2001 Amidst Turmoil, Studios Enjoy A Record Year

• Warner Bros.
• Universal
• Paramount
• Disney
• Fox
• Sony
• Mgm
• Dreamworks
• Miramax
• New Line

A few records were set and profits turned in 2001, but studio hands certainly suffered for their art. Labor ills, spiraling costs and the onset of recession caused innumerable headaches even as the box office surpassed $8 billion for the first time.

Critics and execs carped all year that the overall slate lacked quality, and especially in the sequel-ridden, quick-fade summer, concept often triumphed over substance. The quick retreats of major pictures, with second-week drops exceeding 50%, only added to the woes of movie theater chains already coping with financial hardships.

Even more worrisome to the still-consolidating media giants, several carefully engineered blockbusters failed to deliver, leaving plenty of room for resolutions in 2002.

The following is a report card on each of the major Hollywood studios.

WARNER BROS.

Warner Bros. fired on all cylinders in 2001, earning more than $1 billion at the domestic box office, opening eight films at No. 1 and holding that slot for a total of 11 weeks -- all numbers that bested its competitors.

The biggest contributor to those figures was "Harry Potter and the Sorcerer's Stone," which looks to pass $300 million and promises more to come in 2002 with "Harry Potter and the Chamber of Secrets."

Even without the young wizard, Warners would still have emerged on top thanks to the performances of films like "Ocean's Eleven," "Training Day" and "Cats and Dogs."

The impressive stats also point to the studio's policy of running as many films through its distribution system as it can possibly hold.

"We actually did a fair amount of homework and asked, 'What does capacity represent to you guys?"' said Warner Bros. president/chief operating officer Alan Horn. "Under 25 was underutilizing the system, while over 30 you choke on your own movies."

Of the 26 films that Warners released in 2001, more than a half-dozen carried no financial risk for the studio. These included such misfires as "American Outlaws" from Morgan Creek, Alcon Entertainment's "Affair of the Necklace" and Franchise Pictures' "3,000 Miles to Graceland."

The box office performance of these was irrelevant to Warners' bottom line, since the studio took a flat distribution fee in return for their release.

"The problem is when one of these movies doesn't perform well, we become the target of the criticism because our logo is on them," said Warners production president Lorenzo Di Bonaventura. "We have nothing to do with those movies."

Warners had clunkers of its own to face during the year, including "Sweet November," "Osmosis Jones," "Rock Star" and "Hearts in Atlantis." While the book is not closed yet on Oscar hopeful "The Majestic," early grosses and reviews have not been stellar.

Entering 2002, however, those painful memories were fairly scarce as Warners closed the year by winning domestic distribution on "Terminator 3: The Return of the Machines" -- another tentpole for 2003.

Looking ahead, Warners will soon be reporting to a new master of the universe in Richard Parsons, who will take over as CEO of parent company AOL Time Warner with Gerald Levin's retirement next May. Perhaps even more significant, however, is that Warners brass will now report to him through chief operating officer Robert Pittman.

"He's very comfortable with us and his new job," Horn said. "It's not as if they've brought someone from the moon. Bob has the reputation of being very hands-on and we welcome it as he defines it."

In addition to the second "Harry Potter," 2002 includes "Showtime," "Divine Secrets of the Ya Ya Sisterhood," "Death to Smoochy," "Analyze That" and "Collateral Damage," the film famously delayed after the Sept. 11 attacks. However, never releasing the terrorism-themed film was not an option, Horn said. "We have too much money in it."

UNIVERSAL

With a clear grasp of the zeitgeist and a largely unbroken streak of worldwide hits, Universal Pictures was a point of stability as a sea of changes loomed at Universal Studios in the wake of the merger of Vivendi Universal and USA Networks at the end of 2001.

Six consecutive Universal releases, from May to October, opened No. 1 at the box office last year, and the studio crossed the $1 billion mark overseas Nov. 19, earlier than any of the other majors.

