Fox Filmed Entertainment's frugality pays off

CEO says division's thriftiness helped avoid layoffs

Tom Rothman says less is more -- when it comes to movie star salaries.

The Fox Filmed Entertainment CEO said Thursday that his studio's frugality has helped Fox avoid the kind of layoffs some rivals have been forced to make in recent times. Addressing an analyst conference, Rothman acknowledged he's not a favorite among talent agents, who naturally seek maximum pay for their clients.

Rothman joked he needs to remind CAA that he doesn't actually work for them, but for Fox.

"We run a lean and mean shop," he said. "Avatar" notwithstanding.

Rothman spoke of two "Avatar" sequels, with the second and third installments coming closer together than the first two. He didn't give specific release dates.

Jessica Reif Cohen, the analyst hosting the presentation at the Bank of America Merrill Lynch Media, Communications & Entertainment Conference, said Fox earned a $350 million profit from "Avatar."

Rothman responded that the only bad thing about "Avatar" is, "I have to say 'difficult comparisons' as often as I say 'good morning.' " But he acknowledged that merchandise licensing -- which would bring in $150 million -- was tough, given that prospective partners couldn't imagine the appeal of 9-foot-tall blue people with tails.

For the sequels, Rothman expects much better licensing arrangements.

"The appetite for Pandora and all things blue is just unmatched," he said.

Rothman said "Avatar" is Fox's equivalent of "Harry Potter," choosing to compare it to a rival studio's franchise rather than its own "Star Wars," owing to the "errors of foresight" that gave George Lucas ancillary rights that, had a more thoughtful deal been struck 33 years ago, would have gone to the studio.

Rothman also chastised the media for on one hand dismissing 3D and on the other overhyping it, saying 3D done well is here to stay but should be done sparingly. Fox has three 3D titles coming up: "The Chronicles of Narnia: The Voyage of the Dawn Treader" (Dec. 10), "Gulliver's Travels" (Dec. 22) and "Rio" (April 8).

Some 3D is just "crap," Rothman said, though he was impressed with Disney's "Alice in Wonderland."

"The audience can tell the difference between 'Avatar' and 'Alice,' and 'Piranha 3D'," he said.

He also predicted there will be fewer big releases next year industrywide than there were this year. That's a good thing for studios like Fox that "are in it to win it," he said.

"There was simply too much product," he said, whereas fewer movies mean less competition for weekend openings and DVD shelf space.

He also predicted that 2011 will be a growth year for home entertainment when DVD sales are combined with digitally delivered product.
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