In Stampede to Expand, Savoy’s in First

In a world of wildfires and other confidence-shaking events, people still haven’t lost their faith in entertainment. How else to explain the movie mania gripping companies as diverse as Savoy Pictures, Turner Entertainment, MGM/United Artists and Walt Disney Co.?

Savoy set a new standard for start-up entertainment companies this week in announcing that it has raised nearly half a billion dollars for production and distribution. The firm, which is backed by blue-chip players such as Allen & Co. and Chicago’s Pritzker family, plans to release 23 movies a year by 1994--which exceeds the average of some major studios.

That comes on top of Disney’s plans to double its output to 60 films a year, cable mogul Ted Turner’s bid to jump-start Turner Pictures while also increasing production at Castle Rock Entertainment, MGM/UA’s plans to ramp up to about 25 films a year and Polygram Filmed Entertainment’s ongoing expansion.

The stampede is largely driven by advances in technology, which are expected to add to the demand for all types of entertainment. With Barry Diller and Sumner Redstone still locked in a death match over Paramount Communications, Wall Street can’t get enough of the Hollywood action.

But there’s also something more ephemeral at work. It’s the belief that the newer companies can somehow produce enough hits to cover their losses, thereby dodging the bullets that cut down their predecessors. Concerns about too many movies flooding the marketplace, and not enough talent to make them, have been ignored in the excitement over new opportunity.

At the 21-month-old Savoy, which has the most ambitious agenda of any Hollywood start-up in recent memory, investors are banking that Chairman Victor A. Kaufman and President Lewis J. Korman can match their success from nearly a decade ago as the founders of Tristar Pictures.

Savoy came out of the chute early last year with $100 million in seed money and has steadily gained momentum by adding strategic investors such as HBO (5.52%), Chargeurs (5.52%) and Vittorio Cecchi Gori (2.76%) to its original lineup of Allen & Co. (7.55%), the Pritzkers’ GKH Partners (34.98%) and producers Jake Eberts, Frank Price and Andy Vajna.

Savoy’s shares have traded as low as $14.75 and as high as $22 on Nasdaq. The stock closed at $18.375 a share Thursday, up 37.5 cents.

HBO Chairman Michael Fuchs calls his deal with Savoy a key alliance. The agreement gives HBO the U.S. and Canadian home video, pay TV and pay-per-view rights to 12 or more Savoy Pictures a year for four years. He cites the Kaufman/Korman track record as the main reason for his support.

“Victor and Lew have been there before,” Fuchs said. “There’s a perception out there that . . . the company is in experienced hands. It also has some key alliances. So there’s a good pedigree. And that puts it, percentage-wise, ahead in its struggle to be successful.”

The company has also given a big boost to producer and investor Price, who has a receptive place to take his projects. “Whatever Frank wants to do, we’ll do,” said one person close to Savoy.

Not everyone, however, is so high on the operation. Critics predict that Savoy will be out-muscled by the major studios in the competition for screen space and top talent. Savoy’s plans for offering more lucrative deals and more creative control to its talent has set off fears of 1980s-style bidding wars. And the company has created some confusion by moving into production after initially calling itself a distribution company. One top Hollywood executive describes Savoy’s business plan as a “moving target.”

Competitors are also quick to point out that Savoy’s first effort, “A Bronx Tale,” failed to catch fire at the box office, even though the reviews were positive. But others say the company did an able job of marketing and distributing a picture with narrow appeal.

Addressing the criticism, one executive close to Savoy conceded that “the marketplace is going to be very crowded.” But another pointed out that there’s plenty of good material available. “You could fill a studio’s production slate with things that have been passed on that were quality,” the executive said. “And these people are going after quality.”

Besides the HBO deal, which could be worth up to $500 million in the long run, Savoy has multi-picture agreements with “The Fugitive” director Andrew Davis and a tentative deal with George Jackson and Doug McHenry, the duo behind “House Party” and “New Jack City.” It also has film rights to the Tom Clancy book “Without Remorse” and is negotiating to have John McTiernan (“Patriot Games,” “Last Action Hero”) direct.

Savoy’s upcoming slate of movies includes producer Ray Stark’s “Have Gun, Will Travel,” actor Paul Hogan’s “Lightning Jack,” director Richard Attenborough’s “Shadowlands,” producer Frank Price’s “The Honeymooners,” director-producer Garry Marshall’s “Exit to Eden” and director-producer Mike Nichols’ “A Simple Plan.”

“Just watch,” said one veteran executive. “They’ll do fine.”

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Ember Alert: MTV may not be as wild and crazy as people think. In a moment of un-rock ‘n’ roll-like rationalism, the music network on Wednesday moved its opening-night party for the Billboard Music Video Conference from the Santa Monica Pier to Ma Maison Sofitel hotel because of the Malibu-area fires.