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 Jaguar News - May 1999
Congratulations Hallmark
Entertainment! - Wall Street Journal Front Page
Just as this Jaguar News was going to press, a major article appeared on the front page of
the Wall Street Journal discussing Hallmark Entertainment's dominance of the Event
Mini-series and Movie of the Week television businesses.
Jaguar is proud to have provided the back office rights management, contract
administration and accounting systems that support this phenomenal success story since
1991. In those early years, Marty DeGrazia, Senior Vice President Distribution, managed
what was in effect a single user starter system. Spectacular growth and key contributions
by Peter Von Gal, Executive Vice President/COO, Michael Carroll, Vice President
Information Systems and most importantly Tricia Riccio, Information Systems Manager have
brought Hallmark Entertainment from those modest beginnings to their present important
role as a premier member of Jaguar's System 7 Design Council.
Just as the Journal sees a rosy future for Hallmark Entertainment in the television
industry, we are extremely enthusiastic about the future opportunities to work together as
technology partners in an era where entertainment is once again at the forefront of
innovation in our society.
For your convenience, a copy of the Wall Street Journal article is available here.
Licensing 99 Free Exhibit Passes
8-10 June will mark the fourth consecutive year of Jaguar's participation as an exhibitor
in Licensing 99 at the Jacob Javits Center in New York. Eagle Merchandise Licensing
System's all new Internet Royalty Entry function will be on display at Booth 1455 in the
center of the main hall. This exciting new function eliminates the drudgery and
complications of duplicate royalty data entry forever. If you are interested in visiting
our booth and would like free passes to the exhibit area, contact Sylvia Rodriguez at
srodriguez@jaguartc.com or 626.796.1955 x204
EAGLE enables licensors to earn more money from
the success of their properties. More complex and aggressive revenue sharing plans can be
structured and automatically enforced. EAGLE
pays for itself by providing powerful royalty statement validation tools which efficiently
trap licensee calculation errors to maximize collections.
The full range of contract administration, sales management, royalty collection and
accounting activities for intellectual property management are integrated within a
user-friendly Microsoft Windows environment. EAGLE
works with ACE Revenue Accounting to form a
comprehensive licensing financial system. In addition, WRAP-UP
Materials Tracking is available to monitor, store, loan out, give away and locate product
samples and key art work to further enhance control of licensing activities.
Two of the world's largest licensors, the NBA and Children's Television Workshop anchor
the rapidly expanding multinational universe of EAGLE
system users.
Release 5.03 Official Release
This 11 May release marked the official ending of one era (16-bit Windows) and the
impending dawn of another (Release 5.5, 32-bit Windows). 5.03 will be the last major
release of the 5.0x series, with only one or two further minor maintenance releases
planned. Release 5.5 is scheduled for official release in early June, although it is
already operating successfully at a number of companies. The next issue of Jaguar News
will announce the exact date of release.
The most outstanding feature of Release 5.03 is all the new Manual Invoices functionality
originally created for New Line Cinema. For an overview, see the April Jaguar News at
www.jaguartc.com or, Jaguar clients may view the actual specification (#3312) in the
Support section of the web-site.
Section F of Jaguar News also includes a review of recent and current software
modification projects, a number of which are being included in Release 5.03.
www.jaguartc.com - New Look
Recent visitors to our web-site will have noticed that the main page has
been completely revamped to provide more current information and quicker
access to key site features.
This is only the beginning, as big plans are continuing to be refined to upgrade the value
of the site to our clients. In particular, expanded client profiles (maintained by both
Jaguar and client!) and a revamped software modification tracking system will be among the
first of many improvements over the coming months aimed at better personalizing our
services and building an increased sense of community among Jaguar users.
We look forward to any feedback and suggestions that you may have.
New BATS Film & TV Development Queries
Release 5.5 continues to provide excitement among its early adopters. The latest event is
the addition of two new tab-driven executive style queries to Bats Film & TV
Development: Titles and Participants.
The "Title Status Query" is a significant extension of the present title query
in Scoreboard Film & TV Licensing that addresses important considerations relating to
its participants. The result is a query that spans the development, acquisition, sales and
finance knowledge of that title with a few mouse clicks! In particular, three new tabs
have been added:
Attached Parties - Displays data about all participants and their deal terms for each of
their functions in the project.
Restrictions - Provides detailed information about participant rights restrictions or
potential additional fees relating to the exploitation of the title.
Participations - Shows the precise royalty payment terms that every participant has
negotiated including time limits, escalations and cross-colateralization.
The "Participant Query" is an all new query that offers a global view of an
individual or production entity over all of the titles and projects that they have ever
been involved in. It is expected to become an outstanding research tool for our clients.
