Made In Hollywood Chapter 35: Still Strapped for Cash

"Our conditions are not complicated."

Sitting alone across from several Fox executives, Nancy Josephson didn’t seem the least bit pressured. Even though among them were Fox heavyweight Thompson Rossman and renowned producer Jon Landau, she remained calm and composed as she continued, "Mr. Rosenberg’s total fee for directing and writing is $4 million, and he will also serve as the film’s producer. The final cut must be primarily based on his opinion."

She calmly surveyed the faces of those across the table before continuing, "Mr. Rosenberg requests to hold at least a one-fifth share in the film’s investnt and to enjoy an equal portion of the profits."

As Nancy Josephson listed the terms one by one, the expressions of the Fox team grew increasingly stern.

This was just the initial negotiation, with both sides testing each other’s limits. The talks didn’t last more than half an hour before ending in dissatisfaction from both sides. Neither Duke’s agent nor Fox were happy with the outco.

After the eting, the short, stout Jon Landau walked into Thompson Rossman’s office.

"Jon..."

The CEO, seated behind his desk, maintained a neutral expression. "What do you think?"

Jon Landau, who looked sowhat comical squeezed into the chair, was one of Hollywood’s top producers. He supported his argunt by listing data, "The script passed the review committee unanimously, and the risk assessnt and market research departnts rated the project’s initial investnt index as Grade A. The distribution departnt’s profit projection is also Grade A."

He continued, "The script carries over the thrilling, explosive, and intense style of ’Speed’ to so extent, but with deeper emotional thes. Duke Rosenberg has already proven he excels at this type of material..."

"The most important thing..." After a brief pause, he solemnly added, "Although Duke’s directing career has only just begun, it’s clearly on an upward trajectory. Films by directors in this stage are often of great value, and based on Hollywood’s past experience, his chances of success far outweigh the risk of failure."

"So, you’re saying this film is very likely to be profitable."

Hearing Thompson Rossman’s words, Jon Landau slowly nodded his heavy head, "Yes. With action films in vogue right now, our departnt’s evaluations suggest that if the film can match the quality of ’Speed,’ there’s a 60% chance it will be a major success, and its North Arican box office could very well surpass ’Speed.’"

"Fifty million dollars is a big number, but it’s not insurmountable for Fox." A glint flashed in Thompson Rossman’s eyes. "I want to maximize profits, but now soone wants to step in and take a fifth of it!"

His voice grew sharp, "Jon, do you think Fox should share with him?"

"We could raise his directing and writing fees," Jon Landau replied without hesitation, "and let him back down on the other demands."

anwhile, Nancy Josephson got into her car and pulled out a bulky mobile phone to dial Duke.

"How did the talks go?" Duke asked, putting down his packed luggage and taking the cordless phone from Sophia in his North Hollywood apartnt. "Did Fox fully agree to your terms?"

"Unfortunately, I don’t co with a magic charm for that."

Nancy borrowed a joke Duke had once made and then shifted to a more serious tone. "From what I observed, the request for an investnt share seems to have crossed a line for Fox. Duke, you need to be prepared; this is going to be a tough negotiation."

"Nancy..."

Switching the phone to his other hand, Duke lightly tapped his forehead. "Don’t cut off contact with the other studios."

Fox was his first choice, but not his only one. Even though his capital was limited at the mont, he had just directed a film that grossed over $130 million in North Arica. With Fox pushing "Speed" into the European market, the global box office had exceeded $200 million.

That should be enough to attract the attention of so production companies.

After the call ended, Duke handed the cordless phone back to Sophia. Following her into the large, nearly empty living room, he glanced around and rubbed his chin.

"Should I buy so more furniture and decorations?" he asked, looking at Sophia’s slender fra.

"Let remind you," Sophia said as she sat down on the couch and opened a folder. "Duke, you need to cut your expenses. Otherwise, you’ll soon find yourself in debt."

"What?" Duke widened his eyes in disbelief. He had just received a $400,000 share of the profits.

"I have a list of your recent expenses, plus necessary ones for the coming weeks. Want to hear it?"

