Movie Projector: 'Eagle Eye' eyes $30-million opening weekend

The summer popcorn movie season ended weeks ago. Or did it?

DreamWorks/Paramount’s “Eagle Eye,” a techno-thriller starring Shia LaBeouf, could reap the first opening-weekend gross above $30 million since early August, when “The Mummy: Curse of the Crystal Dragon Whatever” came out.

Domestic box-office revenue has been down for eight of the last nine weekends, but the PG-13-rated “Eagle Eye,” opening at 3,510 theaters including 86 Imax locations, might help Hollywood snap out of its funk.

Produced for a little over $80 million, the race-against-time thriller is pulling from all demographics in consumer tracking and figures to easily outsell today’s other major releases, “Nights in Rodanthe” and “Miracle at St. Anna.”

“Rodanthe,” as expected, is tracking well with women: In the Projector household, for example, 100% of females over 25 want to see it. Expect an opening in the $10-million vicinity. 

The R-rated “St. Anna,” however, has soft tracking, equally mixed reviews and a relatively small screen count, at 1,185 theaters, so a mid-single-digit launch looks likely.

Hollywood to Washington: Give us a break, too

Wall Street's getting help. U.S. manufacturers have gotten a hand. Now Hollywood would like a little love from Washington, too.

A coalition of unions and industry-backed groups are putting aside their differences in an effort to tackle the long-standing problem of runaway production, which has drained thousands of film jobs from the Southern California economy. Members of the unlikely alliance -- politics makes interesting bedfellows -- are pressing lawmakers for some tax breaks that they say will keep film and TV production in the U.S.

Included in a broad tax-extension bill on Tuesday was a provision that would allow film and TV producers to get the same tax deductions American manufacturers such as General Motors, Boeing and Xerox receive for making their products in the U.S.  Currently, the big Hollywood studios don't benefit from the provision because the deduction does not apply to short-term workers, who make up the bulk of a movie's payroll. The proposed change to the tax code would allow producers to deduct the wages paid to full-time as well as short-term workers for domestically produced films and TV shows.

"Our tax laws have helped push American film production abroad," said Sen. Dianne Feinstein (D-Calif.), who supported the measure, in a statement. "This legislation will help level the playing field."

Additionally, the tax package removes the budget cap on the existing tax credit, which was limited to movies that cost less than $15 million to make -- effectively excluding most studio films, which cost an average of $70.8 million, according to Hollywood's trade and lobbying arm, the Motion Picture Assn. of America. The change would allow producers to immediately deduct all production costs up to $15 million.

"We certainly believe a federal incentive will only complement all the state incentives we have in place to bring productions back to the U.S." said Pamm Fair, deputy national executive director for the Screen Actors Guild, which has joined the Directors Guild of America, other unions and industry groups including the Independent Film and Television Alliance in lobbying for improved tax credits.

The tax bill, which has been passed by the Senate, still needs to be approved by the House and signed by the president in order to become law. Given the current financial crisis, however, Hollywood may have to wait a little longer for the sweeteners.

-- Richard Verrier

Photo: Chip Somodevilla / Getty Images

Convicted file-sharer gets a new trial

The recording industry’s first major victory in its lawsuit campaign against file-sharing was called into question today over the meaning of the word “distribution.”

U.S. District Judge Michael J. Davis granted a new trial to single mother Jammie Thomas of Minnesota, convicted last October of copyright infringement and ordered to pay a whopping $222,000 to record labels for 24 songs she served up on file-sharing site Kazaa. (For those of you doing the math, that’s $9,250 a song, or the equivalent of 925 albums and a few spare tracks on iTunes.)

Thomas quickly appealed that ruling by claiming that the punishment was disproportionate to the crime. Indeed, the Recording Industry Assn. of America’s lawsuit campaign relies on confronting accused infringers with huge potential fines while angling for more reasonable settlements and for a deterrent effect on other would-be file-sharers. The RIAA has reportedly sued and settled with more than 30,000 people, but Thomas was the first infringer to go to trial.

But in May, Davis suggested that a new trial could be granted because of an error he made in jury instructions. In the original case, Davis told the jury that the Brainerd, Minn., resident could be liable for simply making the songs available on Kazaa — regardless of whether anyone actually downloaded them. 

