AFTER YEARS NEAR THE BACK OF THE HOLLYWOOD PACK, UNIVERSAL IS ON AN INCREDIBLE HOT STREAK

It's been feeling a lot like Christmas lately for Universal Pictures. With "Dr Seuss' How the Grinch Stole Christmas" acting as Santa Claus for its bottom line, Universal is cresting a two-year wave that has propelled the studio from the bottom to the top of the domestic film marketplace and left it poised to shatter its previous annual high-revenue mark. Three weeks in release, "The Grinch" continues to demolish the competition. The Imagine Entertainment film has racked up more than $135 million in ticket sales, untold millions more through various merchandising deals and shows no signs of slowing down through the holiday season. With overall ticket revenues for Universal films already above $900 million for the year and closing fast on last year's record of $934 million, these are heady days indeed at the studio. Universal executives can barely contain their glee over the phenomenal success of "The Grinch" a property that promises to continue churning up profits for years to come through annual TV broadcasts, video sales and tie-ins at Universal theme parks. But they are quick to point out that the Jim Carrey feature is far from the only reason for the studio's about-face. They say a series of successful releases in 1999 and 2000 not all of them blockbusters are responsible for helping the once-embattled studio claw its way back to the top of the Hollywood heap.

"It's been a remarkable turnaround and a substantial one," said Marc Shmuger, president of marketing for Universal Pictures. "If it happened in a single year you could say it was a fluke, but over a couple of years it demonstrates that we have built a solid foundation." When "The Grinch" debuted Nov. 17, it was the fifth consecutive Universal picture to lead its opening weekend in gross receipts, an almost unheard of streak, said Tom Borys, president of AC Neilsen EDI. Besides "The Grinch," the other films that debuted at the top of the heap on their respective opening weekends were "The Nutty Professor II: The Klumps" (which has earned $123 million to date), "Bring It On" ($67 million), "The Watcher" ($28 million) and "Meet The Parents" ($148 million). "That's a hot streak, there's no question. It's extremely rare," Borys said. "What's more impressive is that (Universal) has a chance to have five films gross over $100 million this year. They have four now and that's the most they've ever had in one year." In addition to the three movies mentioned above, "Erin Brockovich," which was released in March with Universal controlling the domestic distribution, has earned $125.5 million. The Nicolas Cage vehicle, "The Family Man," which is slated to open Dec. 22, is already drawing Oscar talk and stands a good chance to become the sixth film in Universal's top-grossing streak. Industry observers are saying the film also could reach the $100 million mark in domestic sales, which includes the United States and Canada. Together, these films could push Universal above the $1 billion mark for the first time ever. "They're on an incredible roll; they must just be pinching themselves right now," said Paul Dergarabedian, president of Exhibitor Relations, an L.A.-based box office tracking service. "They've held the No. 1 spot for 16 out of 48 weekends this year, more than anyone else." More importantly, through Nov. 26 Universal had increased its share of the domestic marketplace to 13.8 percent, Borys said, several points up from last year. Universal now trails only the Walt Disney Co.'s Buena Vista and its myriad film units for the largest share of the domestic film audience.

This year's success marks a dramatic turnaround indeed from late 1998, when Universal was at the bottom among the studios. A two-year string of failures marked by such notable flops as "Meet Joe Black," Gus Van Sant's remake of "Psycho," "Leave It to Beaver," "Babe: Pig in the City," and the forgettable "Kull the Conqueror" led to a major house cleaning that spelled the end for Casey Silver, then chairman of the movie division. Silver was replaced by Ron Meyer, who was then president of Universal Studios, and in 1999 Universal's corporate parent, Seagram Co., brought in Stacey Snider and Brian C. Mulligan to serve as co-chairs of the film division. For reasons that are hard to pin down in an industry known for its cyclical nature, Universal's fortunes began to change almost immediately. Universal officials have cited a strategic shift that took place when Silver left, with more people being brought into the process of selecting which films will be made. "They were such a maligned studio, and for a long time Edgar Bronfman was really knocked," Borys said, referring to the chairman of Seagram, the Canadian beverage giant that purchased Universal Studios Inc. in 1995. "It's not just a question of cranking out a couple of blockbusters. What you really need is consistency. That's the hardest thing to do in this business, and that's what Universal has done." Evidence of the studio's strong across-the-board performance in 2000 can be seen in the number of releases that earned less than $100 million but that nevertheless surpassed expectations and returned ample profits. Among the biggest surprises of the year was the inexpensively produced cheerleader story, "Bring It On." "That was good marketing. They opened a movie that had appeal to teenage girls in an all-boy summer," said Anderson Jones, columnist for E! Online. Shmuger said the mid-1990s down streak forced Universal to reevaluate its entire film operation. "Our turnaround has been a combination of strong movies, well-defined marketing messages and strategically timed release dates. It adds up to a very potent equation for success," he said. Jones noted that Universal's resurgence coincided with Bronfman assuming a lower profile at Universal, as the beverage mogul became increasingly frustrated with the studio's meager returns. "(Universal) really wanted to get out from under the thumb of Seagram and Bronfman," Jones said. Bronfman was not available for comment. While many Universal films have received tepid reviews in the past two years, the studio has done a good job of making movies with broad popular appeal. In 1999, those films included "The Mummy," "American Pie" and "Bowfinger," while "Bring It On," "Nutty Professor II" and "U-571" fall into that category this year. "They haven't done it based on critical acclaim; they've done it at the box office," Jones said. Of course, Universal has had its share of disappointments in 2000. "Isn't She Great" quickly disappeared from theaters after earning just $2.9 million, and "The Watcher," despite winning its opening weekend, has grossed just $28.5 million, putting both well behind production costs. Universal's strong showing could not come at a better time for the studio, which is in the process of being acquired by French media company Vivendi. In the meantime, Seagram is selling off its considerable wine and spirits empire. If the Vivendi deal goes through as expected (both American and European trade officials have given their approval), Universal would become the first major Hollywood studio under European ownership. Their other successes notwithstanding, Universal executives are looking to "The Grinch" to be the gift that keeps on giving. Among its marketing tie-ins, the film has spurred "Grinchmas," a wintry attraction at the company's two theme parks. Shmuger said Universal plans to keep the attraction going for years to come and he predicted that "The Grinch" would become the sort of holiday classic that people look forward to seeing each year. "'The Grinch' has boosted our holiday (theme park) traffic tremendously, both in Hollywood and Florida," he said. "(The film) has created terrific synergy with all our other divisions." Gitesh Pandya, editor of BoxOfficeGuru.com, said studios take a big risk when they invest in big-budget films such as "The Grinch." American audiences are fickle, and whether a film hits the jackpot or not is as much a matter of luck as anything else, Pandya said. But when a movie does click, the payoffs can be enormous. "Regardless of the cost, it's going to be a huge moneymaker," Pandya said of "The Grinch." "Worldwide, this film that cost $120 million could gross $400 million."

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