• Hollywood Partners Signs LOI to Merge Peter Hoffman's Seven Arts Pictures
• Hollywood strike negotiations enter last days
• Cate Blanchett tipped for sci-fi extravaganza
• Nigel Havers plays villain in next James Bond
• George Clooney makes his feature directing debut
• Jude Law says A.I. is a tribute to Kubrick
• Fast and Furious sequel in works
• Benigni's "Pinocchio" comes to life in Italy
• Xena's ending upsets US fans
• John Cooke to Head Actors Guild
• Two controversial Bollywood period films have been breaking Indian box-office records, despite playing at the same time.
• Sundance Channel and Hypnotic to Jointly Produce Series of Short Film Programs
• Hollywood studios have been getting a bit too creative in their ad campaigns.
• Spain's secretary of state, announced the ministry would boost its funding for audiovisual promotion

Hollywood Partners Signs LOI to Merge Peter Hoffman's Seven Arts Pictures

Hollywood Partners.com Inc. (OTCBB:HLYP) today announced that it has signed a Letter of Intent (LOI) to merge with film producer and production executive Peter Hoffman's Seven Arts Pictures. Upon completion of the merger, Hoffman will join Hollywood Partners as CEO. In accordance with the terms of the LOI, Hollywood Partners intends to acquire:

• Seven Arts' library of 20 projects currently in development;
• Seven Arts' overhead agreement and first look deal with Paramount Studios;
• The Seven Arts trademark;
• First option on Seven Arts' film library of 15 completed feature films;
• A 5-year exclusive commitment from Peter Hoffman to serve as CEO of the joint companies.

Peter Hoffman has been an active member of the entertainment industry for more than two decades as an executive, an independent producer and an attorney. Hoffman served as president and CEO of Carolco Pictures from 1986 to 1992. Under his leadership, Carolco went public and listed on the Nasdaq stock exchange, grew to a market cap of more than $700 million and became one of the world's leading independent film entertainment companies.

Hoffman was directly involved in the production of blockbuster hits such as "Terminator 2," "Basic Instinct," "Total Recall," "The Doors," "Rambo III," and many other films of various genres.

Prior to joining Carolco, Hoffman was a founder and partner in Gipson, Hoffman & Pancione, a Los Angeles-based law firm. Currently, Hoffman is the chairman and founder of Seven Arts Pictures, an independent producer and distributor of feature films, and chairman and founder of CineVisions, a financing, risk management and consulting firm servicing the entertainment industry.

Since its inception, Seven Arts has produced and distributed motion pictures including "Rules of Engagement," "Johnny Mnemonic," "9 1/2 Weeks II," "Onegin," and "Duets."

"Peter's reputation and track record in the entertainment industry, as well as his success in running Carolco, make him the ideal person to lead Hollywood Partners. The combination of Seven Arts' assets, Peter's long-standing relationships and achievements in the entertainment industry, and our Hollywood Partners creates a wonderful foundation for building a leading independent film and entertainment company. We are honored and excited to be working with Peter," commented Mark Beychok, chairman of Hollywood Partners.

Hoffman added, "Due to industry trends and shifts in financing and distribution of motion pictures, I believe this is an ideal time for Seven Arts to be merged with a publicly traded company which can give us more flexibility and greater opportunity to finance and produce a larger slate of pictures. We also intend to grow Hollywood Partners through further acquisitions and stronger ties with motion picture distributors."

The closing of the merger with Seven Arts will be contingent upon completing due diligence, negotiating and executing a definitive acquisition agreement, negotiating and executing an employment contract for Hoffman, and arranging for adequate financing.

John Coppolino, president of Hollywood Partners, added, "We are working hard to satisfy these conditions and complete the merger before the end of the third quarter. We also intend to raise the capital required to exercise our option on the purchase of the completed film library, which will provide the company with immediate income and long term cash flow, while building value on the balance sheet."

Although the company has signed this letter of intent with Hoffman, no assurances can be given that the conditions precedent to closing the transaction will be met and that the definitive agreement will be executed.