Now, Davis has ruled that his instructions contradicted a 1993 ruling, which would have required the record labels to prove that somebody actually downloaded Thomas’ songs, without which Thomas couldn’t be said to have distributed the tracks.

Of course, whether the RIAA’s investigators, who downloaded the songs, count as that “somebody” remains to be seen.

“If we all left our CDs on the front lawn and no one ever took one, how is that a problem?” asks Fred von Lohmann, senior staff attorney with the Electronic Frontier Foundation, a digital rights advocacy group. “The recording industry now has to actually prove its case. They have to prove that distribution actually happened.”

RIAA spokesman Jonathan Lamy says that won't be a problem. “As with all our illegal downloading cases, we have evidence of actual distribution,” he wrote in an e-mail. 

And although his ruling’s relied on the jury instruction error, Davis also commented on the size of Thomas’ fine.

“[S]tatutory damages awards of hundreds of thousands of dollars is certainly far greater than necessary to accomplish Congress’ goal of deterrence,” Davis writes, calling it a “farce” that a single mother’s non-commercial infringement deserves the same level of punishment as a company seeking a profit from violations.

Still, Von Lohmann isn’t sure that this ruling alone will put a significant kink in the RIAA’s campaign. “I don’t think this will stall their campaign,” he says. “Settlements are driven by the fact that lawyers cost more than settling.”

— Swati Pandey

Photo: Julia Cheng/AP

Sumner Redstone's soggy CBS stock options

While the world was bracing Sunday to see how markets would react to the government's Wall Street bailout plan, at least one corporate board committee was looking ahead to sunnier days.

The Compensation Committee of the CBS Corp. board, in a rare Sunday meeting conducted by phone, paved the way for billionaire media mogul Sumner Redstone to become a bit wealthier by awarding him $6.85 million in stock options for his role as chairman of the old-line television and radio company.

The effective date of Redstone's CBS stock options was Monday, the day the markets welcomed the government's bailout plan by driving down the DJIA more than 372 points. CBS was not immune: Its stock sank to $15.39 per share. According to a filing CBS made with the Securities and Exchange Commission on Wednesday afternoon, that amount became the exercise price for Redstone to purchase 445,000 newly granted stock options. The options will vest in four equal installments in successive years beginning in September 2009.

And since Monday, CBS shares have dropped even further, closing Wednesday at a new low of $14.72 per share.  Redstone's new options, only three days old, are already underwater.

But Redstone, 85, is not one to bet against himself or his own companies. After all, he will be 89 when the final installment vests.  Redstone, as he is fond of saying, expects to live forever,  so that's not an issue. And if CBS shares bounce back (they were trading at nearly $32 a share a year ago) he will have made a handsome profit.

Still, it doesn't sit well with everyone. "There are a lot of questions for this company, such as what is the justification for such a huge option grant award, which dilutes the shares of everyone else who owns them?" said Dan Pedrotty, who monitors executive compensation issues as director of investment for the labor organization AFL-CIO. "And also, why now, when the stock is trading so low?"

CBS bumped those questions to Redstone's spokesman, Viacom Inc. executive Carl Folta. He points out that CBS restructured Redstone's compensation package last year to more closely tie it to shareholder value rather than salary and bonuses. Folta downplays the timing, saying CBS routinely decides its executive compensation in September. What's more, he says, CBS's compensation committee reviewed the matter during a regularly scheduled board meeting last week.

"The determination was made by an independent committee of the board," Folta said. "And this aligns Sumner's interest with that of the other shareholders." The matter was simply formalized on Sunday.

