Solving the ‘Guy’ Mystery Part 1: 100 Films & A Funeral

I always keep multiple VDO research projects going and this one is perhaps one of the more tantalizing ones that has kept me going ever since 2003 when I was first able to get a copy of ‘Guy’ on an Asian VCD and watch it and begin struggling to absorb it (if you’re not one of the lucky few Americans who were able to catch it’s recent run on the Sundance Channel, let me be the one to say it: ‘Guy’ really is *that* interesting, and I mean ‘interesting’ in the way Stanley Kubrick once purportedly said to VDO about acting that “it’s good to be good, but it’s better to be interesting”.

So in a multi-year quest to figure out who in the USA owns the home video rights to ‘Guy’ (so we fans know who to bombard with requests), I present Exhibit A.

100 Films & A Funeral by Michael Kuhn

This is the 2002 hardcover edition of “One Hundred Films And A Funeral” by Michael Kuhn. This book covers the rise and fall of Polygram Filmed Entertainment (PFE), the studio that ultimately released ‘Guy’.

First a bit of background on Michael Kuhn and PFE. Kuhn is a British intellectual property lawyer (so I can easily relate to his storytelling ‘style’ as I am an American IP lawyer too but I am not actively practicing right now). Kuhn went to work for PolyGram in the 1970s back when it was basically a big record company. Even then PolyGram had a strange form of structure for it’s business venture — Polygram was and to the best of my knowledge still is a joint venture between the Dutch corporation Phillips and the German corporation Siemens. So any ventures Polygram engaged in (like selling recorded music) basically had to be approved by two different corporate management structures.

As a music company in the 1970s, PolyGram had two wildly profitable ventures: the soundtracks to ‘Saturday Night Fever’ and ‘Grease’. There was however a problem of being too successful with both these soundtracks in that when most American buyers had already bought their household copy of each, the US record stores which sold them were operating under a ‘sale or return’ agreement which essentially allowed the stores to ship back all the *millions* of unsold copies in exchange for other records PolyGram had released and PolyGram’s management not foreseeing that the demand for all those LPs in the USA (not to mention the recession in the US economy at which time all record companies were struggling) wasn’t limitless had to take back a lot of LP soundtracks they had made (this is one advantage to music ventures like iTunes — minimal production expenses and no unsold inventory). However from the Phillips side of the business came a new invention that would save PolyGram’s financial bacon — the audio compact disc. So in the mid 1980s Polygram was able to turn it’s balance sheet around.

PolyGram at one point first got into the US movie business in 1977 when it bought Casablanca Records which happened to be attached to Filmworks (Filmworks was a company run by Peter Guber who now holds himself out to be an ‘expert’ on the movie business on the US cable channel American Movie Classics — he co-hosts the show ‘Sunday Morning Shootout’ with Variety magazine’s Peter Bart). From people I know personally who worked for Casablanca or Polygram Records at that time, Casablanca was headed for a financial fall — there was widespread mismanagement, heavy drug usage, and most of their ‘talent’ (i.e. Donna Summer and The Village People) was making disco records (the odd exception whose popularity outlasted the disco fad was the band KISS).

Other than ‘An American Werewolf In London’, PolyGram Pictures made no commercially successful films in it’s initial 7 films (and worse, the lion’s share of the money went to ‘Werewolf’ director John Landis). So PolyGram Pictures essentially folded in 1982 (although the PolyGram joint venture got tiny royalties for ‘Flash Dance’, having sold the film rights to Paramount and the ‘Flash Dance’ soundtrack was released by PolyGram Records and a very small piece of the first ‘Batman’ movie, which Peter Guber took from PolyGram to Warner Brothers when he and Jon Peters — Barbara Streisand’s former hairdresser — moved on to more established movie studios and more profitable movie making opportunities).

PolyGram got itself back into movie making through a back door and yet another innovation – music videos on home video cassette. PolyGram Music Video pioneered the idea of ‘selling through’ its music video cassettes to the general public at a generally affordable price while the rest of the Hollywood studios home video divisions focused on keeping the prices of their video tapes high so only rental shops could afford to buy them. Kuhn having been around for this success and also having had the record company model of doing business to guide him began to buy options on the output of ‘movie labels’ or small companies that already had the creative management in place and were making low budget films, placing them on budgetary constraints but otherwise leaving creative control up to them. Kuhn and PolyGram being outsiders to the Hollywood studio model of doing business (Kuhn was based in London) ingeniously sought to control *WORLD-WIDE* marketing and distribution of films. At this time American movie studios weren’t all that convinced they could make much money on movies shown outside the USA, so they didn’t think too hard about selling off the rights to their movies to either theaters or home video beyond the USA, Canada and Mexico.

