Monday, 17 May 2010

Hollywood Babble On & On #512: No Miracle At Morgan Creek

Welcome to the show folks...

Ya gotta love Nikki Finke, she calls'em as she sees'em, and when she sees producer James G. Robinson she doesn't like what she sees, and he probably doesn't like what she calls him.

Her dander is up over Robinson's arrival at the Cannes Film Festival to shill his next movie, starring Keanu Reeves, while 3 major guilds, Screen Actors (SAG), Directors (DGA), and Writers (WGA) launch a joint investigation into his mini-studio Morgan Creek for unpaid royalties and residuals.

Here's what I think:

1 pissed off guild could possibly be explained as a misunderstanding.

2 pissed off guilds could possibly be explained as incompetence.

3 pissed off guilds can only be explained as a sign that your company is going to crash and burn. (But not the only one)

When you're a movie producer you are bound to make enemies, it's inevitable. However, turning the three biggest guilds in the industry into those enemies is a sign that
you Mr. Producer are the problem.

If the guilds find evidence of chicanery on the part of Morgan Creek, the company is looking at a whopping 18% penalty for failure to pay the money owed. That's harsh, and if the guilds are using a decent forensic accountant, they
will find something to nail Morgan Creek to the wall with. Even if you're clean, the rules of accounting, especially in Hollywood, are so Byzantine, arcane, and convoluted, that even the most honest businessman probably commits three felonies on a daily basis without even knowing it.

That's why you have to not only be clean when you're an independent producer, you have to
appear to be clean at all times. That means that bills must be paid, on time, and as in full as you can possibly do. The reason is because if you don't, you're going down, and going down hard. That's why I include the involvement of unions in my 8 Stages of Corporate Grief. (A must read if you want to see how a company collapses.)

You give the unions an excuse to go after you, that's seen as a sign of weakness, and wrongdoing, there's blood in the water, and the sharks (and by that I mean lawyers) will start swimming in. Next thing you know you're getting sued every which way but loose by everyone you've ever done business with, then the IRS and the SEC start sniffing around, and then you're royally screwed.

Now I said that having the top 3 guilds on your tail is not the only sign you're going down, and it isn't. Check out the Morgan Creek filmography, when the company first started, it was literally everywhere. In the company's golden age its then distributor 20th Century Fox couldn't fart without releasing a Morgan Creek production. Yet in the last 10 years the numbers of productions per year have been shrinking. Morgan Creek's films are now more famous for Robinson scolding starlets, as he did with Lindsay Lohan, or making the same movie twice because of a personal pissing match with the film's original director as in the Exorcist prequel than actually getting bums in theater seats.

This could be attributed to bad luck at the box office, but it can also be attributed to simple frustration. A filmmaker with the slightest amount of commercial cachet is not going to waste their precious time dealing with a company that has a reputation for being bad to do business with whether that reputation is deserved or not.

This leads to a downturn in quality, a downturn in returns, a downturn in production, and ultimately the downturn of the whole company.

Can Morgan Creek be saved?

Unlikely. To do that you would have to transform the image of the entire company into one where accusations of unpaid bills get laughed off as sour grapes from cranks instead of evidence of bad business. At this stage, it would take a miracle at Morgan Creek.

However, it does have the potential to get very ugly very quickly.

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