February 2 , 2005

It's the time of the season for hibernation… except for the really smart folks, who aren't sleeping, but preparing for the thaw.

The only real news that could have come out of the two day Disney conference in Orlando was Miramax news… and there is no sign of any. The smartest play there is the one in deepest hibernation. The story will not be told as to whether separation or reconciliation will be the smartest play for either side for a couple of years. You can be sure that if the Weinsteins leave - which we have all now accepted as a fait accompli but probably should not be so set on - the media will raise The Weinsteins up and piss all over Disney that day. But what the players who see the entire field understand is that the real game is being played somewhere completely different. How much will the Weinstein bonus be if they leave? How many tens of millions can they squeeze out of Disney if they stay? Who will be the announced successor to Eisner in June… and if it isn't Iger, will they be Miramax (as it is now) friendly?

An analogy to a football team might be kind of stupid here, but I'm going to make it anyway. I am a Miami Dolphins fan. The team had their worst year - by far - in 30 years this season. A new coach is coming in. Which coaches will stay? Which players will be cut? All that is on the surface. But the real key decisions are made on a more strategic level. How long does the new coach and owner believe that it will take them to get the team back into a competitive position? What style of team does this coach want to build? The answer to those two questions is the basis of all the other answers. Assets - in this case, football players - have a projectable value over time. What is obviously valuable next season may well be worth far less two seasons later… and the year after and the year after. Like football, movie companies have an expenditure cap. Giving up one major asset now may be a way to get three major assets in three years. The media doesn't like to look that far out. We have stories to write each day. But that is the reality of business as it is for football.

My beloved Dolphins had one of the greatest coaches in history, but he got stuck in a pattern of success without the big win… 20-some-odd years with only two losing seasons, but no Super Bowl wins after his first years… years in which he was building from someone else's mess. Maintaining an even strain is not only a great challenge, but it is a dangerous call for stagnation… as Lansing/Dolgen's Paramount found out.

But back to movies…

Harvey Weinstein is going through the stages of movie company death right now. Anger. Denial. Bargaining. Depression. Acceptance. According to some who spent time with him during the Golden Globes period, he was in the depression period… thus the beard growing. We can all remember the rage of Fahrenheit 9/11, the denial that he had less control of the situation than he is used to and the bargaining for a better deal with Disney for Bob to have Dimension and for Miramax to distribute Harvey's independently financed pictures.

I don't think there is anyone inside Miramax or Disney who will tell you that Harvey is as happy with, or enthused by, the Oscar runs of The Aviator and Finding Neverland as he has been in years past with other such achievements. As one insider said, "Those are Disney movies." But,even so, dancing on the grave of his child, Miramax, cannot be fun under any circumstance.

Looking at it from the other side, what is left for Disney to squeeze out of Miramax that hasn't already been smushed into a fine pulp? The studio can continue to enjoy the fruit of the Weinsteins' labor in the form of the library that was built up and is now owned by Disney. Theoretically, they can pick money off the Miramax tree by way of sequels and, in another five years or so, remakes. ("Anna Paquin as Mute Mom & Stilla Sperm recreating Ms. Paquin's Oscar-winning role in The Piano 2010")

What is Disney's position?

Well, you get a good read on how Disney operates from their behavior with Pixar. As things started getting uncomfortable, Disney talked repeatedly about the costs of staying with Pixar. But most writers and editors preferred the smell of putting Michael Eisner's feet to the fire than the truth of that business decision, whether they agreed with it or not. Disney went pretty silent when Pixar told reporters that the relationship was pretty much over. But they started talking up their first CG animation, Chicken Little. A few months later, as Eisner got stronger and Iger started to be taken more seriously, they started pushing back a little… maybe they didn't need Pixar that much. And now, they have gone from floating the threat of sequels to Pixar films to actually announcing a new division to make sequels to those Pixar films.

