How Avi Lerner's 'Expendables' Gamble Paid Off

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Israel Film Festival executive director Meir Fenigstein had many good reasons for choosing Avi Lerner as the recipient of this year's Lifetime Achievement Award, not the least of which is the 285 films the Nu Image/Millennium Films co-chairman has produced over the past two decades, including this year's critical hit Solitary Man, starring Michael Douglas, and Sylvester Stallone's retro all-star action blockbuster The Expendables. But it's safe to say it also had a lot to do with a day he visited him at the Beverly Hills headquarters of Nu Image/Millennium in spring 2008.

When Fenigstein poked his head into Lerner's office, the prolific producer welcomed him warmly and invited him to sit across him at his desk, just as he always did. But Fenigstein was nervous. Lerner had helped the festival out many times over the years, writing checks and making phone calls, but this time Fenigstein had a big favor to ask: Could Lerner spare $150,000 to underwrite the fest's awards gala at the Beverly Hilton celebrating Israel's 60th anniversary? Before he could broach the subject, Lerner paused the conversation to take a call.

"I think it was something to do with a celebrity that left in the middle of production and the agent didn't call him to tell him what happened for two days or something," Fenigstein recalls. "He was furious, and I didn't know if I should leave the office or continue to stay there. The conversation is not really fun, you know? And then he puts down the phone and suddenly smiles at me, and it's like I'm in shock. Suddenly, you're nice? I didn't know how to take it. He says, 'So what do you need?' "

Fenigstein told him. Lerner said, "OK." He just had to call Saban Entertainment chief Haim Saban and see if he was interested in sharing the costs.

"So he made the phone call," Fenigstein says. "I waited outside. Ten minutes later, he comes out and says, 'You're set. I took care of it.' It was amazing. I wanted to scream."

Screaming is not an unusual occurrence at the Nu Image/Millennium offices, nor is a guest being treated to a courtside view of a tense negotiation. In the increasingly corporate world of show business, where executives parse every syllable, paranoid that a wrong word will derail their career or send the stock price plummeting, the tousle-haired Lerner is an anomaly who isn't afraid to let it all hang out, whether the person present is a friend, a business associate or a member of the press.

[pullquote] "That's the way he operates," says Trevor Short, CFO of Nu Image/Millennium. "There's nothing under the counter or secretive. You don't have to even be in his office. People who are waiting in the reception area usually have a detailed view of the negotiation with an agent about an actor, because there's screaming and shouting going on at the top of the voice."

Back in the 1990s, when Nu Image was churning out low-budget actions films with titles like Cyborg Cop and American Ninja 4: Annihilation, few would have picked Lerner as a film festival honoree. But, in recent years, the company has been producing an increasing number of intimate, artier films with big name talent -- including 2009's Brooklyn's Finest, starring Richard Gere and Ethan Hawke, Leaves of Grass, with Ed Norton and The Bad Lieutenant: Port of Call New Orleans, starring Nicolas Cage, and the recently released Stone, starring Robert De Niro and Norton -- mining thematic and budgetary territory big studios have all but abandoned in their perennial pursuit of the next blockbuster franchise.

"Honestly, the studios don't know how to make these films," Lerner says. "In other words, they'll make a movie like Brooklyn's Finest and do it for $50 million-$60 million. We did it for under $20 million. Solitary Man, we made for under $10 million. If you do it with a studio, it would cost them $30 million. We will tell the actors, 'Hey, we can't get you $10 million or $5 million or whatever. For us, you have to do it for no money or very little money.' If the movie is successful, they'll get a part of it [on the back end]. It's a very simple formula."

[pagebreak] Lerner's greatest success has been The Expendables, which became the studio's first film to earn more than $100 million domestically on its way to a worldwide gross of $250 million. But, while the film's budget relied on their traditional mix of foreign presales, tax credits and other forms of other people's money, it departed from the formula in a very significant way.

"[He] went into a whole different way of financing, which is personal," laughs Stallone, who wrote, directed and starred in both The Expendables and the 2008 sequel Rambo for Lerner. To cover a gap in the film's $82 million budget, Lerner dipped into his own pocket "big time," Stallone says. "I think they were very happy with staying in the confines of what has worked for them." Now, Lerner will have to grapple with "the desire to do better and better and top oneself," he says. "Once you've been to Paris, it's tough to go back to the farm."

It's been a long road for Lerner. Born in 1942 in the city of Haifa in what is now Israel, he began his film career as manager of the country's first drive-in theater. From there, he bought a chain of movie theaters and a video distribution company and became a partner in the nation's largest theatrical distribution company. After serving as executive producer on the remake of King Solomon's Mines (1985) and its sequel, Allan Quartermain and the Lost City of Gold (1986), he sold his Israeli interests and relocated to Johannesburg, South Africa, where he founded the Nu Metro Entertainment Group, which owned and operated theaters, distributed videos and produced more than 60 films. Relocating to the U.S., he teamed with Danny Dimbort and Short to found Nu Image in 1991.

In recent years, the company has consistently produced roughly of a dozen films annually, including several with budgets upward of $50 million, such as 16 Blocks, starring Bruce Willis, and The Black Dahlia, both from 2006. And while more prominent filmmakers (i.e. Steven Spielberg and Jeffrey Katzenberg) have seen their dreams of building brick and mortar studios die on the vine, Lerner and company have two -- one in Bulgaria (the formerly state-owned Boyana Film Studios), with 15 soundstages, and one in Shreveport, La., scheduled to open in January. They also have an ambitious slate of films lined up for next year, including Drive Angry 3D, starring Cage, Trespass, starring Cage and Nicole Kidman, a remake of the 1972 Charles Bronson actioner The Mechanic, starring Jason Statham, a reboot of Conan starring Jason Momoa and a planned Expendables sequel to be written by Stallone.

None of them are likely to win Lerner an Oscar, but he professes not to care about them ("I don't believe in Oscar," he says bluntly), art or anything but the bottom line, for that matter. But Richard Donner, who directed 16 Blocks, thinks the producer doth protest too much. He remembers the look on Lerner's face when he saw the high scores on the preview cards after a test screening of the film in Orange County.

"He got tears his eyes and he called his mother in Israel and told her how happy he was that he finally had a picture that scored well," Donner remembers. "He cares about art. I don't give a [damn] what he says."