The four major tabs are:
General - All of the contact, tax, loan out company, agent and attorney information in one
place.
Projects - Displays data about all participants and their deal terms for each of their
functions on all of their projects.
Restrictions - Provides detailed information about participant rights restrictions or
potential additional costs on the exploitation of all of their titles.
Participations - Shows the precise royalty payment terms that a participant has negotiated
including time limits, escalations and cross-colateralization by title.
Software Modification Update
#4269 Discovery Communications
Add a report that will list contracts and their Participant Deal Memo information.
Specification completed
#4280 Goodtimes Video
Include Barcode and Description fields in the Elements section of the Wrap-Up Materials
Tracking Purchase Order form.
Specifications approved
#4455 Hallmark Entertainment
Add the Contract Execution Date to Invoice form
Software delivered
#4853 Discovery Communications
Utility to copy Products from one Jaguar system to another
Software delivered to Quality Assurance
#4905 Discovery Communications
1. Title Length to be affected when using version of programs in sales contracts.
2. Sell different version of same title on same contract.
3. See version memo field while selecting off the title screen in a contract.
Released in Release 5.03.00
#4995 Nelvana
Add auto-populate segment option for Production Year
Specification completed
#4997 National Basketball Association
New Royalty Comparison report
Software delivered
#5034 Alliance-Atlantis Communications
Modify Contract Receivables Report to allow sort by Division
Software delivered
#5056 Discovery Communications
Capability to optionally include Materials when copying a contract
Specification approved
#5083 Nelvana
Establish Key Action Items to update contract date. (Deal Memo, Contract Prepared,
Contract Sent, & Contract Executed.)
Specification completed
#5129 Children's Television Workshop
Enhance reporting options on seven contract listing programs
Software delivered to Quality Assurance
#5184 Children's Television Workshop
Royalty Statements Delinquent Report - Add the ability to choose whether sell-off is
considered in the report or not.
Software delivered
#5285 New Line Cinema
Create PO# field on the A/R Aging Report
Released in Release 5.03.00
#5403 Discovery Communications
Set a default Disposition and Condition per Location
Specification completed
#5521 Children's Television Workshop
Allow for a customer order to be created in Wrap-Up based on Materials identified in the
Scoreboard contract, prior to the Scoreboard contract being posted
Specification approved
#5797 National Basketball Association
Add Licensee to sort options in Royalty Comparison Report.
Software delivered
#5822 Southern Star Group
Add option to Availability report that allows episodic titles to be exploded to individual
episodes in the same manner as the Time Line report.
Software delivered
May 21, 1999 THE WALL STREET JOURNAL
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Profligate Producer Helps Hallmark To Corner the TV-Miniseries Market
By KYLE POPE
Staff Reporter of THE WALL STREET JOURNAL
LONDON -- At a massive production complex on the western edge of the city, Robert Halmi
puts the finishing touches on epics that American TV viewers will be watching this season.
Mr. Halmi flits from building to building, overseeing the filming of
"Cleopatra," a lavish four-hour production for ABC that is said to be the most
expensive miniseries ever. Along with his staff of 20, he is also polishing the script for
"Don Quixote," starring John Lithgow, and building the sets for a TV version of
"A Midsummer Night's Dream." His team is also doing postproduction work on
"Arabian Nights," which just finished shooting in Morocco and Turkey, and
tweaking the special effects for "Animal Farm," based on the George Orwell
novel.
At age 75, Mr. Halmi, a Hungarian emigre, holds the distinction of being the most prolific
producer in TV history, with a film library of more than 300 hours. All told, he will
churn out more than 40 hours of prime-time fare over the next year for the Hallmark
Entertainment unit of Hallmark Cards Inc., which acquired his company in 1994 and hopes to
use his library to build a much larger entertainment empire.
With so many channels scrambling for viewers, and ratings for network sitcoms and dramas
continuing to plummet, Mr. Halmi's big-event programs, such as "Merlin" and
"The Odyssey," are coveted by the big networks as sure-fire attention-grabbers.
Though sometimes ravaged by critics -- Howard Rosenberg, TV
critic of the Los Angeles Times, branded "Noah's Ark" "a laughably bad,
stunningly low-burlesque, excruciatingly slow two-parter" -- his epics draw in the
viewers. More than 30 million people watched all or part of "Noah's Ark" for the
two nights it ran earlier this month, making it the No. 2-rated show for the
week, behind "E.R."
Before the explosion of cable TV, networks would readily spend tens of millions of dollars
on a single miniseries like "Roots" or "Shogun." But now, with a
smaller slice of the advertising pie going their way, the networks can ill afford to
launch such elaborate productions on their own. So they hire outside
companies like Hallmark Entertainment, which agree to carry much of the financial risk of
producing a star-laden TV spectacle.
