[Marxism] Comedy as commodity

Louis Proyect lnp3 at panix.com
Sun Nov 12 07:42:27 MST 2006

NY Times Magazine, November 12, 2006
Funny Money

If you spend a week in Los Angeles asking 
Hollywood studio bosses what makes a comedy film 
successful these days, the conversations will 
most likely start off about art — or, more 
precisely, about the art of humor. Production 
executives will explain that “execution is 
everything.” Or that “perfect timing” is what 
really matters. Or that “chemistry” between the 
cast and director is what truly makes things 
(they actually say “magic” sometimes) happen. But 
chances are the talk will turn into a discussion 
about money. Late one afternoon in September, 
just before dinner, that’s the sort of 
conversation I had with Tom Rothman at his office 
on the 20th Century Fox lot. Rothman and his 
partner, Jim Gianopulos, serve as co-chairmen of 
Fox Filmed Entertainment; together, they have had 
an especially profitable run of comedies over the 
past few years, most recently including “The 
Devil Wears Prada,” which this year took in $125 
million at the domestic box office. As Rothman 
put it, “Comedies have been very good to us.” To 
prove his point, he began rummaging through some 
low shelves outside his office that were 
cluttered with awards. They weren’t Oscars but 
angular statuettes known as Gold Reels, given by 
a movie-tracking service, Nielsen EDI, to a 
studio when one of its films reaches $100 million 
in domestic box-office receipts. “ ‘Dodgeball’!” 
Rothman said triumphantly when he found the award 
for the movie, which starred Ben Stiller and 
Vince Vaughn. That one cost $18 million to make, 
he pointed out, and earned $114 million 
domestically. “And here’s ‘Something About Mary,’ 
” he said, dusting off the inscription before 
handing me the bulky statuette. “There’s 
Something About Mary,” which Rothman considers an 
early source for the style, appeal and 
eccentricity of contemporary Hollywood comedies, 
cost $20 million. It earned $176 million 
domestically. And it fared even better abroad, 
which is rare for a comedy, bringing in another $195 million.

To hear some studio heads tell it, comedies have 
been an unusually good business over the past few 
years, even as box-office revenues in general 
have languished. “The world is grim, and comedy 
always plays as a healthy antidote to what’s 
going on in the world,” Matt Tolmach, a president 
of production at Sony Pictures, told me. This 
year, Sony had two big comedy hits with “Click,” 
starring Adam Sandler, and “Talladega Nights,” 
starring Will Ferrell. Tolmach also noted that 
we’re in a cycle with an uncommonly high number 
of talented comedians and directors, which he 
regards as happenstance more than anything else. 
The success of Stiller, Owen Wilson and Vince 
Vaughn (all of whom, incidentally, share the same 
agency, United Talent, and all of whom now earn 
as much as $20 million a movie) recalls the 
1980s, when an abundance of “Saturday Night Live” 
actors (many of whom shared the same manager, 
Bernie Brillstein) made the jump to films. Maybe 
the biggest difference, one film executive told 
me, “is that now there are probably a lot less drugs involved.”

When it comes to raw numbers, though, it’s not so 
obvious that comedies are booming. According to 
Nielsen EDI, for instance, 145 different comedies 
took in $2.79 billion at the United States box 
office in 2003; the next year, 161 comedies made 
about $2.74 billion. And in 2005, 164 comedies 
again accounted for about $2.74 billion in 
domestic box-office revenues. Generally speaking, 
about 30 percent of total box-office revenue 
comes from comedies in a given year. So it would 
seem that things are holding steady, or perhaps 
even falling off a bit. The Nielsen figures, 
however, don’t capture the renewed interest among 
Hollywood executives in producing comedies made 
on the cheap, including those that have helped 
turn Ferrell, Wilson and Vaughn into stars. This 
speaks to the difference between comedy revenue 
(the total amount of money taken in at the 
domestic and international box offices) and 
comedy profitability (the money left over after 
subtracting the costs of producing, marketing and 
distributing a film). To the studios, the 
potential profitability of a comedy is a far more 
important consideration than revenue. Indeed, 
it’s the only statistic that really matters.

