High net-worth individuals usually work in industries where their money does the talking for them. Want to know how successful they are? Just check the bottom line.
The pic biz is an entirely different animal, where “success” is a variable term. For indie production companies, success sometimes means just staying in business. Sometimes it means creating films that people like or that win awards, but doesn’t rest solely on box office receipts. The baseline starts with having some work to judge. Few of the millionaires and billionaires who have entered the film industry in the last few years have completed enough films to judge them by, but there are some and we’ve detailed their progress below. How are they doing? Just check the bottom line.
Company: Participant Films, a finance company funded by Skoll
Key partner: Chris Adams
Evolution: Skoll started with Ovation last year, in partnership with producer Richard Lewis, but it was dissolved early in 2004. He’s started the new shingle with a stronger mission to create socially conscious films.
Strategy: Partner on four to six films a year that have a social message that also can be economically viable. The company will invest heavily in outreach, particularly through the Web. “Everyone looks at a dollar return on investment, but we look at a social return on a movie that is equally important,” says Adams.
In the works: “American Gun” (equity partner with IFC Films)
Completed (by Ovation): “Eulogy” (equity partner, Lions Gate releases Oct. 29); “House of D” (co-financed with Bob Yari; Lions Gate release)
Verdict: Skoll wasn’t happy with his first experience in the film business, so he started over quickly. This time, he wants to make sure his message gets out there. “American Gun” should be a good showcase.
Former hedge fund manager and part owner of the Chicago Bulls
Company: Endgame Entertainment, backed by an equity fund financed by Stern and unnamed investors
Key partner: Doug Hansen
Evolution: Stern had been producing Broadway plays and directing projects; he then decided to formalize a production company and fund a slate of films as an equity partner.
Strategy: To lay off risk among several investors and work with good companies. “The only way we’re going to stay in the business for 20 years is if we’re profitable,” says Stern.
In the works: “The Alibi” (equity partner with Summit); “Electoboy” (equity partner with Lions Gate); “Five Children and It” (equity partner with U.K.’s Capitol Films and Jim Henson Co.); “Hotel Rwanda”; “Proof” (equity partner with Miramax); “River Queen” (equity partner with New Zealand and U.K. Film Council); “Stage Beauty” (bridge loan); “Zombie Survival Guide” (equity partner with state of Louisiana)
Completed: “Harold and Kumar Go to White Castle”: provided bridge loan and some equity (New Line release)
Verdict: The first project to screen underperformed, but Endgame will be making a splash at the upcoming Toronto film fest with five films.
Real estate entrepreneur
Company: Yari Film Group is the umbrella company for several entities financed by Yari, including production shingles Bob Yari Prods., Bull’s Eye Entertainment, El Camino Pictures, Stratus Films and foreign sales company Syndicate Films.
Key partners: Neil Sacker for all companies; Cathy Schulman for Bull’s Eye; William Morris Independents for El Camino; Mark Gordon for Stratus; David Glasser for Syndicate
Evolution: Yari started in film and directed “Mind Game” in 1989, but left to make his fortune. He returned by forming a partnership with Gordon in 2002 and subsequently assembled his other companies.
Strategy: Fully finance a slate of 12-14 films a year, or do an 80-20 equity split with a major studio, spreading the risk and reward among the different entities. “The reason for the different banners is to have a diversity of management style, taste and function,” says Yari.
In the works: At BYP: “Jump Shot,” “Night Watchman” (fully financed). At Bull’s Eye: “Crash” (premieres at Toronto); “Thumbsucker.” At El Camino: “Haven” (premieres at Toronto); “L.A. Riot Spectacular” (co-financed with Cherry Road); “A Love Song for Bobby Long” (co-financed with Sony, premieres at Venice); “Sueno”; Untitled DreamWorks project, aka “Chumscrubber” (80-20 equity split with DreamWorks). At Stratus: “The Entity”; “Find Me Guilty; “Hostage” (Miramax releases); “Matador” (fully financed); “The Painted Veil” (fully financed); “Prime” (80-20 equity split with Focus Features); “Winter Passing” (an 80-20 equity split with Focus Features)
Completed: “Employee of the Month” (fully financed, preemed at Sundance, going straight to video); “House of D” (co-financed with Skoll; Lions Gate releases)
Verdict: Yari might seem like he’s spread a little thin and lacks a cohesive vision, but he’s capitalized enough to withstand a few misses (like “Employee of the Month”) and survive on a few singles until one of his many films hits it big. With “Crash” and “Haven” among the most-buzzed-about pics lined up for the Toronto film fest, this might be the time.
Former banker whose family owns the Minnesota Twins
Company: River Road Entertainment, equity fund with first-look deal at Focus/Universal
Key partner: Laura Bickford
Evolution: Pohlad quit banking in the late 1980s to start making movies. He started small, directing and producing his own work, then took his shingle public in Hollywood last year.
Strategy: Be patient and wait for the right projects to come along, with the right directors at the right time.
In the works: “Brokeback Mountain” (equity partner with Focus); “Che” (50% equity, rest on pre-sales before a domestic distrib signs on)
Completed: Pohlad made several documentaries and features in Minnesota, but none went into major release.
Verdict: It took a while before helmer Terence Malick boarded “Che,” but now it should be worth the wait; starting off with an Ang Lee pic isn’t a bad way to get rolling.
Federal Express owner
Company: Alcon Entertainment, indie production company with output deal at Warner Bros.
Key partners: Broderick Johnson, Andrew Kosgrove
Evolution: Johnson and Kosgrove came to Smith to pitch the investment and Smith signed on in 1997. Warner deal made in 2000.
Strategy: Work in the traditional studio contract mold, aiming for a steady stream of hits.
In the works: “Racing Stripes,” “The Sisterhood of the Traveling Pants,” “The Whole Pemberton Thing” (all with WB)
Verdict: With his output deal, Smith has a traditional and conservative approach to making movies, and a very hands-off management style. So far, “My Dog Skip” and “Insomnia” count as hits, but the rest have been less than stellar.