The Big Picture Goes to Lunch

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Irwin Winkler is a producer’s producer, having made so many groundbreaking movies (from ‘They Shoot Horses, Don’t They’ to ‘Rocky’ to ‘Raging Bull’ to ‘GoodFellas’’) that you almost feel guilty talking to him about what’s going in the business today, since you’re really dying to hear another Stallone or Scorsese story. We had lunch at the Hillcrest Country Club (his choice, he’s a longtime member), which is sort of a trip in itself, being a getaway for generations of Hollywood princes, starting with virtually all the original studio moguls, generations of William Morris agents and a host of venerable comics. It was the first place I ever laid eyes on Groucho Marx, who was of course speaking of Hillcrest when he said, ‘I wouldn’t want to belong to any club that would accept me as a member.’ He joined anyway.

After spending years at music clubs where I often feel like a geezer, it was refreshing to be in a crowded lunch spot where I was easily the youngest person in the room. At 76, Winkler is now an elder statesmen in Hollywood, but he doesn’t live in the past. He’s still got projects going around town, having directed ‘Home of the Brave,’’ one of the first Iraq war films, a year or so ago. He knows everybody, so we end up gossiping about current events, whether it’s what is really going on at MGM, why Winkler’s pal Mort Zuckerman still can’t believe how James Dolan outbid him for Newsday or the fall-out from the writers strike--Winkler says it will take the WGA 15 years to recover, noting that scribes are already feeling the studio pinch; writers who got $300,000 for a script before the strike are lucky to get $150,000.

But Winkler’s most interesting theory is about a Bigger Event: He thinks Hollywood is going through a wrenching time of tumult and, when it comes out the other end, will be a very changed business. Here’s how he put it: ‘Look at the all big institutional changes in movie history. Edison invents the camera. D.W. Griffith creates film vocabulary. Then you have the invention of sound, the arrival of Technicolor, and in the mid-late 1970s, the mass marketing of blockbuster pictures like ‘Jaws’ and ‘Star Wars.’ But now we’re seeing something big. Hollywood has been funding almost all of its movie slates with outside equity money for the past six or eight years. But that money is in danger of going away, because the markets are in such trouble.’’

As he explains it, the studios have a great racket. Most of their movies are bankrolled by outside financiers, which encourages them to pump up their grosses, since the real money they make comes from their distribution fees. And the bigger the gross, the bigger the fee. The studios spend tons on marketing, but as a rule, they cover their marketing expenses (known as P&A) before any investor starts to see a return.

But these days, the theaters are so overcrowded with films that something’s gotta give. If outside investors get stuck with enough bombs like ‘Speed Racer’’ (co-financed by Village Road Show) or ‘The Assassination of Jesse James’’ (co-financed by Virtual Studios), just to name two recent Warner Bros. flops, that money will dry up, especially in a pinched credit market. ‘Things are so precarious now,’’ says Winkler, ‘that you have to cast a script without really making an offer to their clients, because the foreign sales on most movies are so dependent on having a big star in the film. If an outside equity firm like Relativity [which backs a sizable amount of the WB slate] has too many flops and gets out of the business, then Warners will end up putting up the money themselves.’’

Winkler raises an eyebrow. ‘It’s one thing for the outside guys to lose their shirt. But if Warners starts losing their investment, how long do you think [Time Warner chief] Jeff Bewkes will stand for that?’’ And you wonder why people say the movie business is a tough business these days.

With lunch nearly over, I reached for my wallet, half out of fear that all my money might have disappeared during this sobering lecture, half out of an eagerness to spend some dough while I still had it. Winkler waved me off. ‘It’s a house rule here. Only members can pick up the check.’’

In Hollywood, of course, it’s only the outside investors who get stuck with the tab.