Imagine That : Movie-Making Duo Has One of Industry's Best Track Records

By Claudia Eller

Oct. 22, 1996 12 AM PT

Director Ron Howard and producer Brian Grazer aren’t successful because they’re brilliant businessmen. They demonstrated that for the seven years they ran Imagine Entertainment as a public company, ultimately creating little value for shareholders or themselves.

But the two do know how to pick movies and to make them. And in a tough, low-margin industry, they’ve parlayed that talent into one of the most prosperous and long-standing partnerships in Hollywood.

This year, the partners celebrate the 10th anniversary of Imagine, which has spawned such hits during the last decade as “Apollo 13,” “The Nutty Professor” and “Kindergarten Cop.”

“There have been only a few successful producer-director partnerships in the history of movies,” said former MCA Motion Picture Group Chairman Tom Pollock, who recruited them to Universal Pictures under a long-term financing and distribution arrangement. “It’s remarkable that they’ve stayed together and made as many successful movies as they have.”

That’s not to say Imagine has been immune to flops. It’s had its share like any other movie company, with such clunkers as “Cry Baby,” “Sgt. Bilko” and “The Cowboy Way.” Last weekend, their latest film, “The Chamber,” based on John Grisham’s bestseller, opened to a disappointing $5.6 million.

But in total, the 30 or so films that Howard and Grazer have made have grossed more than $2.5 billion worldwide--giving the duo one of the best track records around.

Even so, only in the last 3 1/2 years, since taking Imagine private in March 1993, have the partners reaped the kinds of financial rewards enjoyed by other filmmakers of their ilk.

During its seven years as a public company, Imagine was not profitable for either Howard or Grazer, who owned 54%, or the shareholders. After going public at $8 a share in 1986, the partners took the company private at $9 a share in a $23.4-million buyout. A number of investors were furious about the low price; shareholder lawsuits resulted but were later dropped.

The company operated with huge overhead, never had any “Jurassic Park”-size hits and never grew beyond its core business. Universal, which financed most of Imagine’s movies, “profited more than the company or the boys,” said a financial source. Howard and Grazer each earned about $1 million a year and had to put all producer fees and profit back into the company, which meant they were paid far less than their peers.

MCA advanced the partners the money to buy Imagine, and it now owns the Imagine library and future film projects. But Howard and Grazer currently make what top producers and directors make. For Grazer, that means $2 million to $2.5 million per picture, plus about 5% of first dollar gross. Directors in Howard’s league get $6 million to $8 million, plus 10% of first dollar gross. (First dollar gross is the Hollywood equivalent of striking gold. The recipient gets a percentage of revenue even before the costs of the film are paid off.)

“The deal is much better than when we were public,” said Grazer.

When they took the company private, the partners cut the staff from 100 to less than 30, keeping key division heads such as Karen Kehela, president of production, and Executive Vice President Michael Rosenberg, who oversees marketing and distribution. It shuttered certain divisions such as TV and the New York office. In the view of Wall Street analysts, creative types such as Howard and Grazer had no business running a public company, and today the two are the first to admit they’re not exactly the corporate manager types.

“We don’t make money by being clever businessmen,” said Howard. “We make money by being effective storytellers; that’s our business.”

The new administration at MCA, said Howard, is “looking to us for broader diversification,” which led to a recent venture in which MCA and Spencer Gifts are partnered with Imagine on its Chamber of Chills chain of haunted houses, which feature live actors and Halloween retail stores at 11 locations, including a newly opened venue at Universal CityWalk.

Although Imagine isn’t exactly in the theme park business, Howard and Grazer were involved in the creation and design of the Universal Studios ride “Backdraft,” based on their 1991 hit movie, and similar attractions are in the works for “Apollo 13” and possibly “The Nutty Professor.”

The partners are also launching their own Imagine Books label, with plans to publish, among other works, a line of Chamber of Chills children’s books.

Howard and Grazer are also restarting Imagine’s TV division, with potential series based on Chamber of Chills, “The Nutty Professor” and possibly their upcoming Jim Carrey comedy, “Liar, Liar.” Imagine’s previous movies-to-series spinoffs, “Parenthood” and “Problem Child,” were ill-fated.

On the movie side, Imagine plans to continue to make about six a year, with hopes of developing more mass-appeal films such as “Apollo” (which grossed $345 million worldwide), said Howard, who typically directs one film every 18 months.

Ask Howard and Grazer--or anyone who knows them--and they’ll say the partnership is effective because they are truly the odd couple.

Tom Hanks, who has starred in three films for Imagine--”Apollo 13,” “The ‘Burbs” and “Splash”--said: “They do complement each other. Ron likes to tinker on movies, and Brian is a Socal classic honcho deal-maker kind of dude. And there’s some gestalt Vulcan language that only Ron and Brian speak to each other.”

The All American-looking Howard, 43, in his usual attire of baseball cap and jeans, is levelheaded and pragmatic. He lives far from the Hollywood rat race in rural Connecticut with his wife, Cheryl, and their four children. He’d much rather spend his time tinkering in the editing room than schmoozing at Cicada.

With his trademark spiky hair, wiry physique and Hollywood-chic attire, Grazer, 45, is a fast-talking Energizer Bunny who is continually hatching creative ideas that sometimes become movies. He forever has a phone to his ear, chatting it up with the most high-powered agents, lawyers and studio executives, hustling to put movies together. He loves hanging out with buddies Hanks, Michael Keaton and Steve Martin, and has a very different social take on life than his partner and best friend.

