Forbes on Hollywood

Seth Lubove, chief of the Forbes L.A. bureau, visits the set of the forthcoming Howard Hughes biopic, The Aviator, and profiles the film's bankroller as a symbol of how movies get made today.

Graham King personifies the new economics of Hollywood (or the next generation of suckers, depending on how you look at it). The average cost of a movie has reached $90 million ($59 million for production, $31 million for marketing). The eight big studios--where most projects still originate--now look to outside partners for three-quarters of the 220 or so films they release each year, up from half their output in 1980. Never mind that they keep the surest bets and most promising projects for themselves. Warner found outside investors for 20 of its 26 movies last year. MGMnow brings in partners for all movies that cost more than $25 million, saving sequels (mainly the James Bond series) for itself.

Scrappy independents like King have stepped into this risky void, and these days they are betting ever larger sums on budget-busting epics that once were the sole province of Big Hollywood. "Graham is one of those guys who's willing to roll the dice with high-profile pictures that ordinarily may not be green-lit by a studio," says Gary Barber, cofounder of Spyglass Entertainment, which helped bankroll such hits as The Sixth Sense, Bruce Almighty and Seabiscuit....

King isn't so much an auteur as a peddler, building his company, Initial Entertainment Group, by shrewdly bidding a few million bucks for foreign rights and clearing a small profit months later by chopping up distribution rights and reselling them for individual markets up front before the films are finished.