Is Universal pulling Focus?

Anne Thompson has a really good story in today's Variety breaking the news that Universal is nearing a deal to sell its Rogue Pictures label to Ryan Kavanaugh's Relativity Media. The sale, Thompson reports, would give Kavanaugh Rogue's 30-title library as well as its entire development slate, including four films already set for release in 2009. Universal, which gets $150 million for the Rogue assets, will agree to distribute Rogue films through 2013. Rogue was launched in 2004 by Focus Features as a way for Focus, Universal's specialty film division, to diversify its product, giving it the ability to deliver youth-oriented commercial genre pictures as well as art-house dramas for older moviegoers.

So, to quote from the title of Art Linson's current Hollywood satire--what just happened? As usual, Variety--despite Anne's good reporting--has managed to avoid stating the obvious: The sale of Rogue probably marks the beginning of the end for Focus Films. If Universal is willing to dump Focus' genre arm, the most consistently commercial underpinning of its specialty division, then surely it is ready to put the squeeze on Focus itself. Just look around: In an era where entertainment conglomerates are under enormous pressure to save money and drastically lower their overhead, virtually every studio in town has either downsized or shut down its specialty division.

Now that Universal has brought DreamWorks on board, which will deliver six or more movies a year, there's really no justification for paying the freight needed to sustain Focus as a full-blown studio division. Even though Focus did a great job with "Burn After Reading," going against the conventional wisdom by releasing a Coen brothers movie in early September after the filmmakers had won an Oscar--and outperforming expectations with a great comedy marketing campaign--the old specialty model that created Focus is dead. In a transformed economic environment, studios are no longer willing to subsidize a division that relies on insanely costly Oscar campaigns to try to make its numbers.

With Rogue gone, Focus' days are numbered. Just as Warners didn't close up all its specialty divisions at once, preferring to spread out the bad news over a period of months, Universal will probably say, for now, that it's committed to Focus' survival. That's because the company is about to launch "Milk," its big end-of-the-year Oscar movie, whose campaign would be undermined if Focus looked like a lame duck. Expect Universal to wait until next spring, after Oscar season is over, before quietly announcing layoffs, signaling that Focus, like Paramount Vantage before it, will remain a label, but without its own marketing and distribution apparatus.

Rogue may well be a shrewd deal for Ryan Kavanaugh, who now has the ability to put a number of films through Universal's top-notch distribution machinery. But it makes Focus' future look shakier than ever, which in turn makes the future for quality low-budget films look a little more bleak as well. 

Photo of Josh Brolin (left) as Dan White and Sean Penn as Harvey Milk in "Milk" by Daniel Nicoletta / Focus Features    

Comments

[Grady]

Patrick, are you not aware that Rogue hasn't been under the aegis of Focus for quite some time now? It's been operating as a unit of Universal, with no connection to the development, production, or marketing people at Focus for more than a year--which sort of invalidates this entire article.

[Griff]

Also, simply writing that "Rogue was launched... as a way for Focus, Universal's specialty film division, to diversify its product, giving it the ability to deliver youth-oriented commercial genre pictures as well as art-house dramas for older moviegoers." is ingenuous. The model for Rogue was clearly Miramax's highly successful subsidiary Dimension, an exploitation/genre label which was frequently far more profitable than the studio that spawned it.

[george winston]

How is this a "shrewd deal" for Kavanaugh? Didn't he just make a deal to finance 50% of Uni's slate for the forseeable future? How could he not get the Gold Circle/Morgan Creek deal without having to relieve the studio of this unit's development slate, staff and overhead?