Though the reporting structure at Universal Studios shifted with the arrival of USA Networks honcho Barry Diller in December, Universal Pictures has spent 2001 consolidating its staff structure and production alliances.

Under Universal Pictures chairman Stacey Snider, Mary Parent and Scott Stuber became co-presidents of production, while Universal Pictures vice chairman Marc Shmuger integrated the domestic and international distribution and marketing arms.

"The right people are in the right jobs," said Snider. "A great accomplishment this year has been seeing this team really gel."

Universal also extended production deals with main suppliers like Imagine, Jersey and Working Title, and signed "Mummy" director Steve Sommers to a multiyear deal. And it renewed its distribution deal with DreamWorks for another five years.

Many of Universal's hits last year came from studio franchises -- a trend, Snider said, that stems in part from efforts to maximize the value of its own assets.

"We didn't have to go out there and buy a character or a property," she said.

"American Pie 2," one of three sequels Universal released in 2001 that outgrossed their predecessors, "was an example of taking a tiny movie and sequelizing it," she said.

PARAMOUNT

The ultra-stable studio recorded yet another down-the-middle year, with solid box office returns generating profitability thanks to minimal financial risk.

"Consistent management and consistent high levels of performance economically is a big draw to filmmakers," said Paramount vice chairman Robert Friedman. "It gives you a lot of advantages with the creative community as they know from one day to the next who they are going to be talking to, where their projects should be submitted, who will develop them and that they will finish their life at the studio."

But Paramount's year-end saw one of its riskiest creative pictures ever in "Vanilla Sky," the Tom Cruise/Cameron Crowe vehicle that despite a $25 million opening weekend, proved a disappointment both critically and financially (though the picture was reportedly budgeted in the $60 million range); it ended 2001 with a $71 million gross.

In more traditional fashion, teen romancer "Save the Last Dance" proved a classic Paramount success story in early 2001, exceeding expectations both creatively and commercially by grossing $91.1 million domestically. It also was somewhat of a showcase for the studio's synergistic muscle -- the harnessing of Paramount-based MTV Films to capitalize on the music cable network's youth audience, utilizing its enviable marketing reach and supplying a hip soundtrack.

The studio's summer tentpole "Lara Croft: Tomb Raider" delivered rock solid receipts, grabbing $131.2 domestically, the studio's highest grosser of the year.

Paramount's stable of modestly budgeted thrillers also provided a strong revenue stream. The suspense film "Along Came a Spider" delivered a highly profitable $74.1 million domestically while "The Score" grossed over $71.1 million domestically in return for Paramount's small financial investment.

"Pootie Tang," however, proved a dud and the studio also suffered from a Sept. 14 release date on the Keanu Reeves starrer "Hardball."

The comedy "Zoolander" was a modest success for creator Ben Stiller, Paramount's first feature venture with VH1.

Paramount's latest collaboration with Nickelodeon, the kiddie pic "Jimmy Neutron: Boy Genius," scored solidly with Christmas audiences.

In 2002, Paramount is pinning its hopes on the next installment in its Star Trek franchise, "Star Trek: Nemesis," its Mel Gibson topliner "We Were Soldiers," the Ben Affleck starrer "The Sum of All Fears" and its Michael Crichton picture "Timeline."

DISNEY

For the first time since 1997, Disney did not win the domestic box office race. But the Mouse House can take solace in the fact that its pictures were more profitable than those of 2000.

That spike is due to such box office hits as producer Jerry Bruckheimer and director Michael Bay's "Pearl Harbor," which despite a domestic tally just shy of $200 million, performed well overseas and is on track to be one of the highest-grossing DVD releases to date.

Disney also struck box office gold with the summer picture "The Princess Diaries" and regained its strength in November with what could only be described as a monster hit -- Pixar's "Monsters, Inc.," which grossed $219 million domestically, giving the Mouse House its biggest hit of the year.

But the studio's summer hit some roadblocks: "Bubble Boy," "Atlantis: The Lost Empire" and "Max Keeble's Big Move" all underperformed.