— Meg James

    Photo: Kevin Winter/Getty Images

Scene stealer: How 'Ghost Town' gained a mummy

In "Ghost Town," stars Ricky Gervais and Téa Leoni bond over the mummified remains of the Egyptian pharaoh Pepi II. But production designer Howard Cummings had no idea just how much of an undertaking creating that single mummy body would turn out to be. Cummings and prop master Vinny Mazzarella spent days scouring the Internet, collecting books and subscribing to Egyptology magazines to find information on mummies, particularly the body of Ramses II, who served as Pepi's model. They then had to have an authentic-looking body built from scratch, even though director David Koepp had just written the mummy-heavy "Indiana Jones and the Kingdom of the Crystal Skull." "I tried to go through their art department to find out who their mummy sources were," says Cummings, "but I didn't have much luck. I don't think Spielberg wanted us copying their mummy." The delivery of the resin-and-latex mummy, which ended up costing about $15,000 and had the texture of an old leather shoe, wasn't the end of their work. Cummings was also tasked with creating a 4 1/2 -minute lecture on the mummy, complete with a 50-photo slide show, for Leoni's character to deliver. "My crew was getting mad at me," Cummings says of the time-consuming research. "But the lecture had to make sense. I didn't realize how much the mummy wove through the story."

-- Patrick Kevin Day

It's raining catty and dogs at Disney movie showcase

Amid all the cinematic sizzle at Disney's movie showcase today at Hollywood's Kodak Theater, studio chief Dick Cook took the opportunity to grill some former colleagues.

"I want to introduce you to two old dogs," Cook deadpanned. "No, I'm not talking about Bob and Harvey Weinstein," he said in introducing clips from Disney's Thanksgiving release, "Old Dogs," starring Robin Williams and John Travolta.

Cook's reference to the Miramax Films co-founding brothers, who had a well-publicized falling-out with their corporate parent, Disney, was not lost on the insider crowd of about 2,000 industry executives, theater owners and journalists who are attending the all-day event to see the new lineup, which was heavy on the dog theme.

The diminutive live-action star of Disney's Oct. 3 release, "Beverly Hills Chihuahua," made a rare and unscripted appearance onstage, provoking a Taco Bell quip from Cook. Stealing the show, however, was Disney's top dog, "Bolt," the studio's first animation project entirely revamped and overseen by Pixar Animation Studio's power duo, John Lasseter and Ed Catmull.

Disney showed the film, featuring the voice talents of Miley Cyrus and John Travolta, for the first time in its entirety. The crowd, donning 3-D glasses, gave the movie a warm reception.

Speaking of 3-D -- the technology that some in Hollywood think will lure people away from their big-screen TVs and back into theaters -- Cook made reference to several filmmakers who were at its forefront, including James Cameron and Bob Zemekis. He took a swat at his former boss, Jeffrey Katzenberg, who now runs Disney Animation rival DreamWorks Animation.

"These industry leaders, AND Jeffrey Katzenberg," said Cook, have been pioneers in the field, and he remarked that he read somewhere that Katzenberg was planning to release his first 3-D movie sometime soon.

So far, Cook's presentation has been heavy on sizzle and light on the steak. The only news nuggets are that between now and the summer of 2011, when Disney releases "Cars 2," the studio will try to keep the popular Pixar characters in front of a new generation of budding gear-heads by releasing a series of animated shorts called -- wait for it -- Cars Toon.

--Claudia Eller and Dawn C. Chmielewski

Photo: Cook (Guatam Singh/AP); chihuahuas (Alberto E. Rodriguez/Getty Images)

Blockbuster sticks to the bricks

The instant gratification of video-on-demand and the novelty of movies by snail mail may get many a consumer more excited than an old-fashioned trip to the corner store, but for Blockbuster Inc., the store is still the thing.

The Dallas-based video rental and retail chain, which closed hundreds of stores over the last year, plans to revamp many of its remaining outlets, expand its movie and game offerings, and add more rental and download kiosks.

But it’s still keeping an eye toward increasing Internet-based downloads through Movielink, the digital movie site it acquired last year, and attracting more movie-thru-mail subscribers. Critics say stores are passé, but Blockbuster notes that its mail customers also have the convenience of returning or trading-in their mail-ordered movie at stores — something which Netflix can't do because it doesn't have brick-and-morter outlets (just in case an Ingmar Bergman flick showed up in the mail when you were more in the mood for "Sex and the City").

“Most people read a lot of interesting headlines, and we enjoy the headlines, about Netflix, Amazon, Apple, so forth,” says Tom Casey, Blockbuster’s chief financial officer, during a presentation at Thomas Weisel Partners’ Annual Consumer Conference on Tuesday. “But what you need to understand is we really have a market that we address that’s nearly $36 billion in size. Video-on-demand is actually pretty small.”

