Creativity driving CP global growth
EmptyUPDATED Thursday, May 1, 2008 9:15 p.m. PT
CP creativity: Creativity has always been the name of the game in Hollywood, but these days it's playing a key role in more than moviemaking.
As the film business copes with the challenges of funding ever increasing production costs, creativity on the financing front is starting to emerge as an art unto itself. A case in point is CP Productions, the partnership headed by Michael Cerenzie and Christine Peters, which is based at Paramount with a traditional first-look studio deal but is also active as an independent production company that is securing financing from domestic and international sources.
On the heels of its recent deal with Ghostrider Entertainment to co-finance 10 thrillers over the next three years with budgets ranging from $8 million to $20 million, CP has also assembled major money to fund production of bigger, broader-appeal films and is tapping into new sources of content for its production pipeline, including the Japanese comic books known as Manga, other Japanese anime, video games, graphic novels and hit Asian movies that are ripe for remaking.
I was happy to have the opportunity to focus recently on developments at CP with Michael Cerenzie, who I'd spoken to here last fall when his production of Sidney Lumet's "Before the Devil Knows You're Dead" opened to favorable reviews and an early awards buzz.
"After Christine and I formed our company, what we decided to do was also keep the trend of what I was doing independently in the finance world and just expand upon that so that we're in a position to co-finance and finance properties up to 50 percent or in their entirety and then do rent-a-system or distribution deals with the studios," Cerenzie told me. "We feel this gives us a lot more flexibility as a production company moving into this area where the industry as a whole is headed right now."
So it's a case of being creative on the financing front as well as in the artistic arena. "My feeling and Christine's feeling is that what really brought us together were two things," he explained. "One was that we felt a lot of the success that we wanted to focus on that we've seen historically in the last two years was actually going after comic books, graphic novels, Manga, pan-Asian remakes and even toy companies and novels and using those as IPs (intellectual properties) to reach the younger demographic of what we feel has become the future of films.
"At the same time, we've been aggressively raising financing so we would be able to up our production slate on an annual basis so that we weren't necessarily dependent on just the studio green-lighting projects because we know it's become more and more difficult as people have cut their slates back more and more."
With CP's Ghostrider deal the financing resulted in bringing a lot of production to Mississippi that would otherwise have never gone there: "The Mississippi deal was very important to us. Eric Thompson, who had recently left Maverick Red, which was the genre division of Maverick Films, came over to basically co-found and run our genre division. It actually encompasses a lot larger canvas (than just horror movies), dealing with specialty projects like 'Before the Devil Knows' or films like 'Juno' as well as horror pictures. So it's really a specialty division. The real upside (developed) when I met with (Ghostrider Entertainment owner) Wes Benton, who was a big part of doing this deal. Wes is an expert in motion capture, editorial and foley. What started out as being an idea of going into Mississippi and creating a film fund to make movies there with tax benefits expanded after we met with Wes.
"I had just done 'Black Water Transit' (the crime drama directed by Tony Kaye) and we had spent a lot of time in New Orleans. Seeing the devastation that is still going on because of Hurricane Katrina, it was much more of a personal interest story for us and motivated us to go there because they got totally wiped out in Mississippi on the Gulf. What we came up with is we're in the midst of purchasing 84 acres, which is being led by Ghostrider and Red Planet Entertainment. We've been dealing directly with Ward Emling, who's the Mississippi film commissioner, who's been wonderful in endorsing what we have planned there. We're building two very large basically stand-alone studios. They have the full capacity of a Hollywood studio in the sense that they have their own editorial systems with Avid machines, they have all their post facilities built in and they have motion capture. It's state of the art. It's not anything other than what you would find in London or in Los Angeles or New York."
After Katrina hit the Mississippi Gulf Coast, Cerenzie added, "they found that five miles inland right after the I-10 was kind of the break point that protected them from the water damage. So the 84 acres that are being acquired are north of the I-10. It's not a safe zone from an actual hurricane or tornado, but it's a (site with) major protection from water damage. What happened during Katrina in Mississippi and also in New Orleans was that people couldn't get out because all the roads got jammed up. There was no way to escape the trauma of the hurricane. So these soundstages actually double for shelter during a hurricane situation and they're literally being built for the purpose of having their own built-in commissary and satellite dishes so that several thousand people could be housed as protection if a hurricane did hit while we were down there.
"So that became a big deal for Wes, Eric and ourselves. I think it was a little surprising for the folks in Mississippi to (see) that a Hollywood company would be thinking along those lines. The longer range plan is creating a film and music festival that will take place there. It will probably take a year or two to put in place, which they're very excited about because it's the home of blues. We're going to include a music festival as well as a film festival to help promote the filmmaking industry in that area and also help keep jobs and invigorate the economic side of what's going on. Hopefully, more stores will come back and hotels will come back and casinos will come back. So it's really about reinvigorating the economy as well as making projects there with the company."