Hollywood studio executives are called lots of 
things, many of them unprintable, but they are 
rarely described as what they really are: 
portfolio managers. They don’t invest in 
companies, of course; they invest in movies — a 
far more complex and risky endeavor, 
statistically speaking. But in many respects the 
differences end there. Essentially, the studio 
bosses spend a large part of their time thinking 
about how to manage risk. They diversify their 
movie portfolios — their yearly “slates,” usually 
between 12 and 20 films — by genre, mixing 
comedies, animated films, dramas and action 
movies. Then they diversify by cost, betting on 
some projects that cost $25 million and others 
that cost $150 million. And rather than finance 
all these movies themselves, they often team up 
with other studios, outside production companies 
and, more recently, Wall Street investors. 
Studios also shop for bargains at places like the 
Sundance Film Festival, figuring that they can 
transform a cheap purchase into a big hit by 
exploiting their marketing skills and vast 
distribution networks. That has been the case 
with “Little Miss Sunshine,” for instance, which 
Fox’s Searchlight division bought for $10.5 
million. To date, it has taken in nearly $60 million in the United States.

Comedies don’t necessarily produce higher 
revenues than other genres — indeed, there are 
enough bombs every year (like Ben Stiller and 
Jack Black in “Envy”) to suggest that, on 
average, a comedy earns a Gold Reel no more often 
than any other kind of film does. But comedies do 
tend to have lower physical production costs, 
since they often don’t require extravagant sets 
or expensive postproduction work. And if they 
have low artistic production costs as well (for 
the cast and directors), they have a kind of 
jackpot potential that dramas, at least in recent 
years, have lacked. In other words, even when a 
comedy doesn’t produce the huge revenues of a 
blockbuster like “Harry Potter,” it can help push 
the returns of a portfolio way up if it is put 
together in a way similar to “Little Miss 
Sunshine” or “The 40-Year-Old Virgin,” which 
starred an inexpensive and untested Steve Carell. 
Such a film will pay off in the theater, on DVD, 
in television sales — and ultimately contribute 
to the studio’s catalog. A popular comedy is a 
valuable piece of intellectual property. If it’s 
made cheaply, it’s the equivalent of investing early in Google.

“People think it should be easy, but it isn’t,” 
says Harold Vogel, a longtime 
entertainment-industry analyst. In part that’s 
because creating a financial hit isn’t just a 
matter of getting good scripts or finding 
up-and-coming stars; it’s also the challenge of 
successfully marketing a new product to choosy 
and often skeptical audiences. Some recent 
comedies — “Wedding Crashers” and “The 
40-Year-Old Virgin,” for example — have had a 
broad, mass-audience appeal. But the studios 
often think of the comedy market, and thus their 
comedy products, in narrower terms: romantic 
comedies, road-trip comedies, spoofs, “dramedies” 
and the like. In fact, studio chiefs make a 
concentrated effort to match specific kinds of 
comedies with specific demographic groups, 
especially young men. This may explain the 
existence (and, to some extent, the popularity) 
of a film like “Jackass Number Two,” as well as 
the inevitability of a “Jackass Number Three.” 
Indeed, the franchise’s financial viability — 
“Jackass Number Two” cost less than $12 million 
to make — and demographic sweet spot suggest it 
may go on indefinitely, perhaps until a freak 
accident obliterates the entire gang in “Jackass: The Final Wipeout.”

When I made the rounds in Los Angeles earlier 
this fall, “Jackass Number Two” had just opened 
strongly for Paramount, burying “All the King’s 
Men,” a period drama starring Sean Penn. Gail 
Berman, the president of Paramount, seemed 
elated. Not long after she started her job in May 
2005, Berman told Variety that her plans for the 
studio were simple: “Comedy, comedy, comedy, 
comedy.” When I met with her at Paramount, she 
explained that the lack of comedies in 
development when she arrived led her to push for 
the quick greenlighting of “Jackass Number Two” 
and “Nacho Libre,” the Jack Black comedy. “Nacho 
Libre” proved to have a strong family appeal. But 
both projects were largely created with the 
under-25 male demographic in mind, and with an 
eye on strong DVD sales to those same young men. 
And her next priority, Berman told me, was to try 
to recreate her studio’s success with a romantic, 
star-driven comedy like “Failure to Launch,” 
which starred Matthew McConaughey and Sarah 
Jessica Parker and took in $88 million 
domestically. Or to put it another way, she 
wanted to score a hit with a different market segment — female audiences.