Contact: Vision Corporate Consulting, Dilek Mir, 310/574-1940, HLYP@visioncc.net

Hollywood strike negotiations enter last days

Negotiations between the American actors union SAG and the Hollywood studios have stepped up a pace with the expiration date for agreement now only four days away. According to Variety, bargaining has gone into overdrive with sessions now lasting late into the night, although both sides are continuing to observe the news blackout that surrounds the negotiations and refusing to disclose details. Although, it is uncertain how much progress has been achieved, sources added that a deal is likely to emerge near the midnight Saturday expiration of the contract covering the Screen Actors Guild (SAG) and the American Federation of Television & Radio Artists (AFTRA).

Cate Blanchett tipped for sci-fi extravaganza

Cate Blanchett is believed to be close to signing up to join Brad Pitt in a new sci-fi project due to be directed by Darren Aronofsky. The project is shrouded in secrecy but Variety reports that Warner Bros are keen to get the project off the ground as soon as possible. Blanchett, who will give birth to her first child later this year, has completed three films in the last year: Charlotte Gray, directed by Gillian Armstrong, The Shipping News, with Kevin Spacey, and The Lord of the Rings, with Ian McKellen. It has also been rumoured that she will take the lead role in Chasing the Dragon: The Veronica Guerin Story for Joel Schumacher.

Fast and Furious sequel in works

Work on a sequel to the surprise hit, The Fast and the Furious, is already under way. The controversial thriller about Los Angeles joyriders went straight to the top of the American box office this week, pulling in a huge $41.6m, and producer Neal Moritz has admitted talks have already started on The Fast and the Furious 2 with writers working on a preliminary script. Moritz also reveals that the current film has a final "hidden" scene that the audience won't see until after the closing credits, which appears to pave the way for a follow-up. The news of a sequel won't please American police who have been forced to patrol cinema car parks to prevent drivers from trying to emulate the film's dangerous stunts. However, unrepentant director Rob Cohen has defended the film saying: "We show what happens when a car goes out of control. We show the consequences. It doesn't tell kids to go out and race. If that's the message they take from my movie, then they weren't paying attention."

Nigel Havers plays villain in next James Bond

The latest person to have been promised a role in the next Bond film by producer Barbara Broccoli is smooth talking actor Nigel Havers. According to the Daily Express today, the Havers is set to play a villain in the next 007 adventure which is due for release in November 2002. "I always wanted to play Bond but I've totally missed the boat now, I'm too old," the 51-year-old actor told the paper. "Now I want to be a villain and Barbara, who is a great friend, has promised I'll be in the next film. It will be a lot of fun to play against Pierce."

George Clooney makes his feature directing debut

George Clooney is preparing to make his directorial debut on a film about the life of an American gameshow host. The 40-year-old actor was initially to have co-starred alongside Johnny Depp in Confessions of a Dangerous Mind, which charts the life of The Gong Show presenter Chuck Barris who was also an assassin for the CIA. Although the film was scrapped earlier in the year, the project is reportedly now back on track, with Clooney taking over the director's chair from Bryan Singer. Clooney, currently filming Ocean's Eleven for Steven Soderbergh in Las Vegas, is expected to turn to the Traffic director for help with the film.

Jude Law says A.I. is a tribute to Kubrick

The long-waited Steven Spielberg/Stanley Kubrick collaboration A.I. Artificial Intelligence premiered in New York last night. The film, which has been shrouded in secrecy while shooting, is set to go on general release in America at the weekend, although British audiences will have to wait until September 21 to see the futuristic thriller which stars Jude Law and Haley Joel Osment as robots in the late 21st Century.

Speaking at the premiere, Jude Law said that the film is a tribute to Kubrick, who had been working on the film for several years before his death in 1999. "I hope he would be proud not just that his film was made but that his friend made his film," he said. "It has a lot of what Stanley Kubrick was about. It felt a lot of the time like we were looking back over his career."

The film, based on a short story by Brian Aldiss, was a project close to Kubrick's heart. After 15 years working on the project, he asked Spielberg to direct it shortly before his death. Law believes that Spielberg was the right man for the job. "It was challenging but it was being led by an extraordinary man," he said, adding that he was a "joy" to work with.