At the same time, CP is also busy raising production coin for other projects. "We're in the midst of finalizing another very large fund -- much larger than this first fund for $100 million -- which will be more focused on what I would call mid-to-larger level tentpole productions which we would co-finance with a studio," Cerenzie noted. "We feel that we can be very helpful not only as content providers but also from the financial point of view of the deal. What we've done in that arena so far is we've made a lot of inroads into making deals with several different Manga comic book companies, working on pan-Asian remakes, graphic novels and toys as well as proper novels that we use as our IPs, building in that content that we will be financing and developing with the studios and have some studios distribute those films.
"No matter how much money you raise -- even if you're raising a billion dollars -- at the end of the day the distributors in the studio system have been doing it for a hundred years. So we have no plans to actually go in to the domestic distribution side of it. We're going to leave that to them. They're the professionals. They do it better than anyone. They've been doing it forever and we're not interested in trying to reinvent the wheel on that side."
CP has had at Paramount, Cerenzie emphasized, "a very wonderful experience with the transition of management here -- especially with (production president) Brad Weston, (Paramount Film Group president) John Lesher, (vice chairman & president of distribution, marketing & operations) Rob Moore, (Paramount Vantage president) Nick Meyer, (Paramount Vantage executive vp, production & acquisitions) Amy Israel and (Paramount Pictures Corp. chairman) Brad Grey. When they recently announced the deal they made basically on a VOD channel with Lionsgate and MGM I thought it was a brilliant move and ahead of its time on where we're heading with the VOD system. So we feel that we're with a great group of management that support us and we want to do our best to be supportive of them and be a larger content provider for the studio."
Looking ahead, he said, "The larger-scope plan for the company is basically the formation of CP Global Entertainment, which will become the parent company and will be a larger funding multi-media company that will develop films from (the wide range of sources Cerenzie outlined here) and actually have offices in Japan, in China, in South Korea and in Thailand. We are creating deals right there where the product is coming from. Picking through a lot of existing IP libraries, which is historically what most of us do as producers, we feel is a little archaic. The idea today is to develop structured deals with new toy companies and these other Manga, comic books and graphic novels and help build some of these smaller comic book companies into larger entities.
"We have a way of doing that by serializing, say, a graphic novel that has only sold 3,000 copies. By getting into the publishing side of it on the ground in those territories as well as in the United States and the U.K. we have a way of taking a graphic novel that we think would be an amazing piece of material but doesn't have the same reach as, say, a graphic novel like '300' or '30 Days of Night,' which sold much more product, so it then creates a larger value for those IPs and helps build those companies which we want to help grow within their own industry, as well. So we're looking at a lot of joint venturing within the pan-Asian territories."
Asked what he thinks accounts for the strong degree of interest today in Asian remakes, Cerenzie replied, "If we look back over the last 30 years, we always did a lot of Italian and French remakes especially in the romantic comedy sector. I think what we've seen today is a larger growing trend within these Asian markets of more films that are adaptable and that make sense for the youth demographic just based on what they are -- including such things as 'The Departed' that Martin Scorsese did such an amazing job with, which was a Hong Kong film (the 2002 thriller 'Infernal Affairs'). We are doing a lot of that kind of stuff -- some on a smaller level, some on a larger level, meaning some of them are going to be key thrillers that did very well along the lines of (the 1998 thriller) 'Ringu,' which became 'The Ring' here, and then they did the same thing with 'The Grudge.'
"So we're looking for product that we feel has translated very specifically from their youth demographic to ours. And also on a technological basis, we're expanding in the areas of webisodes and short-form content for cell phones. As you know, Christine has been ahead of that curve for several years. We feel the Asian markets are about two to three years ahead of us in what they're using and putting out on their phones because they have a higher quality and ability to do that just because of the technology they possess. We see it as a kind of still undiscovered country."
Along these lines, earlier this week CP announced its acquisition of remake rights to the hit Thai horror film franchise 'Art of the Devil,' which Cerenzie and Peters will produce with Convergence Entertainment heads Eric Thompson and Tim Kwok.
Focusing on the idea of IPs, Cerenzie observed, "What typically happens right now is when a studio wants a piece of Manga or a graphic novel to purchase for one of their A-List directors or producers they go to the normal sources and pay that and then go make that movie. They might end up paying $2 million to $3 million to get the rights to pick up that graphic novel. What we're doing is cultivating these companies that are smaller so that in the next three to four years, for instance, there might be a toy that we have brought along and developed, which the kids are now playing that's still not here in the United States and is the next 'Transformers.' We're looking at this as a very long run play. This is not something we feel will happen overnight even though a lot of the remakes will happen very much quicker and a lot of the existing graphic novels and comic books will be developed aggressively with an eye towards progress to production.