No matter how bad the Pixar/Disney "unauthorized" sequels are - and it is really unfair to assume that they will be inherently substandard - Disney stands to make, literally, billions of dollars off of them. Staying in business with Pixar means making, literally, hundreds of millions of dollars in the next five years. Forget about the giveback that Pixar was trying to extort from Disney before this all went publicly sour. Anyone offering you a reasonable read of the Pixar/Disney relationship, which would have to preclude "homemade" Disney sequels to Pixar films in order to go on, will tell you that Disney's bottom line in the next decade will get a whole fatter from exploiting the current contract than signing a new one.

The opposing argument is that the relationship limits competition and risk in a critical area for Disney, animation and assures a consistent cash flow from annual Pixar product. And that's fair, too. DreamWorks Animation will continue to compete and Fox hopes that its burgeoning animation slate will also become a cash center for the company.

One might also hope that down the road Pixar will embrace the opportunities to cash in on existing Pixar franchises it shares with Disney. Possible. So in 20 years, having stayed in business with Pixar might turn out to be a win for Disney. And the publicity win would be immediate. But in the next decade… bottom line… Disney wins by dumping Pixar unless Pixar shows more flexibility in the exploitation of its assets in collaboration (financial and aesthetic) with Disney. .

So how does this effect Miramax?

The business model for Miramax has changed pretty drastically since it has been set up at Disney. While any given year may not be all that profitable for parent Disney, it is a pretty good bet that home entertainment wins will keep the division profitable, even with some of the high-priced misadventures of recent Oscar-chasing years. That said, how small a return on investment is Disney willing to realize vs. the aggravation of having a Harvey-sized stone in its $25 billion-a-year shoe vs. the prestige of Oscar nominations?

As much as everyone seems to want to make this a mano-a-mano battle between Eisner and Weinstein, you can be sure that Disney and the Weinsteins have done that math. They both probably have different answers. But this is not just a personality conflict. There is a business decision to be made.

Perhaps the biggest dynamic that has been in play is, indeed, the personality issue, as regards Harvey. See, the thing is, Harvey is the greatest marketer in the modern history of movies. Period. And as a great marketer with the freedom to pick the films he wants to market, he has proven to be that much more of a genius. And I am not kidding… he is a stone cold genius… one of the few of his generation. And Bob isn't far behind. The asset that is these men is incalculable.

But only if they are willing to work in tandem with the goals of their financial supporter.

There is nobody in the world of real movie industry powers that would not kill to have the Weinsteins on their team… really on their team. And there is virtually nobody in that same world who wants a loose Harvey & Bob cannon on their deck. (There may be, ultimately, some very wealthy movie outsiders who back a future business. That would be very interesting to follow.)

It is all well and good to embrace the idea that no one really knows anything in the film game and that the anarchy of the Weinsteins is part of the genius and you can't have one without the other. But I call "bullshit" on that. Freedom is best with an infrastructure and rigidity is futile without some give. When the balance shifts too far to one side or the other, that is when you have revolution… or in this case, dissolution.

But getting back to the football analogy…

If a new coach and general manager comes to Disney, there is more freedom on both sides to make concessions, change positions, and think about these relationships on a macro, rather than micro, scale.

It is the same thing we are now seeing at Paramount under Freston and Brad Grey. The role of Paramount Classics is being reconsidered even as the role of the individuals at Paramount Classics is being reconsidered. I don't think that Ruth Vitale and David Dinerstein have been guaranteed that there won't be a change but, at the same time, they were integral parts of making a few very strong moves at Sundance this year. Do you have them do that and then dump them a short while later to make a bet on some other indie world talent? Probably not. But no one else has ever fostered a real relationship between Classics and MTV or Nick before. The mouths have been moving saying that, but they have never actually made it real. And now it is.

It is less likely to have a big change of style with Bob Iger at the helm of Disney than an outsider. And with all respect to Mr. Iger, one gets the feeling that he would be out the door at the first sign of a bad year at Disney in a Disney land without Eisner and that they would then go look to hire the strong outsider who could shake things up, just as Eisner did 20-plus years ago. Iger could overcome this by really making changes and not just being seen as Eisner's long-armed parrot. But that is always hard. To use another analogy, look at the Democratic party, willing to bury a slightly more radical voice like Howard Dean to run yet another boring northeastern tightass. Maybe Dean wasn't the guy. Maybe he would have lost too. But the excitement of real change is a powerful, powerful thing. Just ask the new DNC chairman.