Last year, at a private dinner in London with Princess Diana following a screening of “Apollo 13,” Grazer offered to fix up the newly single princess on a date--something Howard considered a major faux pas.

“ ‘Are you crazy? You can’t fix her up. They will never let us back into the U.K.,’ ” Grazer recalls Howard saying to him. Grazer said Howard instructed him “not to follow up on this” and he didn’t.

Yet Grazer said he and Howard “creatively agree on most everything, but come to it from entirely different directions.”

“Brian sees the world in a very different way, in a kind of conceptual way--broad strokes, but with a lot of insight,” Howard explained at a recent interview with the two at the Hollywood Canteen diner.

“He works on intuitive levels and has found a lot of success with that. I’m much more methodical. To me, everything is about execution. I grew up engaged in the process of problem solving on this real step by step basis,” said Howard, who first appeared on the big screen at age 4 and became a TV icon as Opie on “The Andy Griffith Show” and as Richie Cunningham on “Happy Days.”

Said Grazer: “I’ll stir a lot of things up. But not all those things are good or productive or useful. Ron has an amazing amount of wisdom and a really strong creative vision . . . so he always has a smart answer to everything I ask him.”

Grazer is always trolling for movie ideas and expanding his own knowledge about the world. One of his favorite pastimes is picking the brains of extraordinary people such as polio vaccine inventor Dr. Jonas Salk and Titanic discoverer Bob Ballard.

In running Imagine, Grazer spends most of his days marrying the right actors, writers and directors to the right material and, as Pollock said, “he’s great at pushing projects through the studio machinery.”

Those qualities are why Grazer was approached about running Sony Pictures. Although he wasn’t interested at the time, he admits that running a studio would be interesting.

“I’m curious about that, and someday I might do some job like that because you have the curiosity of being tested and being better than everybody else,” he said.

The two first worked together 14 years ago on “Night Shift,” a comedy based on Grazer’s idea, after having met in 1980 when they were each at Paramount. Howard had just left “Happy Days” after seven years, was acting in and directing TV movies and was looking to direct his first studio feature. Grazer, who had been producing TV pilots, saw Howard outside his office window, called him up and invited him to lunch to pitch some ideas.

Although they didn’t sell the one idea that Howard liked best, the director said he was impressed that Grazer “generated all these meetings,” and was subsequently struck by the producer’s tenacity in getting their first two films, “Night Shift” and “Splash,” off the ground.

Grazer, whose late father was a criminal lawyer, broke into the business after getting a $5-an-hour job as a law clerk at Warner Bros. and working as a reader at night. He shunned law school to pursue the movie business because it all looked so simple.

The producer said he and Howard “talk every day about how grateful we are,” and it amuses him to think, “We’re both middle-class guys from the Valley.”

“We think of ourselves as C students who will work harder than anyone else to get an A,” said Grazer, who as a dyslexic couldn’t read or write a word until the fifth grade.

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Imagine All the Movies

Imagine Entertainment, maker of such films as “Apollo 13” and “Kindergarten Cop,” began life as a public company in 1986. It was taken private by its co-founders, producer Brian Grazer and director Ron Howard, three years ago, and has a long-standing relationship with MCA/Universal Pictures, which distributes most of Imagine’s four to six pictures a year.

The Owners

Brian Grazer, 45, the son of a criminal lawyer, was raised in Sherman Oaks. He went to USC on a swimming scholarship and graduated with a degree in psychology. He broke into the business writing and producing TV movies, and in the early 1980s produced his first feature film, “Night Shift,” a comedy based on his idea for which he hired Ron Howard as director.

Ron Howard, 43, grew up in Burbank. He starred in his first movie, “The Journey,” at age 4, and subsequently appeared in “The Music Man.” He became a household name as Opie in the long-running TV series “The Andy Griffith Show,” and in the 1970s he starred in “Happy Days.” In 1977 he directed his first low-budget movie, “Grand Theft Auto,” at age 23. Other directorial efforts include “Splash,” “Cocoon,” “Apollo 13” and the upcoming “Ransom,” starring Mel Gibson.

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Imagine: The Company

Imagine Entertainment’s hits, misses and projects in the pipeline:

The Future

* MCA and its Spencer Gifts division are partnered with Imagine in Chamber of Chills, a chain of haunted houses with live actors and attached retail stores in 11 locations, including Universal CityWalk.

* Imagine is planning an Imagine Books label with a line of Chamber of Chills children’s/teen books, novelizations and other works to come.

* It plans to restart its TV division with a possible series based on Chamber of Chills and potential spinoffs of “The Nutty Professor” and the upcoming Jim Carrey comedy, “Liar, Liar.”

* It will continue to develop MCA/Universal theme park rides based on Imagine’s hit movies, including “Apollo 13” and possibly “The Nutty Professor”

Box-office hits*

“The Nutty Professor,” Universal, June 1996, $192.5 million to date, with estimated total of $250 million

“Apollo 13,” Universal, June 1995, $345 million

“Housesitter,” Universal, June 1992, $91.4 million

“Backdraft,” Universal, May 1991, $152.3 million

“My Girl,” Columbia, November 1991, $120 million

“Kindergarten Cop,” Universal, December 1990, $202 million

“Problem Child,” Universal, July 1990, $72.4 million’

“Parenthood,” Universal, August 1989, $124.4 million

Misses

“Fear,” April 1996, $20.7 million