That $36-billion figure is the total market for DVD's and game sales — where Blockbuster has been expanding — and movie rentals. Blockbuster has a 40% share of the $9.6 billion movie rental business, of which in-store rentals account for more than half the total revenue, followed by mail subscription and video-on-demand, according to the company.

Blockbuster reported a loss of $44.7 million, or 23 cents a share, in the second quarter, ended June 30, compared to a $34.2 million loss in the same period last year. But same-store revenue rose 9%, and the company reaffirmed that it expects a profit for the year. 

“Traffic tends to transfer to a nearby Blockbuster whenever they close a store,” says Arvind Bhatia, an analyst at Sterne Agee & Leach, Inc., adding that he estimates a “normal attrition” of about 150 store closures in the U.s. this year and next. Blockbuster now has about 8,000 stores worldwide.

"Financially, they're doing well," he adds.

Blockbuster plans to increase its stock of rental and retail movies and games at each store as well as pay for store refurbishing, from paint and carpeting to adding Blu-ray kiosks. Some stores have already undergone a broader remodeling, complete with gaming stations and cafes.

“Too many of the stores still look like the old blue-and-yellow 90s VHS stores,” Casey says.

Group ticket sales could ignite 'Fireproof'

Sure, “Fireproof,” starring Kirk Cameron as a  firefighter struggling to save his marriage, is preaching to the choir — but it’s a big choir. Thanks to grass-roots support and bulk purchases from churchgoers, the faith-based drama could make an impact at the box office this weekend and beyond. The film, from Sherwood Pictures, producer of the under-the-radar, Christian-themed success “Facing the Giants” from 2006, has been No. 1 in advance sales on movie ticketing site Fandango.com with 31% of this week's business, albeit in a slow marketplace — even outpacing sales for the big-budget popcorn thriller "Eagle Eye," starring heartthrob Shia LaBeouf.

Nobody expects “Fireproof,” which distributor Samuel Goldwyn Films will open Friday at 800-plus theaters, to replicate the phenomenon of Mel Gibson’s “The Passion of the Christ,” which jolted the movie industry by grossing $83.8 million during its first weekend in 2004. Nor will it challenge DreamWorks/Paramount’s “Eagle Eye,” which is widely expected to be this weekend’s top grossing movie. (For the skinny on that and the other major Hollywood releases, don't forget to read the Movie Projector column this Friday.) Indeed, the micro-budget "Fireproof" production might have a hard time even cracking the top 10 at the box office this weekend.

But it could open at least as well as “Facing the Giants,” a high-school football saga that launched to $1.3 million and kept on playing, riding word-of-mouth to an ultimate gross of $10.2 million and robust business on DVD. Advance sales for “Fireproof” are much stronger, its marriage theme is more universal and the movie opens on twice as many screens, notes Michael Silberman, Goldwyn’s head of distribution. “The appetite is there but the meal has to be a good one,” Silberman says.

-- Josh Friedman

Spielberg draws up his A-list

This week DreamWorks and parent Paramount Pictures will begin the thorny task of unwinding their business ties, specifically as it applies to more than 200 movie projects in development at DreamWorks that are owned by Paramount.

Those projects will be of particular interest to Steven Spielberg and his associate Stacey Snider because the new DreamWorks, backed by India's Reliance ADA Group, will essentially open its doors with a bare cupboard. Some of the hoped-for movies have been in the works at DreamWorks for years, and would provide a valuable jump-start for the new venture.

Among the 40 or so on Spielberg's A-list, which he wants to stay involved with either as a director and/or producer, are “Tintin,” a $130-million motion-capture film which Paramount is considering bankrolling; “Lincoln,” adapted from Doris Kearns Goodwin’s biography of the 16th president with Liam Neeson expected to star; “39 Clues,” based on a series of adventure books and games from Scholastic; “St. Agnes Stand,” adapted from Thomas Eidson’s western novel about a reluctant hero in the 1860s; “Atlantis Rising,” a sci-fi thriller based on the comic books series of the same name; and ”Children of The Lamp,” also from a series of Scholastic books, about a family of genies who pass for humans.