“Jackass Number Two” represents a financial 
approach to comedy that you might call the 
penny-stock comedy model. Paramount isn’t the 
only studio that now relies on this strategy. 
When I visited Fox’s studios, for instance, Tom 
Rothman’s team had just spent the summer revving 
up the marketing machine for “Borat,” which was 
already creating a stir in town, even among jaded 
movie execs. That movie cost just $17 million. 
Meanwhile, the studio was also laying the 
groundwork for the release of “Night at the 
Museum,” a special-effects-heavy comedy starring 
Ben Stiller (with Robin Williams, Paul Rudd, Dick 
Van Dyke, Mickey Rooney and a cameo by Owen 
Wilson), which had been in development at Fox for 
10 years and which cost $110 million, a sum that 
does not include marketing and distribution 
costs. You might call “Museum” the blue-chip comedy model.

I asked Rothman to predict how the two films 
would do. Studio chiefs worry privately about 
every opening weekend; bombs, like blockbusters, 
can come out of nowhere. Yet the chiefs never 
display a lack of public enthusiasm for coming 
releases. On “Museum,” which will open just 
before Christmas, Rothman was blithe. He had 
attended some test screenings and told me that as 
a result he was utterly confident the film would 
do well. “I know it’s a smash, and I know the 
audience will love it,” he declared. He also 
predicted that it would travel well and make a 
substantial profit: “I’ll tell you, I’ll be 
shocked if whatever that movie does domestically, 
it doesn’t do 150 percent of that 
internationally.” In other words, if the film 
takes in $150 million domestically — a 
hypothetical amount, since it could do far better 
or far worse — it would earn another $225 million worldwide.

And what about “Borat”? Rothman sighed. It was 
still six weeks before the film would open, on 
Nov. 3, and he thought it would do well, but he 
could not forecast how well. “As a matter of 
fact, I could predict the ultimate gross of 
‘Borat’ probably less well than any movie we have 
for the rest of the year.” Rothman noted that he 
and Gianopulos would never make “Borat” for the 
price of “Night at the Museum,” but the fact that 
Fox could do “Borat” at a modest cost made it 
worth putting into production. Rothman then 
raised the issue of whether the studios had lost 
their appetite for taking chances. “That’s 
actually not true at all, in my opinion,” he told 
me. “Borat” was the kind of risk worth taking, he 
added, “which means you have to be willing to 
risk failure.” And yet “Borat” seemed more of a 
creative risk than a financial risk. The film 
didn’t cost much by Hollywood standards, and 
expectations around town were so high that every 
studio executive I spoke with — every executive, 
that is, except Rothman — seemed to think it 
would be tremendously profitable. For Fox, that 
would make it a very safe bet indeed.

When it works, the penny-stock model for comedies 
highlights the savvy of studio executives in a 
way a blue-chip picture can’t. Anyone can spend 
large sums on stars, computer-generated effects 
and then marketing and distribution, but not 
everyone can conjure profits so resourcefully. 
One of the visionaries of this approach is Tom 
Pollock of the Montecito Picture Company, a 
partnership between Pollock and the director Ivan 
Reitman. When he described his projects to me, 
Pollock made the business sound simple: find a 
good script, pick an undiscovered star or 
anonymous acting ensemble, get a good but not 
expensive director and run a tight ship while 
filming. “Road Trip,” which Montecito produced 
for DreamWorks in 2000, was a model for this kind 
of film. The idea behind it — four characters go 
on a raucous drive from Ithaca, N.Y., to Austin, 
Tex., to save a romantic relationship — was 
generated internally at Montecito, but Pollock 
didn’t have a script or a director. Then Ivan 
Reitman’s son, Jason, who is also a director, 
noticed a documentary at the Sundance Film 
Festival called “Frat House,” by Todd Phillips 
(and Andrew Gurland); he suggested his father and 
Pollock take a look, too. “We saw it and thought, 
Here’s the guy who really gets the joke,” Pollock 
told me. So Montecito hired Phillips to direct, 
and Phillips in turn wrote a script (with Scot 
Armstrong) for the lowest rate allowed by the 
screenwriters’ union. After multiple drafts, it 
seemed promising enough for DreamWorks to put it into production.

