MGM mix: The MGM lion's roaring again with "Barbershop's" duet of No.1 weekends and "Igby Goes Down's" upbeat limited release.

Looking ahead, MGM has a number of promising prospects, both near and long term, that suggest the company's mix of making mostly low-cost, high-concept pictures is working well and is starting to generate new franchises. On the other hand, the studio is also making the most of its long-established James Bond franchise. "Die Another Day," the 20th Bond epic, opens Nov. 22 and seems a safe bet to perform well as it springboards off the lucrative Thanksgiving holiday period. On the new franchise front, MGM has just locked up Reese Witherspoon to reprise her role as Elle Woods in the sequel "Legally Blonde 2: Red, White & Blonde." After the sleeper success it enjoyed with the original "Blonde" in the summer of 2001, the studio will be able to launch the sequel next year over the long July Fourth weekend, one of the year's prime moviegoing holiday periods.

Another piece of good news for MGM came earlier this week when Goldman Sachs initiated coverage of the company's stock with a "market perform" rating and a $13.50 per share price target. MGM shares had been trading at less than $12 at the time. Goldman's optimism reflects various factors, including the cash flow generated by the studio's enviable library of films like the Bonds, "Rockys," "Pink Panthers" and Woody Allens.

Talking Tuesday to MGM vice chairman and chief operating officer Chris McGurk we focused on the studio's recent success and the encouraging road that appears to be ahead. "You've seen our film portfolio evolve," he told me, "to the point where it's really reflective of the strategy that we tried to set when we first came here three years ago where the majority of our releases will be lower budget, high concept, highly marketable movies where you know exactly what your audience is going to be -- like 'Legally Blonde,' like 'Barbershop,' like 'Crocodile Hunter,' which we released a couple of months ago and is going to make a nice return for us. The bulk of our slate will be that. And also properties that we think if they're successful have sequel and franchise potential like 'Legally Blonde,' like 'Barbershop' -- we've got a sequel in the works on 'Barbershop' -- like 'Jeepers Creepers.' We've got the Bond franchise, where we hope to be releasing a movie every two to three years, as well.

"We will also do the blue chip movie where we've got a great script and great elements like 'Out of Time' (a police thriller directed by Carl Franklin and starring Denzel Washington, opening in the 2003 pre-summer period). But that movie in the greater scheme of things is relatively inexpensive. It's lower than the industry average negative cost for a movie (which is about $55 million these days). So we hope to have a diverse slate of films, concentrating our efforts on those lower budget, highly marketable, concept driven movies, but as we become successful in that business it creates these franchises like 'Legally Blonde 2,' etc. that, hopefully, you can step up and really do some business with."

Asked how he feels in general about the current success of MGM's "Barbershop," which cost $12 million to produce and will have a cume of $41 million-plus going into its third weekend, and United Artists' critically acclaimed "Igby," which averaged nearly $31,000 per theater when it opened with 10 runs the weekend of Sept. 13-15, McGurk replied, "I feel pretty good. It's taken a while, but it seems like the strategy's beginning to click at both MGM and United Artists. You know, it's always great when you put a low budget film together that's high concept and based on a really good script. I think that's what you have in both instances here. The filmmakers in both instances delivered outstanding movies. And when you've got an outstanding movie, the rest is easy."

"Barbershop," directed by Tim Story, was "well received critically," he said. "Audiences seem to love it. The exit polls have been fantastic. And I think we had a marketing campaign with our new head of marketing, Peter Adee, that really hit the spot. Everything seemed to click. But, again, it all stems from the fact that we had the goods with a really, really good movie. And the same thing with 'Igby.' A great cast. A first time director, Burr Steers, who delivered a movie that (a) audiences love and (b) the critics responded to very, very favorably and was very well reviewed. I think our campaign on 'Igby,' as well, really helped get it launched."

The films' openings also benefited from good distribution timing. "We released both movies at a time of the year which traditionally isn't the strongest month of the year," McGurk noted. "I think it kind of helped (having) a less crowded market for audiences to find both movies." While the studio's distribution operations continue under the division's president Eric Lomis, the marketing side has seen key changes. "We added Peter Adee (who had run marketing for Universal)," he said. "We also added a new head of creative advertising, Steve Miller, who we brought over from New Line a few months ago, where he had done the campaigns on 'John Q' and 'Lord of the Rings' (whose success is) a damn good recent pedigree. Obviously, it paid off in the campaign for 'Barbershop' and it makes us very confident about the releases we have over the remainder of the year, particularly the Bond movie, which is our next major release coming out."

The new Bond film is, of course, a tent-pole picture that most observers are pointing to optimistically. "Well, we're confident," McGurk observed. "We feel very good (about its prospects). We've seen a lot of the movie -- it's not totally complete -- and we feel that the producers, Barbara Broccoli and Michael Wilson, and the director, Lee Tamahori, have done a fantastic job. We're very confident that like with 'Barbershop' we have the goods with this movie. We're in the midst of completing a marketing campaign, which will be global in scope."

Along those lines, there was word last week that 7 UP will be doing a major consumer promotion for "Die" in which it will set out to find its own "Agent 007 UP." "And we've got a huge deal with Ford and with Phillips and Finlandia Vodka, etc., etc., etc.," McGurk told me. "And when you add up all that promotional support on top of our own campaign and tie-ins that we're doing with MTV and others, it certainly will the biggest and most comprehensive campaign in support of a Bond launch that we've ever done."

