This story first appeared in the June 27 issue of The Hollywood Reporter magazine.
Richard Linklater‘s new film Boyhood might jump-start a rare phenomenon in Hollywood: the director as owner.
When Linklater’s longtime lawyer, John Sloss, structured the contract for the experimental coming-of-age drama — Boyhood was made over 12 years for a modest $5 million and is set to open July 11 — he insisted that financier IFC Films give the helmer part ownership of the movie’s copyright. Unlike a typical deal that offers a percentage of profits — or “points” — so a director shares in the success but has no control over the movie’s future, Linklater’s pact gave him a say in where and how the film is released. Working together, IFC the financier and Linklater decided that IFC’s distribution arm was their best option.
“This has been such a unique process and a complete leap of faith for all parties involved,” Linklater tells THR. As an owner, he can join in marketing decisions, touch each part of the revenue stream and eventually sell his stake to a library (by contrast, many directors still are paid for home video on a “royalties” basis that is much lower than theatrical gross). Sloss won’t reveal details but says Linklater’s ownership is substantial.
Still, it came at a price. The 53-year-old auteur had to give up a big part of his upfront fee, normally in the low-seven figures. And that’s precisely why most directors haven’t taken this route. They stick to Hollywood’s oldest adage: Take the money and run.
“There has been an inherent distrust of Hollywood accounting,” says Sloss, a partner in Cinetic Media and a Boyhood producer. “Historically, you took what you could upfront and were happy with it.” But Sloss says industry accounting has become more transparent in recent years thanks to all the studio co-financing and slate financing deals. Directors like Linklater slowly are starting to realize they might not get screwed if they become an owner.
Indeed, Mel Gibson made hundreds of millions of dollars from his self-financed The Passion of the Christ. And Steven Soderbergh split the $6.5 million budget of Magic Mike with star-producer Channing Tatum, landing them tens of millions. George Lucas became a billionaire by taking a smaller fee on the original Star Wars and keeping ownership of merchandising, licensing and sequels.
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“When talent invests his or her time and reputation but doesn’t receive a full fee, they are effectively co-investors in that film,” says attorney Peter Nelson, who represents directors Peter Jackson and Edgar Wright. “That gives talent the justification to negotiate either for a quick return and interest on their investment or, under unusual circumstances, co-ownership in the copyright of the film.”
But few directors are willing to put up their own money or invest years of time and effort without guaranteed compensation. Top-grossers James Cameron, Michael Bay and Christopher Nolan aren’t stakeholders in their films.
Then there are director-producers who have backed others’ features. John Singleton made several million dollars from Hustle & Flow (directed by neophyte Craig Brewer). Lucas most recently financed the World War II-set Red Tails, helmed by Anthony Hemingway. Jackson is an owner of District 9, which he financed and produced, but he never has enjoyed that status on a film he directed, including the Hobbit trilogy. “Copyrights and owning a negative are assets. And just like real estate, if you can accumulate enough assets, you will have some real value,” says producer Steve Stabler, who together with Brad Krevoy sold a library of 65 films that included Dumb & Dumber for $32.5 million in 1996. In recent years, library values have skyrocketed. In 2010, investment firm Colony bought the Miramax library of films for $663 million.
Both Linklater (Before Sunrise, Dazed and Confused) and IFC Films took a risk when they committed to Boyhood in 2002. It tracks the same actor (Ellar Coltrane) from age 6 to 18 alongside his sister (played by Linklater’s daughter, Lorelei). Ethan Hawke and Patricia Arquette star as the boy’s parents. “I walked into finance meetings and budget meetings over these past 12 years, and people looked at me like I had three heads,” says Sundance Selects/IFC Films president Jonathan Sehring.
Now, buoyed by stellar reviews at Sundance, Boyhood will receive an aggressive platform release, starting in New York and Los Angeles. Sloss insists ownership is the wave of the future and says he is beginning to negotiate stakes for other directors, though he won’t name them. “When studios began taking on co-financiers about 15 years ago, they had to open the kimono a little more,” he says. “As people become better educated [regarding] the revenue streams, creators are going to take greater ownership over their content.”
Others are skeptical, though. “I’m not sure director ownership is a trend,” says indie producing veteran Anthony Bregman (Begin Again, Foxcatcher). “Maybe it’s a trend for Richard Linklater.”