Benigni's "Pinocchio" comes to life in Italy

Italian actor/director Roberto Benigni started shooting the country's most expensive film ever, "Pinocchio," amid tight security Monday.

Shooting took place in a converted chemical factory transformed into a studio in the southern village of Pignone, near Terni. No reporters were allowed on the set of the $45 million fairy-tale picture, which Miramax will release worldwide (except in Italy) at the end of 2002.

Among the few allowed inside the highly guarded studio was Terni's bishop, Monsignor Vincenzo Paglia, who has blessed the set and talked at length with Benigni. "I have found many analogies between 'Pinocchio' and the Bible," the actor reportedly told the bishop. "I have used some inspiration from 'Life Is Beautiful' to teach religion; I hope I'll be able to do the same with 'Pinocchio."'

Benigni plays the title role, and his wife, Nicoletta Braschi, plays the Blue Fairy. Local producer Cecchi Gori will distribute in Italy. Benigni won the lead actor Oscar in 1999 for "Life is Beautiful," an acclaimed Holocaust comedy.

Xena's ending upsets US fans

Fans of Xena: Warrior Princess are bombarding internet message boards to complain about their heroine's death. They were hoping Xena would bow out with a happy ending leaving a return possible. But she dies in the last show of the sixth series which has just been screened in the US. While fans are fuming, critics say the finale was true to the spirit of the show.

Rob Tapert, co-creator and executive producer of the series, says the reaction is "exactly what we thought it would be".He told E! Online that he did not want to upset viewers but felt it had to be emotional for the right reasons. However, fans have already launched a Bring Back Xena to the Xenaverse petition. They are asking producers to revive Xena because their "hearts need to mend".

John Cooke to Head Actors Guild

John Cooke, a former executive with the Walt Disney Co., has been named director of the Screen Actors Guild. Cooke will serve as the union's chief executive officer and national executive director, it was announced this week. He replaces Ken Orsatti, who retired. Since last year, Cooke has been executive vice president for external affairs at the J. Paul Getty Trust. Before that, he was on the group's board of trustees for four years. Cooke had previously worked as a vice president for corporate affairs at Disney, and he spent 10 years as president of The Disney Channel.

Two controversial Bollywood period films have been breaking Indian box-office records, despite playing at the same time.

Land Tax (Lagaan) and Mutiny - A Love Story (Gadar-Ek Prem Katha) have been playing to full houses since both films opened 10 days ago. Box office for Lagaan is expected to increase as it moves into its third week.

Both titles are exceptions to the usual soft-centred romances which tend to dominate Bollywood fare. Lagaan is the story of the fight by 19th century peasant farmers against oppression during colonial rule, while Gadar is set during India's partition.

The success of the two high-profile pictures has left the Indian film industry breathing a massive sigh of relief after several recent disappointments. Local reports had predicted the period pictures would eat into each other’s takings.

Gadar-Ek Prem Katha has also been been making headlines for other reasons after Indian police had to step up security around theatres after an angry mob set light to a screen in Ahmedabad where it was playing, protesting at what they described as "anti-Muslim" remarks in the film.

And Lagaan has been creating quite a stir internationally with its simultaneous worldwide release. On its first week in the US, it earned $285,368 from 34 screens. And in the UK, it took $128,024 from just four screens for a stonking $32,006 screen average.

Sundance Channel and Hypnotic to Jointly Produce Series of Short Film Programs

Sundance Channel and Hypnotic have joined forces to produce and exclusively distribute a series of thematic one-hour short film programs. Larry Aidem, President and CEO, Sundance Channel and Jeremy Bernard, President and COO of Hypnotic made the joint announcement today. Titled Sundance Channel and Hypnotic Present Shorts Stop, the programs will be sold both domestically and internationally to ancillary outlets including airlines, broadband channels, international television networks, video-on-demand/pay-per-view services, hotels, and institutions.