A $28 Million Spectacle
For example, in the case of "Merlin," the most-watched miniseries on NBC last
season, Mr. Halmi charged the network $12 million, then delivered an epic with big-name
stars like Martin Short and Isabella Rossellini, filmed in exotic locales around the
world. Final budget: $28 million.
For this Sunday's "Cleopatra," Hallmark Entertainment was paid about $13 million
by ABC. But Mr. Halmi spent nearly $30 million, hiring "Titanic" co-star Billy
Zane to play Marc Antony at a cost of $2 million and building a quarter-mile-long replica
of Alexandria in the Moroccan desert.
In fact, Mr. Halmi's formula, though a departure from the typical Hollywood business
model, is fairly simple. Mr. Halmi goes into lavish productions knowing they will lose
money in the U.S., gambling instead that he can recoup part of his budget through
extensive international and video sales. To help attract
those overseas audiences, all of his pictures feature international stars and European
locales. Last year, "Merlin" was the best-rated TV movie ever in Germany, Spain
and England.
Profits Overseas
Because Hallmark Entertainment retains the rights to the movies it sells to the networks,
it is able to sell them overseas and keep the proceeds; overall, less than half of its
revenue comes from the U.S. In the case of "Animal Farm," which is budgeted at
$23 million, Time Warner Inc.'s TNT is paying for 40% of the film
in exchange for the U.S. television rights. Hallmark, meantime, is releasing the movie in
theaters in Europe in July, helping to defray about $10 million of its part of the cost.
Finally, Mr. Halmi negotiated significant tax breaks for the film by shooting it in
Ireland and saved money on actors because the film's biggest stars are mechanical animals.
In the end, all of Mr. Halmi's big miniseries have made money for Hallmark, say Mr. Halmi
and his son, Robert Halmi Jr., 42, who together run the Hallmark Entertainment division as
chairman and chief executive, respectively. Irvine O. Hockaday Jr., chief executive
officer of privately held Hallmark Cards, declines to discuss the entertainment division's
finances, but says Hallmark Entertainment makes a profit. (Mr. Hockaday is a director of
Dow Jones & Co., publisher of The Wall Street Journal and the Interactive Journal.)
Mr. Hockaday, who admits that he is no Hollywood insider, says he has given the Halmis
free rein to run Hallmark Entertainment on their own. "I've heard people say Hallmark
just must be throwing money away," Mr. Hockaday says. "People tend to look at
this from the point of view of a public company. We tend to try to build for long-term
value."
Hallmark Entertainment helps bankroll Mr. Halmi's big-budget projects by churning out a
number of less-costly but profitable TV movies. While Mr. Halmi's pricey epics get all the
attention in Hollywood, they actually account for only about 20% of Hallmark
Entertainment's output. The bulk of Hallmark
Entertainment's movies, most of which are overseen by Mr. Halmi Jr. and other
producers, are much cheaper and make much more money in the U.S., in effect subsidizing
the marquee projects until overseas revenues are realized.
Viacom Inc.'s Showtime, for instance, has made more than 80 films with Hallmark, none of
them huge ratings-grabbers. Hallmark has a children's programming division that produces
animated shows for cable. And its "Hallmark Hall of Fame" series churns out
highly rated but relatively cheap movies such as last year's "What the Deaf Man
Heard" and "To Dance with the White Dog" on CBS.
Deep-Pocketed Partner
In Hallmark Cards, Mr. Halmi also gained a deep-pocketed corporate partner with a strong
incentive to promote his productions. With the greeting-card business mature and under
attack from the Internet, the Kansas City, Mo., company recently launched three cable-TV
channels that depend on the Halmi library.
"They want to transition themselves from being primarily known as a card
company," says Margaret Loesch, a longtime executive with News Corp's Fox network who
was recently tapped to run the Odyssey Channel, a Hallmark cable venture co-owned with Jim
Henson Co. "This is definitely the end game."
Hallmark Entertainment also has developed a growing business in Broadway shows, helping to
produce "The Scarlet Pimpernel," "The Sound of Music" and
"1776," and it is on the lookout for projects from Mr. Halmi that can be
translated to the stage. Soon, Hallmark stores around the country will begin selling Mr.
Halmi's movies on video.
One reason for Mr. Halmi's domination of the miniseries-production business has been a
dearth of competition. But the networks, worried that he has developed a monopoly, are
beginning to fight back. ABC balked at a planned three-hour version of "South
Pacific" with Glenn Close because network executives thought Mr. Halmi's asking price
was too high. The networks are beginning to look for
alternatives: General Electric. Co.'s NBC, for instance, has vastly beefed-up its own
in-house TV movie unit; among its big hits was the recent miniseries "The '60s."
