Chapter 117: Distribution Contract

The sky had already turned dark, and the temperature had dropped. In the small courtyard in front of Stanton Studio, a table was set in the center. Murphy, James Franco, Seth Rogen, and Jonah Hill were sitting around it, talking loudly. As Carey Mulligan came over with a fruit plate, their voices quickly lowered.

Since that night, they had gradually formed a small group.

"If I ever become a star," Jonah Hill, angry about the news from Bill Rossi, declared, "I will never work with a trash company like Lionsgate!"

An empty beer glass slammed heavily on the table with a bang. Seth Rogen, looking simple and honest, had a red, flushed face. "Count me in!"

Having just entered this circle, they were full of enthusiasm.

Carey Mulligan stood up, picked up her glass, took a big gulp, and wiped her mouth with the back of her hand, saying boldly, "Me too!"

She wished she could kick all the higher-ups at Lionsgate right in their sensitive areas!

Hearing this, James Franco grabbed a grape and tossed it into his mouth. Just as he was about to say something, he noticed Seth Rogen, Jonah Hill, and Carey Mulligan all staring at him.

Avoiding Carey Mulligan's eyes, he nodded to the other two, raised his glass, and said loudly, "How could I not be included in this?"

"Thank you!" Murphy raised his glass and gestured to each of them. "Thank you all for your support."

He downed the remaining drink in his glass, and the other four followed suit.

Having experienced prison life, Murphy's heart was hard enough, but he was still moved by these words. This feeling of having support and fighting alongside friends was much better than struggling alone.

Even if their verbal support didn't translate into tangible help.

On the other side of the Pacific, he was a lonely man. After arriving here, he ended up in a dark, sunless prison. Now, he had a girlfriend and a few like-minded friends. Life was undoubtedly moving in a better direction.

Even though there were still countless obstacles ahead, like Lionsgate and Miramax, Murphy believed he could continue on and reach the pinnacle of his directing career.

As he gulped down his drink, Carey Mulligan's small face twisted, reminding Murphy, "Bill said Lionsgate might be different from Miramax. They are very interested in making a similar film."

She glanced at Murphy and then at Seth Rogen, Jonah Hill, and James Franco. "What should we do?"

It was impossible not to worry. Having made two films, she had gained a deeper understanding of the industry. If "Saw" didn't find a suitable distributor and Lionsgate's film hit the theaters first, Murphy would be significantly impacted. He might not even recoup his investment.

Carey Mulligan looked back at the dark house hidden behind the lights. If "Saw" failed, they probably couldn't afford to rent this house anymore, and she and Murphy might end up homeless in the park...

Although it seemed romantic in a girl's mind, thinking about the financial and emotional blow Murphy might suffer made her heart ache.

Yes, what should they do?

Seth Rogen, Jonah Hill, and James Franco looked at Murphy. Some things were easy to shout about but didn't help solve the problem.

They knew that ultimately, how to resolve this rested on Murphy.

"Large companies squeezing smaller ones in the upstream of the industry chain is common in any country and any industry," Murphy leaned back in his chair, supporting his chin with his left hand, his tone gradually relaxing. "Actually, this isn't hard to solve. We just need to get our film into theaters first."

He coughed, and Carey Mulligan quickly handed him a glass of water. After taking a sip, Murphy continued, "Let's assume Lionsgate is determined to make a similar film. It would take at least twenty days from preparation to completion. If we can get our film into theaters during that time, even if they release theirs immediately afterward, they will be seen as the imitators."

James Franco understood Murphy's point and nodded. "Imitators, whether in terms of reputation or box office, are always inferior to the original."

"Bingo!" Murphy snapped his fingers. "If we can release our film before Lionsgate, the impact on us will be minimal. As for Lionsgate, if they do make a similar film, our release will double their risk."

For a company like Lionsgate, which specializes in horror films, doubling the risk might not be significant, which was likely why they were confident in discussing the project.

This was Murphy's thought process. Since Lionsgate's executives had discussed it, the project might become a reality.

As he said, to avoid being affected by Lionsgate, the best solution was to quickly push "Saw" into theaters.

Of course, Murphy and Bill Rossi weren't entirely sure if Lionsgate would follow through, but it was best to be prepared.

