'Blade Runner' Sequel a Make-Or-Break Moment for Producer Alcon
Producers Broderick Johnson and Andrew Kosove — who met at Princeton University before convincing FexEx founder Fred Smith to help them launch the film company Alcon Entertainment 20 years ago — are candid. They admit that Alcon's future depends on Blade Runner 2049, the sequel to Ridley Scott's sci-fi epic that hits theaters Oct. 6. "This is a chips-in-the-center-of-the-table exercise," says Kosove.
After a string of box-office wins — most notably, The Blind Side in 2009 — Kosove, 47, and Johnson, 50, arrived at a moment of reckoning. Alcon, with a staff of 45, no longer wanted to subsist solely on smaller, one-off movies, however successful (Alcon's past slate includes Insomnia, P.S. I Love You, Sisterhood of the Traveling Pants, Dolphin Tale and Prisoners). The company, which has a long-term distribution deal with Warner Bros., needed to be in the tentpole franchise business.
This Week In Heat Vision breakdown
"We were sitting on a substantial balance sheet," adds Kosove. "Normally, we would have refinanced the business and taken the shareholder money off the table. We would then make new movies with other people's money. But the high-water mark coincided with the financial crisis. The capital markets were tied up. We had two options — go home or take the company to the next level." That meant bigger but riskier bets. "If you don't have repetitive cash flow, which is a fancy way of saying being in the sequel business, you are going to be in trouble eventually."
Alcon missed its first target — a $100 million redo of Point Break. The 2015 remake earned just $28.8 million domestically and $133.7 million globally. Alcon sold off international rights, mitigating losses, but it was a disastrous experience.
"Point Break was fundamentally rejected. If we had decided to do a sequel, it would have been perceived differently," says Johnson. Adds Kosove, "Most people who have a degree of success say they were more shaped by their failures than their successes. We learned a lot of lessons from Point Break. I never want to be involved in a remake again. We were pure of heart, but we offended a lot of people."
Remaking Blade Runner was never an option, since the remake rights weren't available. Instead, Kosove and Johnson bought all other rights to the property from the late Bud Yorkin and Cynthia Sikes Yorkin, including sequel rights. Next, they put together an impressive team to make the movie, including enlisting the guidance of Scott and hiring Villeneuve, who helmed Prisoners, to direct. Ryan Gosling was cast in the lead role, followed by the announcement that Harrison Ford would reprise the role of Rick Deckard.
Blade Runner 2049 cost a net $150 million to make, and was co-financed by Alcon and Sony (each committed to spend $90 million before rebates and tax incentives brought down the budget). Alcon owns the film; Sony will release it overseas and get a slice of the profits. Warners is handling the film domestically and will get a fee per its deal with Alcon. "We're confident Alcon has delivered another hit," Warner Bros. chairman-CEO Kevin Tsujihara says in a statement. Insiders say the movie will need to clear $400 million at the worldwide box office to be considered a win.
Adds Sony Pictures Motion Picture Group chairman Tom Rothman, "we feel honored and lucky as hell to collaborate with Alcon, Ridley, Denis and all the exceptional talent involved in this long-awaited new chapter in the Blade Runner story to the big screen, where it belongs."
Kosove, Johnson and Smith, who put up the initial investment, remain Alcon's only shareholders, meaning unlike many other film financing companies, they don't have to answer to numerous investors. Alcon has a 32-title library that has generated more than $2 billion in revenue.
Alcon has also diversified into television — including Syfy series The Expanse — music and talent management, while its interactive and merchandising units will rely on Blade Runner 2049 to build their portfolios.
Is it a winning strategy? Says Johnson: "If it works, it transforms what we do."
A version of this story first appeared in the Sept. 27 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
by Graeme McMillan
by Richard Newby
by Pamela McClintock