In an escalating battle, the Overture executives demanded $50 million to take two movies wide; Albrecht said no
Rising tension over the lack of funding to release Overture movies led to a dramatic head-to-head between the chief executives of Overture Chris McGurk and Danny Rosett and Chris Albrecht from their parent company, Starz, ending in the Overture executives' resignations Thursday, WaxWord has learned.
With Overture for sale since February and its ability to produce or acquire movies frozen since then, McGurk and Rosett had been in limbo for months, waiting for a buyer or to be shut down.
Instead, nothing clear has happened in that time.
The two executives had been trying to find financial backers to buy the company with them. There have been numerous bids since April, but John Malone – who owns Liberty, the parent company – has not responded. (Malone pictured below right.)
So the two frustrated indie heads brought matters to a head.
According to two knowledgeable individuals, McGurk and Rosett had two tension-filled meetings with Albrecht this week, all around the question of whether Starz would provide enough money to release the three remaining films on Overture's schedule this fall.
The movies are "Jack Goes Boating," starring Philip Seymour Hoffman; “Stone,” starring Robert De Niro; and “Let Me In,” a remake of a Swedish horror film starring Richard Jenkins.
In frustration, McGurk and Rosett sent a memo to Albrecht (below left) on Thursday demanding that the studio commit to a wide release of at least two of the movies, requiring a capital commitment of about $50 million.
They told Starz that they needed a clear response as to whether the parent company would provide the funding, since the movies were scheduled for release this fall.
An acrimonious phone call ensued between Albrecht and the two executives – presumably with Albrecht declining to commit — leading to an emailed resignation.
That leaves marketing chief Peter Adee as more or less the only senior executive left in the movie company.
While the drama played out between McGurk, Rosett and Albrecht, the true power behind the scenes is Liberty Media owner John Malone. Malone, a notoriously hard-to-read mogul, by all accounts grew disillusioned with the subsidiary Starz Media, which includes Overture, the Anchor Bay Entertainment video company and two animation companies after three years of unprofitable movies.
The studio has had a few profitable films – “Law Abiding Citizen” with Jamie Foxx, and a second-rate Robert DeNiro thriller, “Righteous Kill” ($77 million worldwide) — but most of its 15 releases have had disappointing box office results, like “Last Chance Harvey” ($14 million domestically) with Dustin Hoffman.
Most disappointing perhaps was the Michael Moore documentary, “Capitalism: A Love Story,” which won some critical support but failed to to find a wide audience or get traction for the Oscars. (Though “The Men Who Stare at Goats” has had some success, taking in $32 millon domestically.)
In a change of direction, Malone hired Albrecht, the HBO veteran executive, to take the helm.
Even before Albrecht’s arrival in January, however, the cable channel had taken a strategic move away from being a premium movie outlet to launching original programming, including “Crash” and “Spartacus.”
The idea behind Overture seemed to make more sense when the company launched in 2006. Starz provided the critical distribution outlets of cable and pay per view to support the more risky business of distributing independent film.
The company was capitalized at $300 million, with a mandate to make or acquire 8 to 12 movies a year, with budgets under $25 million.
Overture movies took in $105 million in 2008, and $160 million in 2009.
Buyers have circled the studio, which would need about $250 million to operate for the next 18 months.
But in that time, the independent movie business has taken a nosedive. And one independent company after another has bitten the dust. Just Wednesday, Bill Pohlad's Apparition laid off most of its employees, and announced its attempt to "restructure." The Weinstein Company appears to have won a new lease on life with the elimination of $450 million in debt last week, even as Disney continues to try and sell Miramax, reduced to a library.
It is not clear whether Malone is even prepared to sell Overture. "There is a high probability that he won't sell," said one executive close to the company.
Chris Albrecht, president and chief executive officer of Starz, LLC, announced that Overture Films executives, Chris McGurk and Danny Rosett, tendered their resignations today due to differences over the strategic direction of the company.
“I want to thank Chris and Danny for their dedication and hard work in building the studio from the ground up, and wish them well in their future business endeavors,” said Albrecht.
Founded in November 2006, Overture Films is a wholly owned subsidiary of Starz, LLC, which is a unit of Liberty Media Corp. and which also operates the Starz Entertainment premium television business and the Starz Media production and distribution company.