Fox Studios mixes it up

Mar 31, 2003  •  Post A Comment

Tom Mix, the biggest star in American silent films, once stabled Tony the Wonder Horse in the nondescript wooden building in the center of 20th Century Fox’s crowded West L.A. lot. After 300 movies shot on perishable nitrate film stock, most of which has been lost, Mr. Mix’s career galloped off into the sunset when talkies arrived.
Today the renovated barn, with the same high ceilings and exposed wooden beams, is home to a business as modern as Mr. Mix was old-fashioned, as flexible as he was one-dimensional and as clever about the future as using nitrate film was shortsighted.
Fox Studios doesn’t fit the usual mold. Throw out the organization charts and forget about CW, which dictates entrepreneurial entities cannot successfully thrive within giant corporations. It is a cauldron of ideas stirred by President David A. Grant, which underscores Fox’s legacy and unlimited future potential. In its first six years it has played midwife to hits such as Malcolm in the Middle, F/X’s The Shield and Fox’s Bernie Mac and Temptation Island, which is selling in local versions worldwide.
“I’m trying to get the best creative minds to come up with the best ideas,” Mr. Grant said. “I feel I can reach out to the most diverse communities, all over the world, and that’s how new ideas like The Shield come along.”
After training as an attorney, Mr. Grant joined Fox and played a role in launching BSkyB, acquiring Star TV Asia and negotiating sports and movie output deals. He left Fox in 1995 to run a showy joint venture of Baby Bells cobbled together by Michael Ovitz, then at CAA, which was going to challenge cable TV. Instead, it fell apart within two years, leaving Mr. Grant unemployed and determined not to get caught in any more corporate mazes. “The thing that I thought was creatively stifling in the ’90s were companies which were set up as grand pyramids with all the power at the top,” he said. “It didn’t let the creativity out.”
So in 1996, when News Corp. President Peter Chernin asked what he planned to do next, Mr. Grant suggested a kind of internal venture capital unit.
He credits Mr. Chernin and Rupert Murdoch for backing an idea that wasn’t universally popular. “It’s hard for a company the size of News Corp. to deal with this,” Mr. Grant explained. “It’s hard to explain to Wall Street. It’s really part of an ancillary television business. I like to say it is kind of like what Miramax is to Touchstone, but I’m no Harvey Weinstein.”
While the studio still has its traditional businesses-making and distributing movies and TV programming-Fox Studios lives nicely right alongside them. Under Mr. Grant it creates, acquires and invests in businesses that don’t fit under the usual umbrella. “Sandy Grushow [president of Twentieth TV] is one of our customers,” said Mr. Grant, but so are many non-News Corp. companies such as Disney, Animal Planet, A&E and CBS.
At present the Fox Studios lineup of companies includes Fox World, which takes formats such as Temptation Island and resells them around the world as well as doing local production in Australia and elsewhere; Fox Alternative Productions, which in addition to The Shield created such shows as the PBS series American Family; Foxstar, which taps into pop culture and does Hollywood nonfiction such as the Biography series for A&E; Fox TV Pictures, run by industry vet David Madden, which makes high-concept MOWs such as the Robert Kennedy biopic and the Baywatch reunion movie; NHNZ, based in New Zealand, an acquisition that produces cultural nonfiction, including shows on wildlife, science and history; and Regency Television, a joint venture with billionaire L.A. Confidential producer Arnon Milchan, responsible for Malcolm, Bernie Mac and this season’s John Doe.
Fox Studios is also tapping into the exploding DVD market. For instance, it acquired the right to make Home Alone 4 as a direct-to-video title for about $6 million. The company sold it as an MOW to ABC, and at Christmas will market it hard to home video.
As a division, Fox Studios does not break out any revenue or profit figures. However, Mr. Grant said it is profitable and is counting down the days until the next big bonanza hits. Regency and Fox Studios will both share in the syndication of Malcolm in the Middle, which is expected to produce a $500 million bonanza for everyone involved.
Each entity operates with tremendous autonomy, while getting financial support and consultation from Fox Studios, which keeps a close eye on the bottom line. The company’s strength is that it can feel small in a big organization. “We’re the little guy,” Mr. Grant said. “We have an underdog mentality. That helps us.”