Meanwhile, parent Walt Disney Co. struggled with a nationwide economic downturn: theme park revenues declined, Disney stores faltered and ABC finished fourth in the November sweeps.

After assuming the studio's chairmanship when Joe Roth left two years ago, Peter Schneider abruptly exited the studio in June, leaving Walt Disney Pictures chairman Richard Cook and Buena Vista Motion Pictures Group president Nina Jacobson in charge, with no direct replacement for Schneider.

On the live-action feature side, producer Bruckheimer continues to be the studio's main supplier.

To bolster its stream of suppliers, former Fox studio boss Bill Mechanic was recently signed to an overall five-year deal with the Mouse House. The studio also brought Dustin Hoffman's Punch Prods., "Princess Diaries" producer Debra Martin Chase and "Corky Romano" producer Robert Simonds into the fold.

"It's been a bouncing-back year in some ways and a foundation-building year for bigger and better things," Jacobson said. "I feel good about the group and the way things are working right now."

FOX

While 2001 marked a period of relative executive stability and healthy earnings for Fox, box office success eluded the studio's early releases.

After comedies "Monkeybone" and "Say It Isn't So" failed to ignite audiences, Fox finally got hot in May when its dizzying yet dazzling musical "Moulin Rouge" opened the Cannes Film Festival to critical plaudits and solid returns.

Under tag-team toppers Tom Rothman and Jim Gianopulos, summer once again bore the most box office fruit with hits "Dr. Dolittle 2" and "Planet of the Apes." While the rest of Fox's 2001 releases posted more modest numbers, the studio also had its share of bombs such as Mariah Carey starrer "Glitter," which minted a meager $4.3 million.

"Despite the occasional disappointment, we achieved consistent success across a wide range of films this year," Gianopulos said. "One of our core strategies at Fox has been to strike a balance between creativity and profitability in the overall slate."

Fox significantly boosted its production pacts in 2001 by inking deals with Mark Gordon, Michael Kuhn and Jay Roach as well as Ridley and Tony Scott.

This year also saw Peter Rice's Fox Searchlight come into its own as both an artistically and commercially viable division with pictures such as "Kingdom Come," "The Deep End" and "Sexy Beast."

After a late fall hit with Farrelly brothers comedy "Shallow Hal," Fox received the first honors of the award season when the National Board of Review chose "Moulin Rouge" as best picture for 2001, fueling the picture's aspiration for Oscar gold.

Summer 2002 also looks bright for Fox, whose slate already includes Steven Spielberg's "Minority Report" and George Lucas' "Star Wars: Episode II -- Attack of the Clones."

SONY

It was a fairly dismal year at Columbia Pictures, but not a total wash for Sony Pictures Entertainment.

How's that again?

Sony now derives almost as many pictures from Revolution Studios and specialty arm Screen Gems as it does from Columbia Pictures. Columbia released just a dozen pictures, while Revolution unspooled six and Screen Gems had five -- probably a good thing, given Columbia's recent box office drubbing.

But while Columbia's 2001 slate has been blockbuster-free, it did offer a few bright spots: Both the negative pickup of Intermedia's "The Wedding Planner" and "A Knight's Tale" were pictures with sizable profits, taking in $60 and $57 million, respectively, in domestic box office.

Nagging questions of who'll succeed Sony Pictures chairman John Calley, 71, were postponed for another year. Calley renewed for 18 months last fall, giving Sony Corp. of America chair Howard Stringer time to dream up new ways of enticing Joe Roth to forsake his own Revolution and take the top job.

Columbia chairman Amy Pascal was quick to point out that while 2001 "wasn't the year I hoped and dreamed of," it did show some positive signs.

The 2002 Columbia slate was put together, she said, "with a mandate for franchisable movies that belong to the company," and indeed, Pascal has delivered.