"Short films have always been a core part of Sundance Channel's programming," comments Larry Aidem, President and CEO, Sundance Channel. "This program with Hypnotic gives us a unique opportunity to extend the Sundance Channel brand to new audiences and expand the scope of opportunities for short filmmakers."

Over the course of the next year, Hypnotic and Sundance Channel will produce a series of co-branded one-hour episodes. Utilizing Hypnotic's extensive library of award-winning shorts and animated films and Sundance Channel's curatorial and editorial expertise, the programs will be thematically based and focus on topics such as women, student filmmakers, animation, relationships, and urban films. Using one-on-one interviews and behind-the-scenes footage, the series will look at the filmmakers and creative process behind the short films.

"This new series demonstrates our commitment to working with established brands like Sundance Channel to reach a wider audience and open new, profitable markets for short films," said Jeremy Bernard, President and COO of Hypnotic. "We are excited about working with Sundance Channel in this venture and in support of independent films and filmmakers."

In a separate deal also announced today, Sundance Channel has acquired the U.S. pay television rights to three short films through Hypnotic. The films are: Anthony Dominici's Peter Rabbit and the Crucifix, the story of three children who turn to a glow-in-the-dark crucifix when their pet rabbit gets sick. This short received an Honorable Jury Mention at the 2001 Sundance Film Festival. Greg Durbin's Boundaries is the tale of a young woman pursued through Tijuana into California by a mute trombonist with an unusual way of showing his affection. This was the Slamdance 2001 Grand Jury Prize winner; and Ari Gold's Culture, a 1998 Sundance selection, is a 60-second send-up of Dogme95 that is a no-frills, one-man action extravaganza as well. The three films are all under consideration for inclusion in the new Sundance Channel and Hypnotic series.

Hypnotic is an entertainment and marketing services company that leverages its relationships with emerging filmmakers to acquire, develop, produce and distribute independent films, episodic content and television properties as well as commercials, sponsored productions and events for advertisers and brands looking to target the 18-34 year old demographic. The Company has developed relationships with thousands of emerging filmmakers and manages one of the world's largest libraries of short films and animations, which it distributes to domestic and international television, movie theaters, airlines, hotels, pay-per-view and broadband channels. The Company's major investors include Vivendi Universal, Knowledge Universe, Dresdner Kleinwort Wasserstein, Windsor Media and Entertainment Media Ventures. Hypnotic maintains offices in New York and Los Angeles and is a wholly owned subsidiary of Enigma Media, Inc. Hypnotic's website address is http://www.hypnotic.com.

Under the creative direction of Robert Redford, Sundance Channel brings television viewers daring and engaging feature films, shorts, documentaries, world cinema and animation, shown uncut and with no commercials. Through its original programs, Sundance Channel connects viewers with filmmakers, the creative process, and the world of independent film. Launched in 1996, Sundance Channel is a venture between Robert Redford, Showtime Networks Inc., and Universal Studios. Sundance Channel operates independently of the non-profit Sundance Institute and the Sundance Film Festival, but shares the overall Sundance mission of supporting independent artists and providing them with wider opportunities to present their work to audiences. Sundance Channel's website address is http://www.sundancechannel.com.

Hollywood studios have been getting a bit too creative in their ad campaigns.

(By Nancy Chandross ABC)

Now that Sony has admitted to using a fake critic in its advertising, another studio is being accused of deception. What do the real critics think? While a few are not surprised, they hope it makes their own reviews more credible

The industry known for its grand theatrics in building hype and excitement may find itself the subject of a legal battle for creating fictional hype while promoting its screen offerings.

Sony has admitted it created David Manning, a fictitious critic on a real Connecticut newspaper, who called Rob Schneider's goofball comedy The Animal "another winner!" The studio further admitted that it gave staffers an extra job — posing as audience members to praise The Patriot. One "random" person called the Mel Gibson vehicle "the perfect date movie."

The Manning stunt left two employees on suspension, while sparking an investigation by the Connecticut attorney general's office, which will determine whether Sony may have run afoul of Federal Trade Commission rules governing advertising. In the weeks since the Manning story came to light, more instances of questionable advertising have arisen.