ABC has begun airing TV movies developed by its parent, Walt Disney Co. makes its TV
movies without depending on Mr. Halmi at all.
Mr. Halmi, for his part, dismisses the networks' ability to produce quality miniseries on
their own. "Everything the broadcast networks thought they do well is now on cable,
and it's better," he says. "I offer at least something different." He adds:
"I tell them, 'You guys are always underestimating the intelligence of the American
people.' "
As a result, he has made it his business to make prime-time hits out of the most literary
of subjects. In addition to bringing Homer to Americans' living rooms in "The
Odyssey," he has produced TV versions of "Crime and Punishment," "Moby
Dick," "Gulliver's Travels" and this year's "Alice in
Wonderland," with Martin Short.
Dramatic Life
Born in 1924 in Budapest, Mr. Halmi was the son of a playwright mother and a father who
was the official photographer to the Vatican and the Hapsburg empire. After the war, he
says he worked in Hungary for the U.S. precursor of the Central Intelligence Agency. In
1947, he was put on trial by the Communists for blowing up bridges and was sentenced to
death. He says he was saved only after his father arranged to have him kidnapped: He was
given a bicycle to get to the Austrian border, and escaped from Hungary by hiding in a
potato truck.
For a time, he continued his intelligence work in Salzburg, helping to spread American
propaganda in Eastern Europe. His travails were chronicled in a seven-part series in the
Saturday Evening Post called "Trial by Terror," which was later made into a
movie for 20th Century Fox.
He came to the U.S. in 1950 with a camera and little else. Borrowing from his father's
legacy, he ultimately landed a job at Life magazine as a photographer. He developed a name
for himself in adventure photography. After seeing a stunt man at a county fair climb into
a box and blow himself up with dynamite, Mr. Halmi replicated the trick, setting up a
camera to capture the moment. In another act of derring-do, he was airlifted onto a
glacier to take pictures, only to have the glacier break and drift off, leaving him
stranded from the mainland for 10 days.
Getting Into Showbiz
He left Life magazine when it folded in the mid-1960s and moved to California, where he
used his photography contacts to get into the movie business, filming a documentary about
an African tribe. He then raised money to produce a TV movie based on a Hemingway short
story, "My Old Man."
His business took off in the 1980s with a string of hits leading up to 1989's
"Lonesome Dove" for CBS. In 1994, he produced a miniseries version of
"Scarlett," the "Gone with the Wind" sequel for which Mr. Halmi paid a
then-unheard-of $9 million for rights to the book.
Today, his unorthodox upbringing shines through in his work. He shot "Crime and
Punishment" in Budapest because of his fondness for the city, and made "Animal
Farm" because he had read and reread the book when he was in prison in Hungary.
"That book almost saved my life," he says of the allegorical story about the
failures of communism. "It told me there was hope out there."
Mr. Halmi, who walks with a cane since breaking his hip last year while scouting for
locations for "Crime and Punishment" in Hungary, keeps up a frenetic pace,
sleeping no more than four hours a day. He lives primarily in London, but has homes in New
York and Kenya, as well as a houseboat in Spain, which he loans out to stars as an
incentive to do his movies.
The Micromanager
Unlike other producers, who hire actors and directors but don't bother with the details of
their projects, Mr. Halmi is a micromanager. During a recent 10-hour workday, he picked
out the T-shirts for the crew of "Cleopatra," ordered a set of 2,000-year-old
coins used by Julius Caesar for the major stars (they cost
$600 apiece), and reviewed set designs for "A Midsummer Night's Dream." He even
auditioned a dog to star in a coming epic for NBC. Told by the dog's owner that the mutt
would be neutered before shooting began, Mr. Halmi intervened, saying he thought it was
inhumane and that he would refuse to hire the dog if the procedure was done.
Mr. Halmi has his own watchdog: his son, whom he calls Robbie. The pair talk twice a day
and own homes next door to one another in a suburb of New York City. The senior Mr. Halmi
admits that their relationship is somewhat reversed, with the father spending as much
money as possible and the frugal son reining him in.
"He's sort of playing the crazy cop, with me playing the sane cop," says Mr.
Halmi Jr. "He likes to just go out and say it's going to be the greatest show of all
time, and it's going to be very expensive. Then I come in and work it out in the
trenches."
His father is currently planning an eight-hour version of the Bible, complete with a
"Star Wars"-style beginning of the universe, as well as "10th
Kingdom," a 10-hour miniseries to be shot in New York and Europe that encompasses
nearly every children's fairy tale into a single story. Hallmark Entertainment is
getting paid $24 million by NBC for "10th Kingdom," a record for a miniseries.
And, Mr. Halmi says, he will spend at least $20 million more before the show makes its way
to television. |
