Boffo film studio in Britain trying to replot finances
It is a plot as full of drama, suspense, and tension as any box office thriller, involving board room maneuverings, movie moguls, and film stars. Britain's Goldcrest Films, responsible for ``Chariots of Fire,'' ``Gandhi,'' and ``The Killing Fields,'' is on the brink of financial disaster.
Goldcrest chief Jake Eberts unveiled a rescue package Jan. 29 to institutional shareholders, hoping to restore financial stability by aggressive new marketing, sharp cost cutting, and reorganization.
``We are meeting with great interest,'' Mr. Eberts says. ``People are rallying around the flag. Nobody wants us to go under. . . . But it will take 18 months to get Goldcrest back on its feet again.''
The most successful of British film companies, Goldcrest almost went under from the failure of its latest big-budget movie, ``Revolution,'' a story about the American War of Independence. Critics attacked it, and it was a box office fiasco in the United States.
Goldcrest's financial straits stem from bad decisions compounded by movies that vastly exceeded budgets.
``It just got too big for its boots,'' one analyst says.
An observer close to the scene points to overly ambitious production schedules in which Goldcrest was making three high-budget films at the same time: ``Revolution''; ``The Mission,'' starring Robert De Niro and Jeremy Irons; and ``Absolute Beginners,'' a musical with David Bowie and Sade set in London in 1958.
Not only was ``Revolution'' criticized as a movie, but several production accidents, including a fire and the loss of a camera crane over a cliff, pushed the final cost to 19 million ($26.6 million) -- a 3 million overrun.
``Absolute Beginners'' was also a medium-budget film that ran over by about 2 million. Sneak previews of the film shown in California have not been encouraging. ``Mission,'' however, was under its 16.9 million budget by 500,000.
Although these costs are not huge by the standards of companies such as 20th Century-Fox, the combined total was almost 39 million, a high price for a company which, until recently, had a reputation for making low-budget movies, rarely costing more than a few million pounds.
As Goldcrest was moving toward blockbuster films, the company had to borrow at high interest rates, with no money being generated by new productions.
Goldcrest's Hollywood style followed a management shake-up in which the founder, Mr. Eberts, reportedly had a dispute with the Pearson Group, the conglomerate that has a large stake in the company. Eberts quit abruptly. Eberts, who denies a conflict occurred, says he left for a better offer from Los Angeles-based Embassy Communications, Norman Lear's company.
James Lee of the Pearson Group took over, embarked on grander projects, and moved the company's head office to posh premises in London's West End. Mr. Lee apparently abandoned Eberts's original portfolio approach to filmmaking and concentrated on a few big projects.
After big losses, Lee was ousted and replaced last year by Sir Richard Attenborough, who persuaded Mr. Eberts to return. Eberts took drastic action, cutting the staff nearly in half and closing down the TV arm, which had been losing money.
At a recent board meeting he adopted what one observer called a ``do-or-die strategy.'' Rather than wait the conventional three years to sell the TV rights to Goldcrest's library of 32 films, he decided to market those rights immediately. He also plans to boost distribution outlets overseas in non-US markets.
Goldcrest is likely to increase the number of shareholders even further. It is holding discussions with one of five potential partners and negotiating for parties to buy a stake in ``Mission'' and ``Absolute Beginners'' to help defray costs. Later in the year, Goldcrest also hopes to announce that it will distribute, outside the US, Sir Richard's cherished project, ``Biko,'' about the black South African activist who died in police custody.
The company's backers have also felt pressure because its parent, the Pearson Group, which owns Penguin Books, the Financial Times, and the Economist, has a reputation to maintain in financial circles.
``Goldcrest had made a total mess of things,'' Eberts admits. ``But my single most important job is to pay that bank debt.''
Even with financial backing, Goldcrest will have a long wait until the company sees any money. The filmmaker is pinning its hopes on ``Mission,'' a David Puttman film, which is to be released in October.
``It's a remarkable film,'' Eberts says. ``It could be a real shot at being a major film. If it's a total flop, it is bad news for Goldcrest.''