So PFE did the following things ‘right’

1) They thought globally
2) They left creative control with the creatives but kept tight control of their film budgets ($16 million was the largest budget for their late 1980s-1991 films)
3) They used home music video and recorded music profits to fund their start in the movie business
4) They looked for multiple streams of revenue – i.e. theatrical distribution, cable/pay TV distribution, and home video distribution
many of which came as new technologies were developed

In those early days, PolyGram Filmed Entertainment struck up partnerships – with Propaganda Films of Los Angeles, with Working Title Films of London and finally with Jodie Foster’s Egg Pictures. The US film division came to be known as Grammercy Pictures but it was to respond to the head offices of PFE in London.

PFE was finally able to put itself firmly on the US movie business map in 1993 with ‘Four Weddings and A Funeral’. The concept of initially limiting the number of US movie theater screens on which a film first is exhibited and then gradually booking more screens and doing more marketing as the film proves itself to be successful was created by Kuhn and the marketing people of Grammercy. This plan was hatched because PFE had no formal US distribution company of its own set up to make US theatrical bookings and because of limited funds to book screens and advertise and market ‘Four Weddings’. But that was really an opportunity not an obstacle: ‘Four Weddings’ which cost $4 million to make had as of 2002 made $240 million worldwide! This proved that it was possible to create a successful studio outside of Hollywood.

PFE put out a lot of good indies: ‘Fargo’, and ‘Being John Malkovich’ to name just two and was on it’s way to being a powerhouse studio when it met with an untimely end.

So what ultimately brought PFE down? Most likely it was the joint venture structure between Siemens and Phillips. Phillips was far more interested in making hardware and in the late 1990s, the Internet was proving to be a threat to the profitability of the music business with peer-to-peer file sharing (this was when Napster was rising in popularity but no music company or computer company had thought to turn this into a revenue stream). So while the Siemens side of the venture (which had also pursued other lines of business) wasn’t all that concerned with what PFE did day to day, the Phillips side of the venture decided to sell off PFE and there was little that Kuhn or PFE’s management could do to stop Phillips. PFE was initially sold to Seagrams in 1998 and Seagrams then split up and sold off PFE. In 1998 it looks as if the catalog of PFE films went to MGM while the ongoing PFE projects ended up with Universal.

An interesting story right? But how is this relevant to ‘Guy’

It looks as if ‘Guy’ was actually made by a conglomeration of companies, most of which are German. ‘Guy’ was financed by a German company mostly for tax/grant reasons: many filmmakers can get grants and tax credits for partnering with a German production company…in fact ‘The Thirteenth Floor’ and ‘Guy’ both benefitted from funds from the same German entity, Filmstiftung Nordrhein-Westfalen. From what I can tell, PFE would likely have bought ‘Guy’ as a complete or mostly complete project from Propaganda Films (the US coproducing film company on ‘Guy’) and Grammercy Pictures and PFE would have been responsible for booking ‘Guy’ into theaters around the world (including the USA).

Kuhn says in 2 different charts in his book that ‘Guy’ was acquired by PFE in 1996. ‘Guy’ had it’s first theatrical release (which happened to be in the USA) in 1997 (December 17th, 1997). Some of what I know happened in that time period thanks to Kuhn’s book was in early May of 1997 PolyGram finally got its US film distribution division up and running. Then in late May of 1997 Kuhn began to see that like it or not, Phillips was determined to sell off PFE. So ‘Guy’, a movie with relative unknowns in the lead roles — VDO and Hope Davis — would have been a low priority movie for a US theatrical release (in fact ‘Bean’, the Rowan Atkinson movie in which Rowan introduced his popular British TV character Mr. Bean to a wide US audience was PFE’s US marketing priority for 1997 and as of September of 1997 it ‘Bean’ was doing great in its overseas release). So it looks as if ‘Guy’ got lost in the shuffle of confusion as to the future of PFE and the company’s desire to push ‘Bean’ out of its cult status as a Britcom TV show and into mainstream US popularity (if I recall correctly, ‘Bean’ was sort of successful in the USA but nothing like ‘Four Weddings’).

Also I seem to recall ‘Guy’ having it’s opening in only 4 US theaters and taking in only $50,000 dollars over it’s one and only weekend run (I think I read this in Variety).

So my trail ends in 2002 with MGM probably winding up with the US home video rights to ‘Guy’. But then again, it’s possible MGM has sold off some (or all) of the PFE catalog (I doubt this, but it’s possible).

I feel like I’m making progress, but I don’t have a definitive answer yet.

I would recommend “One Hundred Films And A Funeral” to anybody who is into the business side of movie and music making or is a real film geek. The average VDO fan however probably won’t get a lot out of it but to me it’s definitely a keeper. I learned a lot from Kuhn and would love to meet him and learn more of the history of PFE in general (as well as pick his brain about ‘Guy’ specifically).

I have more research completed from other leads, but this is enough to get you started.

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