Moore's Law at the Multiplex

Edward Jay Epstein has been milking his new book The Big Picture: The New Logic of Money and Power in Hollywood with a consistently interesting Slate column on the financing and economics of contemporary movies. In the current installment, Epstein reviews the the controversy over Disney's alleged attempt to suppress Fahrenheit 9/11 last year, and reveals that there was even less to this tale of corporate censorship than met the eye at the time. The real challenge for the House of Mouse wasn't how to keep the film from general release, or even how to separate Disney from any involvement in the release, but how to get a share of what were widely expected to be the film's boffo profits without being obviously involved:

Disney had some experience dealing with Miramax's hot potatoes. Rather than distributing the controversial Kids and Dogma, Disney allowed Miramax founders Harvey and Bob Weinstein to buy the films back and set up short-lived companies to distribute them. But those potatoes were as small as they were hot. In the case of Fahrenheit 9/11, Eisner wasn't about to let the windfall escape into the Weinstein brothers' pockets. Nor could Disney take the PR hit that would result from backtracking and distributing the movie itself.

Eisner's solution: Generate the illusion of outside distribution while orchestrating a deal that allowed Disney to reap most of the profits. Here's how the dazzling deal worked. On paper, the Weinstein brothers bought the rights to Fahrenheit 9/11 from Miramax. The Weinsteins then transferred the rights to a corporate front called Fellowship Adventure Group. In turn, that company outsourced the documentary's theatrical distribution rights (principally to Lions Gate Films, IFC Films, and Alliance Atlantis Vivafilms) and video distribution rights (to Columbia Tristar Home Entertainment).

There's some stuff that isn't totally clear in the article—namely how Disney still had access to the profits after selling the rights. But the upshot is that, thanks to higher-than-usual net profits, Disney pulled in $78 million, of which it had to pay $21 million to Michael Moore: "After repaying itself $11 million for acquisition costs, it booked a $46 million net profit, which Eisner split between two subsidiaries, the Disney Foundation and Miramax."

At the height of the distribution controversy, Brian Doherty saw through Moore's censorship bellyaching and predicted the film would make big bucks. But it would have taken Nostradamus himself to foresee that even the censor would end up making money on the deal. In retrospect, it looks like the only loser in the Fahrenheit 9/11 story was John Kerry.