Seeing Duke nod, Sophia kept it brief. "After the profit share ca in, your accountant David withheld $100,000 for taxes. Of the remaining funds, $30,000 went to legal and accounting fees; $20,000 was paid to Nancy since she was only involved in the post-production of ’Speed’; the rent for your luxury apartnt is $20,000 per year; you’ve prepaid $15,000; placing ads in newspapers and with the Writers Guild to recruit screenwriters cost $5,000. I’ve already interviewed several writers..."

Sophia paused to take a sip of water before continuing, "Once you decide on a screenwriter, you’ll need to pay part of the fee upfront. I’ve set aside a $5,000 budget for that. Joining the Writers Guild costs $3,000, and registering two scripts with the Guild for five years will cost $8,000. If you want to join the Directors Guild, you’ll need to prepare another fee."

"And," Sophia went on, "you’ll soon be eting frequently with top executives from major film companies, so you’ll need custom business suits..."

After listening to the long list of numbers, Duke had only one thought: he was still a poor man.

"Hmm... and you want to register a film studio in Delaware, which will also cost a significant amount," Sophia added, ignoring Duke’s growing distress. "Although Aunt Leah’s $10 million has been received, it’s strictly for movie investnts."

Rubbing his forehead, Duke sat beside Sophia. "So there won’t be much left of the $300,000 after taxes?"

"Correct. In fact, there won’t be enough!" Sophia glanced at him before offering a suggestion, "Here’s a piece of advice: apply for a loan from the bank. With your current fa and status, it shouldn’t be hard to get a loan of $300,000 to $500,000."

"Is it really necessary?" Duke asked, looking at her seriously.

"It’s advice from both your accountant David and Aunt Leah," Sophia said with a shrug.

After getting a loan from his mother, Duke had been planning to set up a shell film studio. He was already in touch with a professional company in Delaware to handle the details. Even though the shell company would have no official staff and would share an office with other shell companies, it would still require a hefty sum to set up.

The reason for setting up the studio was simple: tax avoidance. Investing in films under a company’s na offered significant tax benefits. And why Delaware and not California? California’s crushing tax rates were notoriously outrageous, while Delaware not only had the world’s most specialized equity court but also boasted the lowest business taxes in the U.S.

This was why companies like Disney, Apple, and Paramount were all officially registered in Delaware.

After a brief mont of thought, Duke decided to apply for a bank loan to solve his imdiate financial problems.

"Oh, by the way, Sophia."

After a few words about the loan, Duke rembered sothing else. "Have you found a suitable cinematographer as I asked?"

He was never one to shy away from leveraging his connections when necessary. Since he had so ties to the Coppola family, he wasn’t above using them.

"I ntioned it to my dad, and he recomnded soone."

Sophia’s face wore an expression that clearly said Duke owed her a favor. "John Schwartzman, thirty-two years old, from a family of filmmakers, graduated from USC’s School of Cinematic Arts, and currently working in the advertising world. He’s related to us—Nicolas’s cousin. Dad thinks he ets your... requirents for shooting visually striking scenes."

"Can we arrange a eting with him when he’s available?" Duke asked, thinking that anyone recomnded by Francis Ford Coppola was bound to have so talent.

"He’s in New York right now, shooting a comrcial for a lingerie company." Sophia jotted it down in her notebook. "I’ll set sothing up when he’s back in L.A."

"One more thing..." Duke walked over to the bookshelf, retrieved a VHS tape, and handed a business card to Sophia. "Send a reply to Zack Snyder. Let him know I received his tape, and if he’s available, he can co to L.A. for a face-to-face eting."

If he could secure enough creative control over his second film, and if these people t his needs, he’d certainly consider using them. After all, these could be the core mbers of his future production team.

There was also producer Robin Grand and editor Mike Dawson, both of whom had worked with him on his first film. They had proven to be capable, and Duke would like to bring them onto his second film if he had enough say in the matter.

But that would depend on how negotiations between Nancy Josephson, Fox, and other studios played out. Duke knew that this was the ideal scenario, but wresting control from a studio was going to be a challenge—one that he wasn’t quite equipped to handle yet.

In the afternoon, Duke t with several screenwriters that Sofia had initially interviewed at a café. After careful consideration, he ultimately selected a male screenwriter specializing in war dramas and a female screenwriter who excelled at writing lodramatic love stories.

Three days later, Nancy Josephson relayed the outco of the second round of negotiations with 20th Century Fox, which was highly disappointing.