Variety reports a former Fox Searchlight employee called Waking Ned Devine "hysterical" in an ad. The studio declined to comment on the report. "To just make it up is deceptive and unethical," said Advertising Age editor Scott Donaton. "I think it's just as bad as if General Motors or Procter & Gamble did it."

Stepping on the Critics' Toes

In the world of filmmaking, where reviews and opinions can make or break a movie in the matter of a weekend, advertising is clearly a serious matter.

"I don't think that the kinds of things that Sony's been caught doing are widespread. I do think it's likely that you'll have a smattering of other examples pop up," said Donaton.

Sony admitted to employing Manning for four of its Columbia Pictures releases, Hollow Man, The Animal, Vertical Limit and A Knight's Tale, with the phony critic calling that film's leading man Heath Ledger "this year's hottest new star!"

But given the number of critics around, did they really have to lie? "It's hard to imagine that they would find it hard to find a critic that likes something in America," said Washington Post critic Desson Howe. "This country is overpopulated with helium-filled movie critics who like anything."

And the over-the-top praises often seemed suspicious to Joel Siegel, film critic for ABCNEWS' Good Morning America. "I read a lot of quotes and I wonder, 'Who in the world would say this about that movie?'" said Siegel. "Nobody is surprised when Hollywood lies, they lie all the time. They tell us their movies are great and they [often] stink."

He was struck by how much weight is placed on critics' quotes. "I was laughing on the floor," said Siegel. "I had no idea [studios] were so concerned about what we said, concerned enough to lie about it!"

Attracting Too Much Attention

While movie advertising may not seem as potentially dangerous to consumers as a misleading campaign for health products, the phony critics could still do some harm, Donaton said. "I think Hollywood has invited the FTC in the door here, the ad industry's worst fear," he said. "What the ad industry always tries to do is prove that [it's using] self-regulation and avoid federal regulation."

Hollywood is already facing FTC scrutiny. The government has accused studios of marketing violent content to young adults and wants that practice to end.

Donaton says the studios are well aware that they may need to clean up their advertising act, at least with respect to the testimonials. "We've done some reporting with the heads of major studios [who] say they're reviewing their marketing practices, making sure that the guidelines they have in place are being followed," he said. While Howe is skeptical anything will change, he hopes at least the public will be more aware of the "hype factor" in Hollywood advertising, even if briefly.

"This will be forgotten," said Howe. "It's just a testament [that] it's an industry that needs people to go to movies at whatever cost." But will it taint the words of the critics? Siegel doubts fans will stop reading reviews. "If anything, I think it will enhance what I do because I'm a real person!"

Spain's secretary of state, announced the ministry would boost its funding for audiovisual promotion

Spanish producers can already begin tapping into a new promotion fund for films released abroad, thanks to an initiative launched by the state Ministry of Economy with support from the Spanish Producers' Federation (FAPAE). The fund is effective immediately.

Juan Costa, Spain's secretary of state for commerce and tourism, announced yesterday in Madrid that the ministry would boost its funding for audiovisual promotion from $296,000 (PTS57m) to $2.6m (PTS500m) annually in an initial three-year initiative running from 2001 to 2004.

The goal is to foment broader exportation of Spanish films through initiatives such as an increased presence at international markets and festivals, enhanced Spanish-focused events such as the Spanish Film Screenings for Europe in Lanzarote, support for the creation of sales consortia and on-going analyses of market trends.

But arguably the most anticipated component of the initiative is the new Foreign Premieres Support Programme. Producers, a number of whom atypically turned out for the press conference where the initiative was announced, were told they could apply for funding of up to $86,320 (Euros100,000) per film released outside of Spain, with grants not to exceed 50% of promotional expenses per film, per country.

Representatives of FAPAE suggest they expect only an average seven to 15 films - out of the 80 to 100 produced annually in Spain - to qualify for access to the funds. In other words, that few Spanish films currently secure international releases - a sign of the times which both Costa and FAPAE acting president Eduardo Campoy highlighted as the impulse behind the new programme.