Sly Fox

Something strange is happening this summer. Small-scale movies with nopre-sold elements whatsoever are breaking through the summer-movie blitz anddrawing diverse audiences. The apocalyptic 28 Days Later opened strongagainst Charlie’s Angels: Full Throttle and grossed more than $20 million inten days. That may not be the $241 million take of My Big Fat GreekWedding—last year’s big-studio buster-but as duds like The Hulk and Angelslose their juice, 28 Days Later is still building word of mouth, along withthe coming-of-age Brit soccer movie Bend It Like Beckham, which has grossedover $24 million, and the sexy multiculti romp L’Auberge Espagnole, whichhas scored $3.3 million on only 82 screens.

All three movies were released by Fox Searchlight, the specialty-film unit ofTwentieth Century Fox. Founded nine years ago by Tom Rothman (nowco-chairman of the studio), Fox Searchlight is, improbably, batting 1.000.Since Peter Rice, 36, came aboard as president three and a half years ago,all eighteen movies released on his watch have been profitable. With amodest staff of 43 (a tenth of Miramax/Dimension’s roster), Searchlightscored its best year ever in 2002 with seven films collectively grossingover $135 million: One Hour Photo, Kissing Jessica Stein, Brown Sugar, SuperTroopers, The Banger Sisters, The Good Girl, and Antwone Fisher. None madeit to the Oscar ball. But they all made money.

Rice started his career on the Fox lot right after graduating from theUniversity of Nottingham in 1989, when his father, a business crony ofRupert Murdoch’s, opened the door to a summer internship. (This has fueledrumors that Rice is Murdoch’s chosen heir to the Fox studio throne.) He roseswiftly, building relationships with filmmakers like Bryan Singer (X-Men),Baz Luhrmann (Moulin Rouge), and Danny Boyle (The Beach). Rice is the rareHollywood mix of art and commerce: a film-buff numbers cruncher. He hasplenty of English reserve; he doesn’t let emotions get the better ofhim—having spent years chasing Traffic, for example, he let it go when thebudget went out of range. He got his kicks watching Boyle’s 28 Days Latergross $20 million overseas, recouping its $8.7 million cost before it hadeven opened Stateside. “Peter loves it,” says Rothman. “That’s what ittakes. You never win by spending more. You win by smarts, courage, and sweatequity.”

There’s more summer counter-programming to come from Searchlight, includingMerchant Ivory’s romantic comedy Le Divorce, starring Naomi Watts and KateHudson, and the Sundance hit thirteen. Other distributors were scared off byrookie director Catherine Hardwicke’s hyperreal teen drama, but Rice isconfident. “There’s an audience,” he says. “Not everybody. But we’ll makethem know about the movie and cut through to the marketplace.”

For that, Rice relies on his sales team. Marketing chief Nancy Utley has madea remarkably smooth transition from wide releases at big Fox toSearchlight’s smaller scale. And distribution chief Stephen Gilula comesfrom the independent side; he co-founded the veteran art-house circuitLandmark Theaters. Utley and Gilula inventively fine-tune the sales approachfor each movie. For L’Auberge Espagnole, their first foreign-language film,they used “word-of-mouth screenings as a ‘virus’ to tell people about themovie,” Utley says. For 28 Days Later, they posted banners on Websites withlinks to the trailer. Gilula launched the zombie chiller on 1,200 screensvia big-Fox distribution.”We’re integrated with the mother ship,” says Rice. “We have all the benefitsof a big corporate parent, but we’re able to do things in different waysfrom the main studio.” Fox Searchlight also does things differently from itscounterparts while sticking to its core mandate to make every movieprofitable-before going to video and DVD. Here’s the sly little Fox’s playbook:

• Release no more than twelve movies a year, producing half of them,acquiring the rest. (By contrast, in 2002, Miramax released 26 movies; whileChicago and Gangs of New York got great support, smaller films like TheQuiet American were Miramax orphans.) “We are not in the volume business,”says Rothman. “We make every movie count.”

• Spend no more than Rice’s self-imposed ceiling of $15 million. One HourPhoto, Rice’s biggest Searchlight hit, was made for $12 million and grossed$60 million worldwide.

• Rice, Utley, and Gilula, who all have radically different taste, have toagree on buying or green-lighting a movie. (Rice backed 28 Days Later;Gilula urged Rice and Utley to see Beckham at Cannes after seeing how thecomedy opened in London; Utley talked her male colleagues into buyingKissing Jessica Stein.)

• Use edgy scripts to attract stars willing to take a pay cut, like RobinWilliams (One Hour Photo) and Ben Kingsley (Sexy Beast).

• No period movies. Period.

• Secure worldwide distribution rights for big Fox.

• Only buy or make a movie that will succeed theatrically. (A radicallyold-fashioned idea. Most companies today concentrate on building theirlibrary and selling to television and home video to make their money.)

• Before going forward, each movie must have two defined market niches: oneif the movie is perfectly executed and another if it is not.

• To maximize every film’s potential, calibrate the exact target audience andallocate resources accordingly. When Rice wouldn’t let producer Mark Johnsonspend more than $10 million on The Banger Sisters, even with stars GoldieHawn and Susan Sarandon, Johnson was bitter. “But when it was over and donewith,” Johnson says, “I was glad Peter stuck to his guns. We made the moviewe wanted, and it was successful because it only cost $10 million.”

Don’t give away the store in order to win an Oscar. Rice would love toscore an Oscar breakout, and learned his lesson when he went for thestatuette with Denzel Washington’s Antwone Fisher—only to come up short withcritics. Utley thought they were going to lose a lot of money. Luckily, thedollars came back in huge video and DVD sales—an exception to Searchlight’sown rule.

The funny thing is, fox searchlight is only doing what all studios used toknow how to do, but somehow forgot. It will be interesting to watch howWarner Bros. president Alan Horn handles his newly formed specialty unit.Warners doesn’t know anything about the art-film business, and the Tiffanystudio is notorious for its free-spending reliance on bigger-is-betterfranchises like Harry Potter and The Matrix, and movie stars like TomCruise. Horn is now reeling in eight-year Miramax marketing veteran MarkGill, who left last year to produce.

Now Horn and his production chief, Jeff Robinov, just need to figure out whatbusiness they want to be in. Horn is feeling pressure from StevenSoderbergh, a prolific director with proven chops in films both mainstream(Ocean’s Eleven) and arty (Full Frontal) whom Warners would love to keep oncampus for all his projects. But if the Warners sales staffs, alreadyoverburdened by a huge release slate, try to handle additional specializedmovies, they’ll wind up with a string of flops like George Clooney’s Welcometo Collinwood.

If Horn models little Warner on chic Miramax, he’s destined to fail. FoxSearchlight, on the other hand, is proving that you can reach audiences withgood movies, and lure hot talent—like Alexander Payne and David O. Russell—as long as you know what you’re about.

Sly Fox