These include franchise actioners like "Men in Black 2" and "Spider-Man." Even Columbia's 2002 "chick" pics are poised to rip -- Michael Apted's Jennifer Lopez starrer "Enough" provides a surfeit of ass-whupping on abusive males, and a Memorial Day weekend launch could boost it at the box office.

Equity partner Revolution, despite a turkey in "Tomcats," delivered mostly profitable movies like "America's Sweethearts," "The One" and "The Animal."

The news was rosy, too, at Screen Gems, which, with only five films delivered $96 million in grosses.

"We've finally figured out what we should be, and it's working," said Val Van Gelder, Screen Gems' executive VP of marketing, adding, "keep the overhead low and strategically target your audience."

That they did. An underserved black middle class responded heartily to Screen Gems' "The Brothers" and "Two Can Play That Game"; also notable was "Snatch," making Screen Gems a plus on the corporate balance sheet.

MGM

A handful of hits in 2001, including "Hannibal" and "Legally Blonde," produced MGM's highest annual domestic box office on record. But the Lion, which has been rebuilding by fits and starts since the Frank Mancuso era ended in 1999, is still in transition.

Under CEO Alex Yemenidjian and vice chairman Chris McGurk, the studio released just 12 pictures in 2001, which left it especially vulnerable to disappointments, like "Bandits" and "What's the Worst That Could Happen."

But a series of senior management moves -- hiring Sony marketing president Bob Levin to run worldwide distribution and marketing, installing Bingham Ray as head of the United Artists arthouse banner and reupping MGM Pictures president Michael Nathanson -- set the stage for a 2002 slate that McGurk said is likely to include up to 13 UA pictures and eight from MGM.

"We have the senior management team in place across the entire organization and are moving forward with our strategic agenda," McGurk said.

That includes a revitalized UA with a wide range of first-look deals. The low-budget UA horror pic, "Jeepers Creepers" provided a model for the sort of modest success that MGM hopes will continue to be the bread and butter supporting its occasional tentpoles.

"Everybody talks about our reliance on James Bond," said McGurk. "The good news about 2002 is we have everything that was working in 2001, but we also have a Bond film."

DREAMWORKS

After the studio won best picture Oscars two years in a row, it was easy to believe DreamWorks could do no wrong.

Then came 2001. Outside of monster hit "Shrek" -- a favorite to win the new animated feature Oscar -- the slate largely failed to meet expectations. Aside from middling box office from the Julia Roberts/Brad Pitt starrer "The Mexican," which took in a little over $66 million domestically, pictures like F/X-heavy sci-fi comedy/suspenser "Evolution," prison drama "The Last Castle" and Woody Allen's "The Curse of the Jade Scorpion" all underperformed.

DreamWorks production co-head Walter Parkes pointed out that if 2001 seems slender by comparison to the last two years, it's because much tentpole fare was pushed to 2002. "The Time Machine" and "Road to Perdition" will premiere in March and July, respectively.

The studio this year also hired a new face but an old hand in Michael De Luca, the former New Line production chief who will oversee the bulk of day-to-day production, freeing up frequent Steven Spielberg collaborators Parkes and Laurie MacDonald to produce more pictures on their own.

One such project will be the 2002 holiday suspenser "Catch Me If You Can," which stars Leonardo DiCaprio and Tom Hanks in an FBI cat-and-mouse game. De Luca also will be called upon to put together three or four pics that "reflect his sensibilities," Parkes said.

For the coming year, DreamWorks shares "Perdition" and the Tom Cruise starrer "Minority Report," helmed by co-founder/principal Spielberg, with Fox. It's also releasing broad comedy "The Tuxedo" with Jackie Chan.

It remains to be seen what sort of movies De Luca will choose to reflect his sensibilities, which during his New Line stint ranged from thrillers like "Seven" to comedies like "Austin Powers" to high-brow pictures like "Magnolia."

MIRAMAX

For the second year in a row, Miramax is behaving more like a studio, less like an Oscar-monger.

With 26 releases and a company record of nearly $1 billion domestic gross spread across Miramax and Dimension, the one-time specialty label continued to excel commercially.

