rights of Speed from Linton Films for $20 million, without any further revenue sharing.

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