First Look's Winterstern resigns posts
EmptyFirst Look Studios president, CEO and co-chairman Henry Winterstern resigned his posts after a meeting late last week with the company's board of directors.
"From the very beginning, it was always my intention to build the company but not run it," said Winterstern, who merged his Capital Entertainment Group with First Look Pictures in July 2005 to form FLS. He will remain its largest individual shareholder, reacquire Capital, take on an advisory role and set up a FLS production deal. "I was always trying to find the right guy to run things, or the right girl, but that was very difficult in Hollywood," he said. "We're now ready to get a proper operator."
According to sources inside the company, Winsterstern's resignation also resulted from the fact that he wanted more theatrical production, while his fellow board members wanted more of a focus on distribution and the company's video division. "We've had these debates for two years," Winterstern said. "Some board members were more interested in just distribution, but I'm a big believer you can't have one without the other, and you need a pipeline."
There also was internal concern over spending, including the company's move last month to lavish offices inside the new CAA building in Century City in the face of poor boxoffice returns from such theatrical features as "The Dead Girl," "A Guide to Recognizing Your Saints" and "Wassup Rockers." Winterstern said this was "absolutely not true. If you look at the numbers behind the space, it was a well-negotiated deal," though he could not provide specific figures.
Winterstern said that because of his expansion of FLS — including his purchase of Blockbuster production, acquisition and distribution arm DEJ Prods. for $25 million, video distributor Ventura Distribution for about $20 million and TV syndication packages from Pinnacle Entertainment — the resulting 140 employees justified the new space. He also pointed to a jump in First Look revenue, from $29 million in 2004 to $49 million in 2005 and $37.5 million in first-half 2006.
No news of an executive replacement was immediately available, but Winterstern said it "might happen through a merger or just hiring someone." Both he and a spokesperson said an announcement can be expected in the next few weeks.
The First Look board, composed of members Chris Cooney, Mitch Goldstein and Chas Phillips, accepted Winterstern's resignation effective Friday during a Thursday meeting in New York. It is now finalizing details on Capital's production deal. In addition to its advisory role with First Look, Capital also will consult with other media companies and investment organizations.
Winterstern's departure comes as the company was said to be in talks with Avi Lerner's Nu Image/Millennium Films to merge their extensive film libraries, and a source within the company said a deal might still happen. Winterstern, who said he is "very close with Avi, someone I have a lot of respect for," declined comment on the status of the talks. First Look picked up all North American rights to Nu Image's "King of California" for nearly $3 million at January's Sundance Film Festival.
"At this stage, there's not going to be a deal. When we heard that we were going to have a deal with them, we laughed," said Lerner, who added that he has been talking with several companies about the sale of his nearly 300-title slate. Still, Lerner said the door still could be open to First Look and that an arrangement might be signed within the next few days or weeks.
The future of several First Look executives also could be up in the air now. When Winterstern merged his Capital with First Look, he created several new divisions and hired top industry veterans to shepherd each launch. Former Paramount Classics co-president Ruth Vitale came aboard to run U.S. theatrical producer and distributor First Look Pictures, and Miramax International head Stuart Ford joined the company to found overseas sales arm First Look International. The other new divisions Winterstern created were First Look Television, domestic home video distributor First Look Home Entertainment and branded entertainment arm First Look Media.
"Henry Winterstern played a leading role in transforming First Look into an independent, fully-integrated entertainment studio," the board members said Friday evening in a statement. "His broad understanding of the industry and his demonstrated skill as a dealmaker and strategist will serve the future clients of Capital Entertainment well, and we are pleased that he will continue to be a resource to First Look."
It's unclear whether the change will affect Winterstern and Vitale's previously announced goal to release eight to 10 features a year and produce half of them. The theatrical division is now banking heavily on its recent acquisition of its first animated feature, a big-screen version of the Cartoon Network's "Aqua Teen Hunger Force," which hits theaters in the spring. Other titles in the pipeline are two recent Sundance debuts: Tommy O'Haver's fact-based thriller "An American Crime" and Gregg Araki's comedy "Smiley Face."
FLS secured an $80 million credit line from Merrill Lynch last year and now has a library of more than 700 features and 1,800 specialty titles. Winterstern would not elaborate on the timing of his departure except to say that it had been in the planning stages since he began, discussed with the board for months and in line with his investment banking background building up companies. He was an acquisitions partner with Canadian pension fund manager Caisse de Depot et de Placement's Capital Communications and Goldman Sachs' Whitehall Street Fund and now serves as chairman of the board at Wet Seal.
"In this business, crazy things can happen," he said.