But Miramax does still covet Oscars. Watching Sony Pictures Classics' Ang Lee-helmed "Crouching Tiger, Hidden Dragon" walk off with the foreign-language Oscar last year was no thrill for Miramax. Shortly thereafter, the studio nabbed a batch of Asian-language pictures for U.S. distribution, or to re-make, and aligned itself with Gotham specialty shingle Good Machine, the company behind "Tiger."

Miramax also has returned to its roots, actively acquiring hot indie and Euro films. It swooped in at the Sundance Film Festival to nab the buzz pic, Todd Field's "In the Bedroom," starring Sissy Spacek and Tom Wilkinson, which is generating Oscar heat; it released French click "Amelie," a likely candidate for the foreign-language Oscar; and it acquired foreign arthouse gems "Behind the Sun" and "Baran."

On the Dimension side, the surprise critical and commercial winner was "The Others," starring Nicole Kidman and directed by Spanish filmmaker Alejandro Amenabar. The picture opened quietly in early August and has steadily grown at the box office, in the process becoming Spain's highest-grossing picture ever.

"We have achieved the balance that we have been looking for," said Mark Gill, Miramax's L.A. president. "Films like 'The Closet,' 'With a Friend Like Harry,' 'Apocalypse Now Redux' and 'In the Bedroom' have done insanely well."

Despite such successes, Miramax continues to pump its marketing dollars into more mainstream fare like "Bridget Jones," "Serendipity," "Kate & Leopold" and "The Shipping News." Such pictures represent greater risks for the studio. But that risk is one Miramax now can afford to take.

Still, the industry will be watching closely as Miramax releases its most ambitious and expensive effort to date -- Martin Scorsese's "Gangs of New York," expected to premiere at May's Cannes Intl. Film Festival and hit theaters in the fall.

With far fewer releases than Miramax, Dimension continues as a cash cow for the studio, succeeding in an array of genres. The youth-oriented "Spy Kids" clicked with $113 million, while slasher teen picture "Scary Movie 2" scored $71 million. With "The Others," Dimension grabbed three of the company's five highest-grossing pics of the year, the other two being Miramax's "Bridget Jones's Diary" ($71.5 million) and holdover "Chocolat" ($71.5 million in 2001).

Though Dimension acquired the Robert Harmon picture "They," the company avoids acquisitions and foreign films, still Miramax's domain.

NEW LINE

What a difference a day makes. On Dec. 19, all of New Line's transgressions stood to be forgiven with the release of "The Lord of the Rings: The Fellowship of the Ring."

With the release of "Ring," which had earned $155 million by the end of the year, New Line is in the unique position of having the best year in its history -- even though the studio seemed to spend much of 2001 in a defensive posture.

The year began with the layoff of some 100 staffers, continued with the exit of production president Michael De Luca and marketing president Joe Nimziki (replaced by Toby Emmerich and Russell Schwartz, respectively) and was followed by the disastrous release of "Town & Country." Topping it all off was a string of underperforming movies and rumors that the studio could be shrunk to a mere label and placed under Warner Bros. Pictures.

"It was a year in transition," said Bob Shaye, New Line co-chairman/co-CEO. "There was a change in production philosophy. We want to make films as if we're using our own money and look for complementary films to the mainstream productions that our sister company Warner Bros. is doing."

With the flop of would-be franchises like the Snoop Dogg starrer "Bones," it would seem New Line is still tinkering with that formula.

"We took some hits and had some disappointments," said Emmerich. "I think 'Bones' fell a little bit too short of the mark."

At the same time, New Line released the highly successful sequel "Rush Hour 2," the fourth most successful film of 2001.

New Line is planning a 2002 slate that includes the first greenlight of the Emmerich regime, Ice Cube's "All About the Benjamins," as well as the continuation of five franchises: "Jason X," "Blade 2," "Austin Powers in Goldmember," "The Friday After Next" and, of course, "The Lord of the Rings: The Two Towers."