Inside Hollywood: The Studio Report Card

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It’s become a tradition at this time of year, first in my column, and now in my blog, to grade the major movie studios on their performance over the course of the year. The Studio Report Card started as a way to get a handle on how the business works, but it also serves as a corrective to all those business stories that essentially trumpet how much market share the giant studio conglomerates have, without really wrestling with something that matters to us film fanatics--while they were raking in all that cash, did the studios actually make any good movies? That’s why I give two grades, one for commerce, one for quality. And trust me, in the quality department, studios rarely get an A. When it comes to winning awards, they’re happy to hand that off to their specialty divisions, at least the few that still survive.

This year saw even more sweeping consolidation in the movie business. With DreamWorks waiting for a new financing deal, with MGM more of a business strategy than a studio (and in something of suspended animation itself, with barely any MGM-funded projects in actual production) and with New Line having been absorbed by Warners, there are now essentially six major studios and one independent, Lionsgate, that dominate the landscape. Trying to figure out their finances is sort of like dissecting one of Congress’ bailout bills, since every studio now has a slate deal that provides financing for a chunk of nearly every movie, while a host of other films are co-financed by outside producers or equity partners.

It’s enough to make your eyes glaze over. At least when it comes to quality, it’s a lot easier to know what movie was loved or loathed. So here’s the first in a series of studio report cards, starting with Warner Bros., the studio that made ‘The Dark Knight,’ the biggest hit of 2008. (My box-office results, courtesy of Media By Numbers, include grosses through the weekend of Jan. 4.)

Warners: It was the best of times and worst of times for the studio that made its numbers so easily in 2008 that it happily pushed back the release of its latest ‘Harry Potter’ cash machine from fall ’08 to this July. The biggest payday was obviously ‘The Dark Knight,’ which not only showed off Warners’ marketing and production prowess, grossing nearly $1 billion around the globe, but did well enough with critics to earn one of the highest Rotten Tomatoes review scores of any mainstream release. With Chris Nolan at the helm, ‘Knight’ is perhaps the purest distillation of Warners Pictures group chief Jeff Robinov’s strategy of enhancing the studio’s franchises by putting them into the hands of first-class filmmakers. Of course, the same strategy backfired with ‘Speed Racer,’ a potential kids franchise (co-financed with Village Road Show) that was put in the hands of the once-reliable Wachowski brothers and producer Joel Silver, only to bellyflop at the box-office. It made only $43.9 million in the U.S., and only a bit more overseas.

It was also the worst of times, since it was Warners that acquired (through its now-defunct WIP specialty division) the U.S. rights to ‘Slumdog Millionaire.’ But after seeing the movie, the studio decided it had no interest in releasing it. (If Fox Searchlight hadn’t jumped at the chance to handle the movie here, Warners was considering taking ‘Slumdog’ straight to video.) It’s one thing not to see a hit when its in the script stage, but it’s another thing to actually see a great movie and still take a pass. It’s a depressing commentary on the current state of today’s studio culture that either Warners is run by people who don’t know a great movie when they see it or they decided the studio didn’t know how to market the year’s best movie. Publicly, Warners says its end-of-the-year slate was too crowded to make room for ‘Slumdog Millionaire.’ In other words, when push came to shove, Warners was far more eager to release nice, innocuous comedies like ‘Four Christmases’ and ‘Yes Man’ than a cinematic tour de force that is now the leading contender to win a best picture Oscar.

‘We had a couple of issues--we did have a really crowded slate at the end of the year and we just didn’t have the infrastructure to release ‘Slumdog,’ ‘ studio chief Alan Horn explained. ‘But I don’t have any regrets. I’m thrilled for Danny Boyle as well as Peter Rice and the Fox Searchlight people. They’ve done a great job on the picture, which we still have half of. So I think it’s worked out well for everyone.’

That said, Warners did keep Clint Eastwood in its fold, releasing his critically and commercially potent ‘Gran Torino’ at year’s end. Warners also successfully absorbed New Line, providing marketing muscle for a host of its releases, which turned out to be a big plus. In fact, with ‘Sex and the City,’ ‘Four Christmases’ and ‘Journey to the Center of the Earth,’ New Line delivered three of Warners’ Top 6 grossing films in 2008. Warners also had solid hits with ‘Get Smart’ and ‘Yes Man,’ which more than made up for the failure of ‘Body of Lies,’ which fizzled despite the star presence of Russell Crowe and Leonardo DiCaprio. The studio has other issues--its star producer, Joel Silver, has now presided over a series of flops, making wonderers wonder why Horn has remained so loyal to someone so over the hill. But Warners is generally a well-run, strategically savvy studio that hires a lot of classy filmmaking talent, even if with the shuttering of Picturehouse and WIP, they’ve essentially abandoned the specialty film business.

‘I think its fair to argue that if you’re an independent filmmaker that you might not want to take a picture to Warners,’ Horn acknowledges. ‘But we do believe in making good, compelling movies. We had a very solid, profitable year overall. I think our production and marketing departments are excellent. We did have our disappointments, which only reminded me of a simple priority--screenplay, screenplay. It all starts with that. After that, anything can happen, or as William Goldman so eloquently put it--no one knows anything.’

Performance: A minus. Quality: B minus. Overall: B plus.

Coming next: Sony.

‘The Dark Knight’ photo by Stephen Vaughan / Warner Bros. Pictures