"We're looking at this as building new and exciting content through the audience -- no different than Christine did originally with 'Area 51' and its sequel 'BlackSite: Area 51' here at Paramount, which was a Midway game. We hired the world-renowned graphic novelist Grant Morrison so that we were in tune not only with the youth that are playing the game, but also with the huge fan base that he brings to the table. 'Joust' was an IP that hadn't been doing anything because it was a 1982 coin operated video game based on medieval knights jousting on ostriches. What we did on that IP is make a deal with Midway. We optioned the rights to the title 'Joust' but our idea was to totally recreate the game. The idea is taking a piece of the IP and the title and recreating a whole new concept to the film, which we're probably going to title 'Joust 3000' -- which is to say 'Joust of the Future.' So you're not on flying ostriches and you're not on medieval knights. You're basically working from the point of view of a very close but futuristic world that is dealing with a gladiator type concept."
People who grew up on that arcade game, he explained, "are my age or older. If you were to talk about that with a 16-year-old or a 20-year-old or a 25-year-old, they wouldn't even know what you're talking about when it comes to that IP. What we're doing is kind of reinvigorating that idea, recreating the IP much like they did with 'Transformers' where you had a toy that was basically a shape-shifter. The movie, in one line, is about a boy and his car -- and it made over $700 million dollars worldwide! So it's the same idea that we're doing. We're taking an IP that maybe people would look at and would think is a dead IP even though we don't feel it is at all and neither does Midway. We're saying, 'Let's recreate this IP, make it into a major motion picture tentpole production and then go back and recreate the game from the reverse position, creating a game that people today would identify with. So the ancillaries are being built into everything that we do. Not only are we making films from these things or spinning off graphic novels or video games, but there's also a lot of merchandising and licensing that we're going to build through this global company.
"If you look at companies like Marvel that's where a lot of their income comes from -- the licensing and merchandising of these characters that they've created. We're kind of 'hybrid-ing' part of the Marvel concept of licensing and merchandising and the fact that they went out and raised a half-billion dollars to produce films like 'Iron Man'-- which they financed a hundred percent and the studio, Paramount, distributes the movie. And that's a great mix for both entities."
In addition, he pointed out, "Christine and I have gone heavily into the book market. Christine had huge success, as you know, with 'How to Lose a Guy,' which was a stick-figure book (the 2003 romantic comedy blockbuster was based on the book by Michele Alexander and Jeannie Long). I mean, a stick-figure book? Who would have looked at that as an IP? How do you make that into a movie? The combination of the way Christine thinks and her experience in the studio system and mine in the independent system connects us because we both look at these things the same way. She's also set up 'The Friday Night Knitting Club' with Julia Roberts at Universal, which we're doing.
"Presently, we're out with a Pulitzer Prize winning novel called 'Black Mass,' which is an amazing novel written by Dick Lehr and Gerard O'Neill, two reporters who worked for the Boston Globe for 26 years. It's the true story of Whitey Bulger, who was the biggest Irish mobster and ran South Boston. And his brother, Billy, oddly enough, was a state senator in Massachusetts for a very, very long time. It's about the two brothers and like a Cain and Abel story about how they went their separate ways and became successful in different ways. Their neighborhood childhood friend John Connelly was an FBI agent sent in by J. Edgar Hoover to turn Whitey against the Italian mob and use him as an informant. They used the Irish mob to take out the Italian mob and by so doing they created the witness protection program as we know it today. And basically it turned out that the Irish mob and Whitey ended up controlling a lot of the FBI. The larger theme is the creation of what we look at as our witness protection program and the flaws that came with that through the Hoover era. It's a very interesting book."
Another literary property CP's working on, Cerenzie said, "is an amazing book called 'Vesco' that was written by Arthur Herzog based on the life of Robert Vesco. It's another true story, the only authorized autobiography that he ever gave. He was basically a white-collar criminal as well as a bit of a thuggish character who stole hundreds of millions of dollars and was involved with everyone from Richard Nixon to Donald Nixon to Howard Hughes to the Romanovs and finally had to flee the country and took haven (in Cuba) with Fidel and Raoul Castro and is still living there today under Raoul's protection. It's kind of like a combination of 'Wall Street' meets 'Scarface.'"
Filmmaker flashbacks: From Feb. 4, 1991's column: "Recent reports of Disney Studios chairman Jeffrey Katzenberg's memo advocating the end of mega-budget pictures have focused renewed attention on one of Hollywood's biggest issues.
"In his memo, which has been keeping fax lines around town busy, Katzenberg wrote that at Disney, 'we should now look long and hard at the blockbuster business and get out of it.' Having focused here for years on the high profitability of low or moderately budgeted films … I'm the first to agree that big is not necessarily better. And I share his belief that smaller pictures with 'breakthrough potential' are a better bet today than films with supposedly bankable stars who trigger mega-dollar budgets but in the end deliver very little at the boxoffice. …
"Studios are busy setting co-financing deals with foreign investors to make specific films. Such arrangements make sense because studios can produce such tentpole films at half the price. Instead of being on the hook for, say, $35 million, a distributor is looking at a $17.5 million negative pick-up commitment that's well below today's $23 million average studio production cost. Many such deals also provide for sharing marketing costs on a 50-50 basis, greatly reducing another high-risk area. …"
Martin Grove hosts movie coverage on the broadband television channel www.UpdateHollywood.com.