Pollock, a former studio chief at Universal, 
points out that you probably can’t make a great 
action picture for $25 million. But you can be 
funny on any budget. A Montecito production — so 
far there have been three in this vein: “Road 
Trip,” “Eurotrip” and “Old School” — costs, on 
average, a fraction of what typical studio films 
do and (so far) earns a better rate of return. 
“Road Trip” cost about $17 million, Pollock told 
me, and “Eurotrip” and “Old School” each cost 
about $25 million. “Eurotrip” did about $18 
million at the box office,” he explained, “so it 
lost a little money.” But both “Road Trip” ($68 
million) and “Old School” ($75 million) did well 
at the U.S. box office, especially with young 
men. “Old School” sold about six million DVDs, 
moreover, which translated into extraordinary 
additional profits. “This is a long, fancy way of 
saying that when you make these kinds of 
comedies, on your losers you’ll lose $3 million 
or $4 million,” Pollock said. “But on ‘Old 
School,’ DreamWorks, our partner, made over $100 million. Cash.”

Sequels have a different calculus. When Montecito 
made “Old School,” for instance, Vince Vaughn and 
Will Ferrell together were paid about $2 million. 
For “Old School 2,” a film Pollock would like to 
make even though it doesn’t fit his frugal 
approach, Vaughn and Ferrell together could cost 
as much as $30 million or $40 million — and that 
doesn’t include the original’s third star, Luke 
Wilson. This isn’t a problem only Pollock faces; 
it’s an industry-wide quandary. As one agent told 
me, unless such stars adopt a sliding scale, the 
economics of combining two or three of them in a 
single film no longer make sense. To many people 
I spoke with — agents, producers and executives 
alike — the top talent has been so successful 
that they now risk pricing themselves out of the very markets they’ve created.

A few months before I visited Los Angeles, this 
was the situation when Rothman and Gianopulos at 
20th Century Fox pulled the plug (at least for 
now) on “Used Guys,” a science-fiction comedy 
starring Ben Stiller and Jim Carrey, partly 
because its projected costs reached $112 million. 
In Hollywood, those close to the matter were 
still discussing its implications. At the very 
least, the blowup appeared to be a warning that 
the studios were getting serious — I often heard 
the word “rational” — about minimizing risk and 
boosting profits. But whether it meant that 
comedy stars would no longer fetch enormous 
upfront payments — that seems doubtful. As 
financially attractive as the penny-stock model 
for comedies may be, movies with huge stars will 
not suddenly disappear. “Those guys who are 
getting $20 million,” Rothman says, “if they’re 
in a very funny film, they’re likely, on a purely 
economic basis, to be worth it.” What seems 
probable is that stars who have been getting 
large, additional “back end” percentages of a 
film’s gross will find those deals a thing of the 
past. And it almost certainly means that the 
studios’ interest in some blue-chip comedians is 
on the wane. Jim Carrey, for instance, has had a 
dismal year — not only did he change agents, but 
two film projects he was involved in, in addition 
to “Used Guys,” collapsed. Carrey’s films have 
taken in billions around the world; in purely 
financial terms, his value to the studios has 
been far more than $20 million a picture. Yet the 
difficult question now is whether, after a string 
of failures, employing him at a high salary plus 
a back-end percentage diminishes the profit 
potential for the studios. Put simply, Carrey may be too big a risk these days.

