Chapter 523: Universal Overhaul

In late August, Piranha 3D, released by Matrix Pictures, made $30 million in North America and $85 million globally.

In mid-September, Paranormal Activity opened in only 35 theaters, but after expanding to 380 theaters, accumulated $15 million in North America.

Capet continued to rake in box office returns because there were still ongoing releases this month, such as the sequel Saw 3D for Halloween.

Universal's own movie Couples Retreat opened in 3,000 North American theaters, earning $34 million on its opening weekend, which wasn't bad.

However, an American comedy with a $70 million budget was destined to have a limited overseas market, and its final North American earnings would barely surpass $100 million.

In the Universal office at Rockefeller Center in New York, Charles casually flipped through Universal's performance report, sighing to himself.

"I know Universal specializes in comedies and horror movies, but things are different now. The combined earnings of seven or eight of your movies aren't even close to the profit of one Capet big production," Charles shook his head.

"Adam, Universal can't be seen as only capable of low-to-mid-budget comedies and horror films. Plus, your so-called low-budget projects aren't even that low compared to Matrix Pictures; the difference is night and day!

A romantic comedy like Couples Retreat cost $70 million to make. How did you manage to spend that much?"

Adam Ferguson nodded, "We have stopped all unnecessary projects at Universal. For those in production or completed, we are reevaluating the distribution budgets!"

Although Adam Ferguson became the current head of Universal's marketing at Capet, Universal's top management - from Jeff Zucker to Ron Meyer - had all been replaced. It was quite startling.

Charles handed over a project list, "Stop these un-started projects directly. For those started, try to withdraw the investment, let Universal only distribute. Try selling the distribution rights to other film companies if we can't pull out investments to recover our losses."

Adam Ferguson looked at the list and saw that most were about to start development. He was shocked and started to think.

"Morgan Creek Productions' The Thing prequel is based on an early Universal film, The Thing. Universal is supposed to support it. Dream House is a script from Morgan Creek that received approval from Universal's production department. It's also set to get support. Both of these movies haven't started filming yet; we can terminate these projects," Adam Ferguson explained.

"Go on," Charles nodded.

"The Change-Up is mainly a comedy film produced by Relativity Media. Universal can just handle distribution.

Larry Crowne is also a comedy directed by Tom Hanks, starring Hanks and Julia Roberts. Summit Entertainment wanted the distribution rights before; Universal could sell it to them!"

Adam Ferguson saw Charles nod again and continued, "Tower Heist, another comedy with a $75 million budget, even though pre-production is complete, hasn't started filming. We can withdraw and just lose the development costs.

The Adjustment Bureau, starring Matt Damon and Emily Blunt, has already started filming. Selling the distribution rights might lead to losses, given Universal's significant investment."

"Matt Damon, huh. And that already completed war film Green Zone, directed by Paul Greengrass, starring Matt Damon - did you think it could replicate the success of The Bourne franchise?" Charles was speechless. Have any war films been commercially successful in recent years?

Green Zone's production cost was $100 million!

"Directly sell the distribution rights for The Adjustment Bureau. Let's see if we can recoup the investment. Matt Damon is a big star now, should attract some film distributors.

Source Code looks good; the script is well written. A $32 million budget movie, and yet you plan to give the distribution to Summit Entertainment," Charles felt distressed. Universal always chased the wrong projects.

"It's just that Source Code doesn't have big stars. Jake Gyllenhaal is considered an indie film star, of course, he can't be compared to Larry Crowne's leads, Tom Hanks and Julia Roberts."

Universal's project selection, blindly worshiping big stars, was the reason Charles wanted a major shake-up!

"And Universal Animation's 3D animation Hop coming out in 2011, while Capet Illumination's first 3D animated film Despicable Me is also released next year. The kids and family market will be our key focus in the future. Universal Animation will thrive further with Capet Illumination joining forces. Lastly, there's the action-adventure film Sanctum with James Cameron as a producer. It's a worthwhile investment, with a $38 million budget that could make a significant impact!"

Charles had no choice but to cut losses in situations where costs couldn't be recovered, "Green Zone and Robin Hood, both releasing next year, should have their distribution budgets reduced. In the future, projects involving big stars like Russell Crowe, Johnny Depp, and Keanu Reeves, especially commercial films, should be handled with caution!"

"Got it, I will follow up," Adam Ferguson had to cooperate with Charles.

"Also, Focus Features should reduce its film projects to around three per year," Charles added.

"If James Schamus, the head of Focus Features, wants to resign, just approve it!"

Focus Features was initially Universal's subsidiary specialized in distributing art films. Now, Charles didn't want to waste resources on indie films.

If James Schamus, the president of Focus Features, wanted to resign like Daniel Battsek of Miramax, Charles surely wouldn't stop him.

After leaving Charles' office, Adam Ferguson let out a big sigh. He had just canceled projects in early stages of preparation.

Now, more fully prepped projects were cut, and the number of low-to-mid-budget projects was reduced. Clearly, resources would no longer be heavily spent on comedy and horror films!

Charles wouldn't shut down Focus Features; it would still be under Universal as a distributor for art and foreign films in North America.

However, there would be layoffs, steering towards Matrix Pictures' B-movie distribution model and pursuing quality over quantity.

*****

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