WARNER'S TWO BATTLEFRONTS : Can Batman Help Warner? : The studio is looking for a blockbuster. Enter the Caped Crusader.

By MICHAEL CIEPLY

June 23, 1989 12 AM PT

<i> Times Staff Writer</i>

The Warner Bros. movie operation has just about everything. Crackerjack marketing. Warm relations with film exhibitors. Videocassette and foreign sales machinery that just won’t quit.

In fact, the only thing missing is a hit.

While Warner Communications’ brass fights to lock up the parent company’s sale to Time Inc., managers at the Burbank-based film unit have their eyes fixed on this weekend’s opening of “Batman.” Clearly, they hope that the darkly sophisticated comic book extravaganza will end a 2-year dry spell that has, by some reports, taken a toll on studio morale and perhaps even put some jobs in jeopardy.

“Honey, get ready for the rain to come. This is going to be the largest hit of the year,” said “Batman” co-producer Jon Peters on Wednesday of his film, which has been boosted by a massive pre-release publicity and merchandising campaign.

“If it doesn’t work, you’ll see a whole new (management) group here,” another producer with ties to Warner predicted, however--apparently reflecting a make-or-break mood that set in around the “Batman” opening.

Terry Semel, the studio’s 46-year-old president and chief operating officer, dismissed the talk of a slump during a telephone interview Thursday. “We started the year off, we thought, on a high note,” said Semel, pointing to the studio’s 23 Academy Award nominations, most of them for “Dangerous Liaisons” and “The Accidental Tourist.”

Semel particularly disavowed the notion that he or production president Mark Canton, 40, who is largely responsible for “Batman,” may have their jobs on the line. “We don’t have a bad year, and all of sudden replace the whole team,” he said, pointing to Warner’s success over an 8-year span with an executive team assembled by studio chairman Robert Daly, who left CBS to join the company in 1981.

Rarely a studio to shoot for the blockbuster, Warner has had only four films--”Gremlins,” “Superman,” “Superman II” and “The Exorcist”--that have topped $100 million at the U.S. box office. More often, it has made its money from bread-and-butter movies such as “Tequila Sunrise,” “Police Academy,” and the Dirty Harry series, which perform respectably at home, then go on to clean up in foreign and videocassette markets where Warner has a reputation for working a bit harder than other studios.

Lately, however, the company has been plagued by a string of films that did poorly enough in theaters to become an embarrassment in Hollywood circles, if not a serious threat to Warner Communications’ profits.

Of 24 movies released in 1988, only one--”Beetlejuice,” which grossed about $75 million--clearly topped the $40 million-mark, while 10 films took in $10 million or less at the box office, and some high-profile bets such as “Everybody’s All-American” and “Arthur 2” also did poorly.

This year, Clint Eastwood’s “Pink Cadillac” has turned into a major disappointment, and the studio has maintained its No. 4 spot in share of box-office receipts with 11.7%, according to a June 7 report in Daily Variety by analyst Art Murphy. That is partly because it had 17 films in release, compared to just six for Paramount, the market leader.

Some Losers Acquired

“Their movies clearly have not lived up to expectations domestically,” said Dennis McAlpine, an entertainment analyst with Oppenheimer & Co., a New York securities firm. McAlpine and others point out that Warner has continued to do well abroad, however. “Frantic,” “Full Metal Jacket,” “Innerspace” and “Cobra,” for instance, all did substantially more business outside the United States than at home.

Warner’s box-office track record was also affected somewhat by acquisition of movies in its merger with Lorimar. Those films included some winners, such as “Dangerous Liaisons” (which Semel says Warner had agreed to finance even if the merger didn’t go through), and some losers, such as “See You in the Morning” and “Bert Rigby, You’re a Fool.”

The company’s film entertainment division, which doesn’t separate movie and TV results, reported 1988 operating income of $203 million, up 15% from $176 million in 1987. About two-thirds of the parent company’s profit came from its music, cable and publishing operations.

Murphy, a longtime box-office observer, attributes much of Warner’s trouble to a good luck-bad luck cycle that seems to afflict virtually all studios in turn. “Everybody goes into eclipse for a time,” he said.

Warner’s dip, he added, comes into unusually high relief just now because rivals such as Paramount, with “Indiana Jones and the Last Crusade,” and Columbia, with “Ghostbusters II,” happen to be cashing in on big sequels, while Warner’s steadier course has left fewer blockbusters to trade on.

Still, some Hollywood deal makers have said that Warner’s very stability--cultivated as an article of management faith by the 52-year-old Daly, who is averse to the rapid-fire job changes that afflict some studios--has begun to clog the company’s arteries with unproductive relationships and projects.

Extensive Web of Producers

“They’re in total gridlock. The indecision can be maddening,” said one veteran film producer who has dealt closely with the studio, but declines to be identified for fear of jeopardizing his relationship.

A frequent complaint is that Warner “overdevelops,” keeping more than 200 projects on its development list, compared to roughly half that many for studios such as Universal, Fox and Paramount.

At the same time, the studio has an extensive web of producer relationships--Jon Peters and Peter Guber, Clint Eastwood, Lee Rich, Richard Donner, Joel Silver and others have Warner deals--which leads to yet another tier of development, and more gridlock as film makers spend months or even years competing for spots on the release schedule.

Semel stoutly defends the large development pool as “the backbone” of Warner’s film business, since it protects the studio from the need to purchase expensive film packages assembled by Hollywood agencies or outside producers. “Batman,” he contends, was in development at Warner for about nine years, but is no less valuable for having spent all that time in the system.

Yet even Peters, one of the Warner team’s stoutest defenders, noted that the studio could have ended its dry spell sooner if it had been willing to fund “Rainman,” which his production company ultimately took to United Artists. “It should have been at Warners. We offered it to them, but they just didn’t see the picture,” he said.

In any case, the lean times could well end with “Batman,” which some analysts say could conceivably break the $29.5-million opening weekend box office record (for three days, with no holiday) set only a week ago by “Ghostbusters II.”

“Oh, it could happen, particularly if the screen count keeps going up,” said Exhibitor Relations Co.’s John Krier, a box-office consultant who expects the movie to open on over 2,000 screens.

“It’s silly to make predictions,” said Semel. But, he added: “The signs are all there. . . . If I were a predictor, I’d say we have a shot at the crown. We all believe we have a real shot at it.”

NO SCREEN GEMS

Over the past three years, no Warner Bros. film has grossed over $100 million domestically. Figures are U.S. box-office receipts to date in millions of dollars.

1989

Warner Bros. Top 3

Lean on Me $30

Her Alibi 17

Pink Cadillac 10

Year’s Top Hits

Indiana Jones (Paramount) 122

Beaches (Disney) 54

1988

Warner Bros. Top 3

Beetlejuice $74

Tequila Sunrise 40