On the "Blonde" front, the studio announced in early September that it had been able to put a deal together for Reese Witherspoon to star in and executive produce the sequel to her 2001 surprise summer hit, which grossed nearly $100 million in domestic theaters. "We're thrilled that we were able to put that together and that Reese has decided to come back and reprise her role," McGurk said. "We signed a director, Charles Herman-Wormfeld, who we think is very hot and has a lot of promise. He did 'Kissing Jessica Stein' (a low budget success last year for Fox Searchlight), a terrifically directed movie. He really gets (Reese's 'Blonde' character Elle Woods) and he hit it off very, very well with Reese. There was good chemistry there. We're going to go into production in November and we're going to have the movie for next Fourth of July. We're very encouraged. So we've got that movie, and we've got Denzel Washington's next big studio movie. He did the 'Antwone Fisher' story (coming from Fox Searchlight this December), which he directed. And we've got 'Out of Time' with Denzel, which is a thriller directed by Carl Franklin, who directed him in 'Devil In a Blue Dress.' We're very encouraged with that movie. That probably will be (next) May-June. We also have another low-budget sequel in the works, 'Jeepers Creepers 2.' The first one was extraordinarily successful for us. That will come out in February or March. So we've got a number of things in the hopper."

The company's presence in the marketplace is greater not only on the MGM side of the corporate fence, but also on the United Artists' side. "Bingham Ray (UA president) has done a fantastic job of assembling a slate at United Artists," McGurk noted. "Besides 'Igby,' we have 'Bowling for Columbine' coming out Oct. 11, which is Michael Moore's documentary (about firearms abuse in the United States), which caused such a stir at the Cannes Film Festival (where it won a special 55th Anniversary Prize). And then we've got Mike Leigh's 'All or Nothing' (a London set ensemble cast drama opening exclusive runs Oct. 25). And 'Personal Velocity' (a drama about three women's escapes from their troubled lives, directed by Rebecca Miller and starring Kyra Sedgwick, opening exclusively Nov. 22), which won the Grand Jury Prize at Sundance.

"And we have a wonderful movie called 'Evelyn,' which Bruce Beresford directed (and stars) Pierce Brosnan, which comes out right before Christmas. And we finish the year with 'Nicholas Nickleby,' directed by Doug McGrath, who directed 'Emma.' It's got an incredible all-star cast (including such stars as) Jim Broadbent, Christopher Plummer, Alan Cumming, Nathan Lane, Jamie Bell, who was so spectacular in 'Billy Elliott.' And on and on and on. We've seen that movie and we're very confident that that's a movie that's going to be very well received. We've got a nice line-up of films that Bingham has put together at United Artists, as well, which we think is a great compliment to what we're doing at MGM."

Among the projects MGM is developing is the recently announced urban comedy "Soul Plane," which looks promising in view of the studio's success with its present urban comedy hit "Barbershop." "It's a development project that we've got in the hopper that to some extent is like a take-off on 'Airplane,'" McGurk said. "We're very encouraged (about its potential) and, hopefully, we've got it on a fast track to develop and we can have that within the next year, as well."

Not only has MGM succeeded at keeping a lid on what it spends to make most of its films, but it's also managing to hold down its marketing costs. With "Barbershop," about $12 million went into production but, McGurk observed, "The beauty of it is that because it was a very targeted marketing campaign, we spent about the same amount in marketing to open the movie -- which is about half of what I think people spend on average now to open a movie." As a result, MGM is in for about $24 million all told instead of the $39 million or $40 million that might have been the case.

"It will be extremely profitable," he said, agreeing with speculation that "Barbershop" having already cracked $41 million is heading towards $60-$65 million domestically. "It's begun to cross over and it's getting great word of mouth, so you just never know. If it does $60-$65 million, we'll be thrilled. We've got a video afterlife. It's going to do very well in video and TV and, again, we're already working on a sequel and potential spin-offs."

When might the sequel come out? "We'll try to do it on as fast a track as possible," he replied, "but I think it would be pretty aggressive to think we'd have it for next September. But now that we've got a known property, just like (with) 'Legally Blonde,' we're going to come out on a holiday and I think people will move away from it. I think it will be the same situation with (the sequel to) 'Barbershop.' So we can pick a more traditional release date now (for) the movie and, hopefully, our competitors will run for the hills." That is, of course, one of the nice things about building franchises.

Given MGM's approach, McGurk pointed out, pictures don't need to be huge grossing blockbusters in order to be nicely profitable. A good example, he said, was last summer's "Crocodile Hunter," which was "a $12 million movie. It wasn't exactly as big a franchise as some of these other Nickelodeon movies or Disney movies and didn't have that brand on top of it. And it wasn't a sequel of a big family theatrical release. We always knew that the goal was just to get it established at the boxoffice. It was a movie that we knew would do great in TV and in video and in DVD. So the fact that we did just under $30 million at the boxoffice on a $12 million movie (was good) particularly in comparison to some of the other family films this summer. (It) was a very tough, crowded marketplace and a lot of these movies that were based on pretty successful franchises didn't work at all or really under-performed. We felt good about ('Crocodile's) boxoffice number and, again, because of our low investment in the movie we're going to make a very, very nice return on investment on it. It goes to DVD on Dec. 17 and we're very encouraged by the pre-orders on it. So that's a nice little business to be in. It's great to have tremendous boxoffice, but really when you cut through it all it's better to have a nice return on investment."

Summing it all up, McGurk points to the importance of the product, itself. "One of the reasons we feel good about the slate (we have is that) we've got good movies," he said. "And that always helps. We made some mistakes in the last year or so, but now I think we're at a place we're comfortable with -- starting with the fact that we've got some real quality movies both at MGM and at UA."

Martin Grove is seen Mondays at 9 a.m. and 4:30 p.m., PT on CNNfn's "The Biz" and is heard weekdays at 1:55 p.m. on KNX (1070 AM ) in Los Angeles.