Lionsgate Chiefs on ‘Divergent’ Box Office, Marketing Cuts and Cannes Memories (Q&A)

This story first appeared in the May 16 issue of The Hollywood Reporter magazine.

Patrick Wachsberger stood behind Rob Friedman on a recent afternoon and gave his partner’s shock of white hair a good tussle. Finally, Friedman swatted the playful Frenchman away. They are one of Hollywood’s unlikeliest couples (they finish each other’s sentences), a union that has helped grow Lionsgate into the world’s leading independent film studio. In January 2012, Lionsgate bought Wachsberger and Friedman’s Summit Entertainment — home of the Twilight franchise — for $412.5 million. Since then, Lionsgate’s stock price has more than tripled, from $8.47 to roughly $26, in part because of the Summit deal.

Today, Friedman, 64, and Wachsberger, 62, are co-chairmen of the Lionsgate Motion Picture Group, with purview over all film operations, including the Summit label, overseeing 350 employees. Revenue for the group reached $2.33 billion in 2013, a 96 percent jump from the previous year and fueled by the final Twilight film, the first Hunger Games and The Expendables 2. For the past two years, Lionsgate has eclipsed both 20th Century Fox and Paramount in domestic market share with more than $1 billion in revenue. And they’ve got the sequel to 2013’s surprise hit Now You See Me, Alex Proyas‘ Gods of Egypt and the two-part Hunger Games finale on the runway.

Friedman and Wachsberger come from wildly different backgrounds. Wachsberger, a veteran foreign sales agent who co-founded Summit in 1993, rose up through the international side of the business as a gifted salesman; Friedman, a marketing whiz, spent most of his career in the Hollywood studio system before leaving Paramount in 2005. In 2007, the two went into business together and optioned the rights to Twilight. Days before leaving for Cannes, the duo (Friedman is married with four kids; Wachsberger also is married, with two) invited THR to Lionsgate’s Santa Monica headquarters to reveal their festival plans — including a glamorous Hunger Games party and a worthy sales slate that includes The Last Face, directed by Sean Penn and starring Javier Bardem and Charlize Theron; and Denis Villeneuve‘s Sicario, starring Benicio Del Toro and Emily Blunt — and to discuss Divergent‘s box office, the exit of marketing chief Nancy Kirkpatrick and why Johnny Depp‘s recent flop Transcendence won’t hurt him.

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Is Cannes still important to you?

Wachsberger: It’s very important. Cannes is the temple of cinema.

Friedman: Whereas Toronto and Sundance present more acquisition opportunities for the U.S., Cannes is by far the premier sales festival. We divide and conquer with different agendas. My agenda is to meet with filmmakers and financiers, and with our distributors when they aren’t sitting down with Patrick.

What is your best Cannes story?

Wachsberger: Oh my God, I’ve been going for 30 years. I met Alfred Hitchcock in Cannes when he came in for Family Plot, and I was in Cannes for the premiere of Easy Rider. I bought Apocalypse Now for Belgium.

What was the Easy Rider party like?

Wachsberger: Wild. It was on the beach. There were very few parties outside then. Professionally, the highest moment was winning the Palme d’Or for Pelle the Conqueror (1988).

Friedman: Well, I don’t have as many lives as Fritz the Cat [Wachsberger]. I was at a big studio, so it was a much different kind of experience. My most fun Cannes stories are from my early days at Warner Bros. I first came to Cannes in 1973 as a publicist. I brought the last reel of The Last of Sheila. That was part of our 50th anniversary celebration. That is the time that I met Steve Ross. He was the big boss, but we became friends for the rest of his life.

Divergent has crossed $250 million globally, but that still is far less than the first Twilight ($393 million) or The Hunger Games ($691 million). Is that enough for a franchise?

Wachsberger: It’s fantastic. We have established a franchise, no question. You cannot use Twilight as a barometer every time. We broke the curse of the young adult films. I mean, $150 million domestically is not chopped liver. The book wasn’t so well established internationally. But when we started marketing the movie overseas, the book sales went through the roof, and the drop for the film from week-to-week has been very small.

Friedman: Divergent is digging in as a franchise, and so we’re very excited about it; not only its performance as the first film but from a real-life perspective and what we see as trajectory. The movie was released in a uniquely competitive environment.

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Will you market next year’s sequel, Insurgent, differently?

Friedman: It’s obviously a different story, and we don’t have to start from ground zero, explaining what Divergent is all about. The second film has a lot more action in it, so we’ll take it in a different direction.

Given the tepid reviews for the third book, Allegiant, why the decision to split it into two films?

Friedman: We obviously did it with Twilight, and we’ve done it with Hunger Games. One of the things we find in the last book is that a lot of ends have to be wrapped up. They tend to be very dense. We felt the same way about Allegiant. There was more than enough material there to make two substantial, satisfying films.

Johnny Depp stars in Mortdecai, about a bumbling secret agent, which opens Feb. 6. Are you worried that Transcendence marks his third bomb in a row?

Wachsberger: Mortdecai is a totally different movie. Johnny Depp creates [the] character Mortdecai, just like he created the character Jack Sparrow. I personally believe, and I think my partner does too, that this is the way people want to see Johnny Depp. Johnny Depp doing a normal, serious guy? Not so much fun. I think he’s created a character in Mortdecai you can basically turn into a franchise.

Friedman: I think there are 12 books.

Wachsberger: You can set up the story any way you want — Mortdecai goes to Hong Kong; Mortdecai goes to Rio de Janeiro.

Lionsgate was built on horror, namely, the Saw and Hostel franchises. But you have moved away from that a bit, correct?

Friedman: I just don’t think horror is a part of our film slate that we do very much.

Wachsberger: In other words, there are horror titles to acquire at markets and festivals, but in terms of us doing production, it has to be something very, very special.

Tyler Perry’s movies have been underperforming, and you ended your theatrical deal in February. Is your relationship over?

Friedman: No, we’re still in business with Tyler, we’re still doing his video distribution, we still have television, and we talk all the time about film opportunities. It’s just there was a specific part of an overall film deal, which funded the film production entity, that is over, but our relationship with Tyler is as strong as ever.

Lionsgate and Summit are merging their marketing divisions, Summit marketing chief Nancy Kirkpatrick is leaving, and Tim Palen now will oversee all marketing. Why now?

Friedman: Obviously, when you marry two companies that have as much output as Lionsgate and Summit, it was critical we made sure we had a smooth transition. Nancy and her crew knew at some point that there was going to be an integration. My relationship with Nancy goes back 30 years. She did a fantastic job.

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Did everyone know what was going to happen?

Friedman: It’s fair to say everybody knew that they were going to focus on what their jobs were, and that at some point, decisions had to be made.

Jeffrey Katzenberg recently proclaimed that the movie industry is a no-growth business. Do you agree?

Friedman: I won’t answer the Jeffrey question, but you can ask me a question about the business.

Is the movie business still a growth business?

Friedman: Yes. And I’ll tell you why. Domestic is still very robust. Any business that throws off $11 billion in theatrical revenue annually, give or take a few hundred million dollars, is a business I want to be in.

Wachsberger: And internationally, it’s growing.

For the second year in a row, you are planning to host a Hunger Games bash at Cannes. Why incur the big expense when Mockingjay: Part 1 isn’t actually playing at the festival?

Friedman: The good news is, everyone is in Europe already. We’re a worldwide company, and it’s a big opportunity for our international distributors to actually hear what the worldwide plans are for the film, which opens in November. Cannes is the best publicity opportunity from an international penetration perspective.

Will the Summit label remain intact?

Wachsberger: It stays. Just like France is a republic, it will always be a republic.