Hollywood rethinks use of A-list actors - Films are showing that a good concept trumps star power

Hollywood studios are now thinking twice about splurging on A-list movie stars and costly productions in reaction to the poor economy, but also because of the surprising success of recent films with unknown actors.

After buddy comedy "The Hangover," a movie with a little known cast, made $459 million at global box offices this past summer, several films have shown that a great concept or story can trump star appeal when it comes to luring fans.

"District 9," a low-budget movie in which the biggest stars were space aliens treated like refugees and the lead actor was South African Sharlto Copley, made $200 million. Thriller "Paranormal Activity," starring Katie Featherston and Micah Sloat, has cash registers ringing to the tune of $100 million.

Next up, on Nov. 20, comes Summit Entertainment's relatively low-budget ($50 million) franchise movie "The Twilight Saga: New Moon," a sequel to 2008 hit vampire romance "Twilight" which made global stars of Robert Pattinson and Kristen Stewart. Online ticket sellers report "New Moon" is one of their highest pre-sale movies of all time, and box office watchers expect the film to have a smash opening.

"Nobody says that a big wonderful movie needs to be expensive, it's just that that's been the trend, and perhaps the trend is misguided," said University of Southern California cinema professor Jason E. Squire.

Last weekend, comic actor Jim Carrey's "A Christmas Carol" became the latest celebrity-driven movie to stumble at box offices, opening to a lower-than-expected $30 million.

Aside from Jim Carrey and "Carol," which cost at least $175 million, A-listers who suffered box office flops recently have included Bruce Willis ("Surrogates"), Adam Sandler ("Funny People"), Will Ferrell ("Land of the Lost"), Eddie Murphy ("Imagine That") and Julia Roberts ("Duplicity").

"The (major movie) machine didn't fly last summer, if you look at the movies and the names, they were not star-driven movies, they really weren't," said Peter Guber, chairman of Mandalay Entertainment and former head of Sony Pictures.

Hollywood insiders say A-listers currently are having trouble with salary demands in the $15 million range or participation approaching 20% of gross profits -- deals that were once somewhat common for top talent. Instead, they are being asked to take less money upfront and greater compensation only if a film breaks even.

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MGM Headed for Sale

11/12/2009 - Variety Magazine

MGM may be the best known logo in the entertainment business, but the company seems headed for another possible garage sale.

Several sources say they expect that MGM will essentially be auctioned off within the next few weeks.

This would mean that a major, such as Time Warner, could buy the MGM-UA library while another entity might acquire the logo, and yet another deal could be made for United Artists. Sources speculated that Kirk Kerkorian, who has already bought and sold MGM twice, might buy the logo once again.

Last summer Harry Sloan was bounced as MGM's CEO and Stephen Cooper, a specialist in restructuring companies (Krispy Kreme was one of his projects) started meeting with bankers with the aim of restructuring some $3.7 billion in debt. There was speculation that the combined assets of MGM may now yield as little as $1.5 billion in the present market.

The various equity owners of MGM, including several private equity firms, have already written down their $5 billion acquisition, which closed in 2004.

MGM's library contains 4.000 titles, but some specialists in film libraries consider its list of titles to be geriatric.

Any sort of auction would need approval of a two-thirds majority of the bondholders, and a couple of the bondholders insist they have not been contacted as yet. Some sources believe a pre-packaged bankruptcy is still an option, and there is still an expectation that Time-Warner might make a last eleventh hour bid.

Neither Cooper nor MGM would comment.

MGM's released only a remake of "Fame" this year. For 2010, it's opening two comedies -- "Hot Tub Time Machine" in March and "The Zookeeper" in October -- and a remake of "Red Dawn" in November.