There is a lot of hum out there that Harvey Weinstein will announce his separation from Disney and Miramax quite soon. And that may happen. But I am still in the mind of a genius bear, awake while other hibernate, strategizing for what's next. And when Harvey hits his "acceptance" phase, he is sure to be that. I would bet that the only way he'll announce before this summer - and summer would, in part, be a strategic advantage for him both by slowing Disney "new Miramax" play - is if he has his next step 100% in place and ready to go. If he was ready to drop $30 million at Sundance and have a possible Oscar winner in the group for his new company, it probably would have happened over Christmas. If there is a great play that he foresees at Cannes, it could happen then. But if not, expect him to bide his time, on Disney's dime, maximizing his and his brother's buyout, getting ready to pounce before the other bears get the sleep out of their eyes… waiting to see if he can make a summer deal with Chernin or whoever else might be there for him… waiting to see if Iger seals his fate…

The one thing we know about Harvey Weinstein… when he attacks, he attacks ferociously and until the other side is dead, not just wounded. So don't expect small swipes and a retreat. When it is time, it will be time. The media will be in the moment. And the real story will be written by the correspondents of the next generation.

READER OF THE DAY: KAN U DIG IT? writes: "While I read and enjoy your column regularly, I have to point out, regarding your comment that:

But again, my contention that what really sets Soderbergh apart, more than grosses, is the fact that he makes movies and doesn't spend years navel-gazing before delivering another film that he hopes will get folks like Ms. Waxman to call him a rebel who conquered the backlot.

The reason Soderbergh is so prolific is because he's the only one of the six (Fincher excepted, who I'll get to later) who doesn't generate his own original material. Everything he's done since Sex Lies (ultra low budget movies aside) has been someone else's script (The Limey), an adaptation (Out of Sight) or a remake (Ocean's 11 and 12). If Soderbergh had to sit down and come up with material on his own (and he does fancy himself somewhat a writer) I doubt if he would make films more often than every 2-3 years like the other filmmakers. And don't be mistaking quantity for quality unless you're a big fan of Kafka, The Underneath, Schizopolis, Full Frontal, his short-lived K Street series and the enjoyable but blatantly commercial Oceans films. Soderbergh hasn't really made a good film since his golden year of 2000 with Traffic and Erin Brockovich.

Still, he's probably my favorite of the six because he's eclectic and takes chances and is not as predictable (all a by-product of not creating your own material) as the other five directors.

Fincher I don't get. He's just a shooter with a taste for dark (literally) material. Does Fight Club feel so revolutionary now, only six years later?"

And this from DK DA MON & JEFF: " Although I do agree with most that Alien 3 does not live up to a good sequel to the two previous films, it is still a good film in my opinion. Then when Fincher did “Seven”, not only did it become one of my favorite films but he became one of my favorite directors. After Panic Room, I have been waiting to see what would be his next film only to hear rumors about something in the mix; from Rendezvous with Rama to Lords of Dogtown then to Benjamin Button. I think he has had a pretty successful film career so far; if not commercially then critically. Why would someone like Fincher or the other directors in Waxman’s book not have a larger output of movies in all of these years? Is it them being picky about the material they chose to tackle or the studio feeling that they are not commercial directors or could it just be every 3 to 4 years is the right cycle for them? I not sure of the answer, but it is very disappointing."

E-ME: Are you sleeping or are you planning? And does it really take three years for a director to get a script together... and you let Spike off the hook too... that's 3 of the 5 non-prolific rebels I mentioned yesterday...

 

Sundance Wrap-Up
Sundance Preview Part I
Sundance Preview Part 2

January 3, 2005 - Reflections On A New Year
December 31, 2004 - The Ten Best
December 30, 2004 - The Ten Worst
December 29, 2004 - Movies You Should Have Seen, But Didn't