Newly expensive stars like Vaughn and Ferrell 
present a different kind of uncertainty: both 
stars’ movies do well here but poorly abroad. 
Pollock says he believes that the domestic (and 
DVD) potential of “Old School 2” makes it 
worthwhile to spend the money on the stars 
anyway. He and Reitman may get the money without 
going through the studios: they recently struck a 
deal with Merrill Lynch to help finance a slate 
of 10 films, at an average cost of $25 million. 
Michael Blum, a managing director at Merrill 
whose team agreed to finance the deal, says that 
computer-driven analysis — usually the stock in 
trade of any investment banker — can’t contribute 
as much to this deal as it might to non-Hollywood 
ventures. Investing in a couple of respected 
movie veterans, on the other hand, who have a 
prudent approach and enough access to the studios 
to influence a range of crucial factors (a 
movie’s opening date, for instance), should have 
a positive effect on box-office results. You 
can’t be blind to the subjective side of this 
business, Blum told me: “We’ve got sophisticated 
computer models. We can slice and dice and look 
at slates of films in prior years in various 
different ways. We can put probability on certain 
genres, in certain seasons, with certain budgets, 
with certain directors, and spit out various 
probabilities of returns.” But as Blum sees it, 
Reitman and Pollock simply know how to identify 
promising material and make good, profitable 
movies. “Old School 2” doesn’t fit their typical 
criteria, but Blum says that it might make sense 
anyway. The costs will no doubt be higher, but 
Blum sees higher revenues too. And he may wager 
that that will translate into healthy profits.

Over time, the studios may become more receptive 
to relying on probability models for their 
decisions; several economists who study the 
industry, most notably Anita Elberse at Harvard 
and Jehoshua Eliashberg at Wharton, told me they 
believe we’re on the cusp of understanding how 
studios can make more efficient bets on films. 
One advance would use computer models to put a 
more accurate value on the contributions of stars 
(and thus adjust their salaries accordingly); 
another would evaluate the financial viability of 
scripts before approval (Eliashberg has spent the 
past few years creating a database and software 
program called the “scriptanalyzer” for just such 
a purpose). Elberse and Eliashberg have each 
discussed using such methods with at least one 
studio and various production companies.

One plausible outcome is that sophisticated 
analysis would screen out more of the losers, 
resulting in a higher percentage of good — or at 
least financially viable — movies. But would we 
get as many great and risky films? And would we 
get better comedies? That seems unlikely. 
Computers and money managers aren’t the best 
arbiters of funny. Obviously they lack the quirky 
appreciation that allows for “There’s Something 
About Mary,” a movie (made, not incidentally, 
with then up-and-comers Ben Stiller and Cameron 
Diaz) that arguably raised the bar for what’s 
permissible in a mainstream comedy. It’s 
doubtful, moreover, that such a risk-averse 
system could tolerate the old-fashioned Hollywood 
pitch. When Matt Tolmach and Doug Belgrad, both 
production presidents at Sony, agreed to make 
“Talladega Nights,” for instance, it was an act 
of faith. The pitch consisted of Tolmach, Will 
Ferrell, the director Adam McKay, the producer 
Judd Apatow and Ferrell’s manager, Jimmy Miller, 
all together in an office saying, “Will and 
Nascar.” “That was it,” Tolmach told me when I 
met with him and Belgrad in their offices at 
Sony. “There was no script. And we agreed to make the movie.”

I asked them if they could imagine backing out of 
the deal if the script, when it came in, wasn’t funny.

“We didn’t,” Tolmach replied. “And we honestly 
didn’t think about it a lot. I mean, it wasn’t 
literally ‘Nascar!’ and then they left the room. 
They had a character. They really knew who Ricky Bobby was.”

Belgrad added: “And there was a basic shape to 
it. It was kind of a sports movie.”

“There was a rise and fall and rise,” Tolmach 
said. “There was hubris and all that stuff.”

“But yeah, it was a big bet,” Belgrad said.

“And we’re doing the same thing with their next 
one,” Tolmach said. “And honestly, I feel better 
about that than about some scripts I have on some 
movies that we’re making. I like those too. But 
these guys know what they do, and they know what 
is funny, and they know how to make their stuff funny. And they’re commercial.”

Jon Gertner, a contributing writer, last wrote 
for the magazine about the nuclear-power industry.

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