It’s unclear which of DreamWorks' projects will remain at Paramount -- with Spielberg's involvement -- or which ones will be co-financed or purchased outright by his new company.

Regardless, it's likely to be some time before Spielberg's venture will begin cranking out films. The reason: All the financing needs to be in place before it can start business. Reliance has already agreed to invest $550 million in equity in the company for half ownership. But JP Morgan Chase still needs to raise between $700 million to $750 million in debt. One person close to the situation says that JP Morgan plans to put up about $150 million of the total and will try to sell the remaining portion to other institutions.

In addition to the projects that are in limbo, some 150 DreamWorks employees are waiting to hear whether they will be able to join Spielberg and Snider. Nor has Paramount decided whether it will keep any of those left behind on the payroll. But things don't appear to be highly encouraging, given that Paramount told the DreamWorks principals on Friday that they could leave immediately and take their employees "without delay."

The one person who could calm nerves, however, is not around to reassure anyone. Spielberg left last weekend for a vacation in London, leaving some of his employees to ask Paramount executives what exactly was going on at their own company. That question was left unanswered.

-- Claudia Eller

Photo: Marsaili McGrath / Getty Images

For Brad Grey, no DreamWorks post-parting depression - just yet.

Check out those parting words Paramount Pictures chose Friday when kissing DreamWorks good-bye. In its prepared statement, the studio brass told Steven Spielberg and his pals that not only could they leave and take everyone with them to their new production company (never mind those pesky employment contracts), but they could do it “without delay.”

In other words: Good riddance.

But, hey, no hurt feelings. The DreamWorks folks — especially David Geffen and Stacey Snider — have exactly the same sentiments toward Paramount boss Brad Grey and his team.

So, as Geffen rides off into the sunset, and Spielberg and Snider decide who among their 150 employees will and won’t make the cut to their new venture backed by India's Reliance ADA Group (tough luck to those who helped build the old DreamWorks and will be stranded on the unemployment line), Grey & Co. will only be able to celebrate their end to a tortuous three-year cohabitation with the dream team for so long.

That’s because Paramount's parent — specifically its fiscally tough Viacom Inc. honchos Sumner Redstone and Phillipe Dauman, and their band of not-always-merry shareholders, will be watching closely to see how well Grey can perform without DreamWorks in the house. Let’s be honest. Not every DreamWorks film was a hit like “Transformers,” or “Norbit” (think money losers such as “The Ruins” and “Flags of Our Fathers” ... and just this weekend "Ghost Town" was D.O.A. with about $5 million in U.S. ticket sales.

But, DreamWorks did come to Grey’s rescue with hit films when the former talent manager arrived at Paramount in 2005, discovered the cupboards nearly bare and then misfired with such box-office losers of his own, such as “Stardust” and “Hot Rod.”

Grey, whose studio this summer raked in some handsome fees (though no profits) from distributing the blockbusters “Iron Man” and “Indiana Jones and the Kingdom of the Crystal Skull,” now has to prove that Paramount can develop enough hits by itself.

And for the foreseeable future, the studio, at least on paper, looks to be in decent shape. Next summer the studio is betting big on a trio of fat-budget hopefuls: a “Transformers” sequel, J.J. Abram’s “Star Trek” and “G.I. Joe.” Then in Fall 2009 comes another big budget flick, Marty Scorsese’s mystery thriller “Shutter Island,” starring Leonardo DiCaprio, and DreamWorks' “The Lovely Bones,” which Peter Jackson directed and is based on Alice Sebold's bestselling novel.

Paramount’s 2010 release schedule will include an “Iron Man” sequel in May and an expensive live-action version of Nickelodeon’s animated TV series, “The Last Airbender,” directed by M. Night Shyamalan. Beyond that, the studio plans to relaunch its Jack Ryan franchise, based on character in the spy thrillers by author Tom Clancy; the computer animated movie "Rango," from director Gore Verbinski and to be voiced by Johnny Depp; and a sequel to its 2003 comedy hit "School of Rock."

Hopefully, for Brad Grey, good riddance won't turn out to be a wrong sentiment.

-- Claudia Eller

Photo: Brad Grey. Credit: Matthew Staver/Bloomberg News