The current situation didn't allow him to wait much longer. Murphy sped up the negotiation process, leaving a counteroffer of $15 million plus two film contracts for Miramax, which led to a stalemate.

However, for a backup plan, he kept Bill Rossi in touch with Miramax.

DreamWorks, Morris Entertainment, and several other companies dropped out due to significant differences, or Murphy excluded them.

The only one with some progress was Fox Searchlight.

Maybe due to their business strategy or the impact of poor first-quarter results, they paid a lot of attention to the film they estimated could gross ten million dollars in the North American market.

As the owner of Stanton Studio and the film's copyright holder, Murphy had five rounds of negotiations with Fox Searchlight's Godin Clyde. Like the initial talks, Clyde was relatively gentle in demeanor, always wearing a pleasant smile, but he was relentless when it came to interests.

Such negotiations were bound to be tough. When progress seemed impossible, Murphy even considered accepting Miramax's offer.

However, thinking of Harvey Weinstein's face and Miramax's practices, he kept them as a backup. Even if Miramax released news about their horror film being greenlit...

Murphy and Fox Searchlight's biggest disagreement was on the distribution fees. During negotiations with Godin Clyde, Murphy fought hard, trying to lower it from 30% to 25%, and aimed to include all promotional costs in this percentage.

If they calculated the distribution fees separately and deducted promotional costs from the box office, he might as well sign a buyout contract with Miramax.

Venue fees, transportation costs, labor fees, insurance fees—these seemingly insignificant but substantial expenses were points of contention.

As June drew to a close, after several rounds of tough negotiations and with news that Lionsgate's project was progressing, Murphy finally reached an agreement with Fox Searchlight.

In the fiercely contested North American distribution commission, Murphy nearly wore himself out, reducing it from 30% to 25%. This meant that if "Saw" grossed $10 million in North America, Fox Searchlight would take $2.5 million.

This condition seemed harsh but was actually quite reasonable. Murphy's greatest success was including all of Fox Searchlight's promotional and distribution channel costs in the 25%, as well as storage fees, transportation fees, labor fees, PR fees, and insurance costs.

Stanton Studio's burden wasn't heavy, with the largest expense being the production of film copies. Murphy had less than $100,000 and couldn't afford this. According to a supplementary agreement, Fox Searchlight would advance the cost and deduct it from the box office revenue.

The cost of making copies might seem unnoticed but was actually very high.

For a film like "Saw," compressed to around ninety minutes, each copy was expensive.

A roll of film for about 4.5 minutes of screening cost roughly $150. For ninety minutes, it would cost at least $3,000. A hundred copies would be $300,000...

Even with bulk printing reducing costs, no distribution company would casually shoulder this expense.

"Saw," being a guild-registered project, also required fees to several guild organizations, which Stanton Studio had to bear independently.

Then there was the issue of copyright. Fox Searchlight's demand for half the copyright was out of the question. Both sides made concessions, with Stanton Studio retaining 70% of the copyright and Fox Searchlight getting the remaining 30%. This meant that besides the box office revenue, other ancillary rights income would be split according to this ratio.

Murphy preferred to make concessions in distribution rather than give up the entire film's copyright, but Fox Searchlight wasn't foolish. It was common for Hollywood distribution companies to take a share of the copyright in collaborations with small production companies.

This was the best deal Murphy had negotiated with any distribution company.

With all terms agreed upon, under the guild's notarization, Murphy, representing Stanton Studio, officially signed a distribution contract with Fox Searchlight. They had already conducted market estimates and planned to push "Saw" into theaters quickly.

For a commercial company, time cost is also a cost.

The summer blockbuster season in North America hadn't ended yet. However, by early July, the peak opening periods of the major productions would be over. Second-tier and small productions would then enter theaters to share the leftovers of the summer market.

Fox Searchlight planned to release "Saw" in mid-July, offering a two-week promotion period. For such a small production, this was very generous.

They provided a promotional plan and budget, which they also sent to Murphy. The authenticity was questionable.

The plan likely had some padding, but with such a small investment scale, it was limited. Seeing the budget numbers, Murphy wanted to shout that Fox Searchlight should just save themselves the trouble!

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