ShoWest begins with sober remarks from 20th Century Fox studio chief

Michael Fleeman

Monday, March 8, 1999 | 5:07 a.m.

The movie industry's biggest trade show kicked off Monday with a sober message from the head of the 20th Century Fox studio: Skyrocketing production costs and huge paychecks for stars and directors are threatening the industry even at a time of record box office grosses.

"We are in a time of great promise and yet we are perhaps faced with greater problems," said Bill Mechanic, chairman and CEO of Fox Filmed Entertainment, in a speech before more than 600 movie theater operators and others gathering for their annual convention.

Mechanic's solemn remarks were particularly ironic since they came from the chief of the studio that co-produced "Titanic," the most expensive movie in Hollywood history - and the one with the highest box office grosses. Fox also is the company that is distributing what likely will be the biggest movie of this year, the "Star Wars" prequel.

But coping with the wild extremes in the movie business these days is the overriding theme at ShoWest, which runs through Thursday with seminars, movie sneak previews, an all-star awards show and a look at the biggest technological innovation in the industry since the invention of the movie projector: digital cinema.

The movie industry last year enjoyed record box office grosses and soaring attendance, the international market for Hollywood films is growing by leaps and bounds and a building boom has brought more - and higher-quality - movie houses. But these gains have been countered by higher production and marketing costs, and financial problems by small and medium-sized theater chains.

Speaking at ShoWest's International Day luncheon, Mechanic quoted Charles Dickens in saying the movie industry is experiencing the best of times and the worst of times. Mechanic said Fox is responding by trying to rein in production costs, including money to the stars.

"The days of the $20 million (salary) with 20 percent against the gross may be coming to an end," he said.

Mechanic pointed out that Fox had big success with "Something About Mary" with Ben Stiller and Cameron Diaz - who before that picture didn't command top dollar. Even Leonardo DiCaprio and Kate Winslet weren't the stars that "Titanic" would make them when they were signed to the sinking ship epic, he said.

But noting that Fox has movies coming out with Jodie Foster, Tom Hanks, Tom Cruise and Leonardo DiCaprio, Mechanic said: "I'm only cautioning against the overuse and over-dependence" of expensive star vehicles.

As for budgets, Mechanic made it clear "Titanic" was an aberration, with production costs that others have estimated at more than $200 million.

"We ended up making 'Titanic' for an ungodly amount," he said. "But since then we haven't produced a single film for more than $70 million."

And this includes, he said, last summer's special effects pictures "The X-Files" and "Dr. Dolittle," both box office hits.

Suggesting that "societies are becoming far less homogeneous," Mechanic said the studio is focusing on films geared toward more focused sections of the public - families for "Dolittle," younger women for "Ever After," for instance - rather than a vague mass audience.

"You can make a movie for everyone or make a movie for someone," he said. "Obviously implicit in this is don't make a movie for no one."

And while big-budget, star vehicles still often do well overseas, he said that lower-budgeted films, even a comedy like "Something About Mary," can also score in foreign markets.

"That means that hair gel is the universal language," he said.