Duo Dynamics : At Warner Bros., Top Bosses Struggle With Growing Pains

Warner Bros. isn’t itself these days.

As its first expensive summer release, “Batman & Robin,” opens today in a treacherous marketplace, the historically stable and consistently successful studio is facing a dearth of box-office hits and some unaccustomed tumult in its motion picture operation.

Although its box-office woes, most recently exacerbated by the expensive flop “Father’s Day” starring Robin Williams and Billy Crystal, are certain to be eased by a promising summer lineup, the studio is grappling with more fundamental issues.

Warner Bros. co-Chairmen Robert Daly and Terry Semel--widely considered the most formidable partnership in Hollywood--are redefining their role at the studio since expanding their responsibilities 18 months ago to include Warner’s huge global music business.

Now responsible for a $10-billion-plus entertainment empire that also includes television, retail stores and theme parks, the Warner executives are for the first time in their 17-year professional careers together delegating more authority and daily duties to their recently installed production heads.

The change has raised concerns that Daly and Semel may be stretched too thin to pay close enough attention to problems in the motion picture division.

Various sources, including talent agents, lawyers, producers and Warner executives, describe serious tensions and infighting between the studio’s co-presidents of production, Bill Gerber and Lorenzo di Bonaventura, triggering a morale plunge inside the Burbank studio and a general nervousness throughout the creative community.

“This used to be the tightest-managed ship in the business, and now there’s chaos and infighting,” says a studio source. “Bob and Terry need to pay more attention to the store.”

In a rare interview at their Burbank headquarters, Daly and Semel said such criticism during a period of transition is unfair. Warner’s ever upbeat chieftains, unused to any unrest in their domain (let alone negative publicity), defended their remarkable history at the box office and explained that their stepping back from daily management of the movie division is by design.

Known for promoting from within the Warner ranks, Daly and Semel 15 months ago gave the top production job to Gerber and di Bonaventura, two of their senior production executives. The two, both 40, have yet to prove to the Hollywood community that they’re up to the task.

Semel and Daly say they’re happy with the arrangement and argue that the executives haven’t had enough time to prove themselves.

“This is a grooming period, a growing period,” says Semel, who spends more of his time overseeing the movie division than Daly, who concentrates more on television and administrative matters. (They share responsibilities for music and the other businesses.)

“I’m not going to sit in every two-hour producer meeting like I used to,” he adds. “The sign of good management is to bring in smart, young people and let them run with the ball--and don’t do their job for them.”

But make no mistake. Semel and Daly are the last say on every major decision about what movies get made, how much they cost, how they are marketed and how they are distributed.

“If anyone thinks that there is not a single important decision that we’re not knee-deep in, they are sorely mistaken,” says Semel.

The Warner chiefs regularly attend all key production and marketing meetings, including a production lunch every Tuesday, a mini marketing meeting on Mondays to review the results of the weekend box office, and a two-hour marketing meeting every Wednesday.

Daly says both he and Semel used to attend multiple previews for their movies, but now they’ll attend one for each movie.

“Some days I may see Terry in six meetings and some days I see him twice a day,” says Daly. The two share a conference room, have offices next to each other and drive to work together three days a week.

“We’ve been doing this together for 17 years, we can speak shorthand,” says Daly.

He and Semel hope Gerber and di Bonaventura can learn to enjoy a similar kind of partnership.

Semel, who has spent most of his career at Warner, recalls that when he and Daly, a former top executive at CBS, first took over for the team of Ted Ashley, John Calley and Frank Wells, “everyone was sure we’d fail--we had an impossible mission.”

“There’s a lot of adjustment in the first year. . . . A good relationship gets better and a bad relationship ends in divorce, but it’s hard to prejudge people in a year,” Semel adds.

But the carping has begun with a vengeance, and many sources say its legitimate. “They’re at each other’s throats,” says one producer.

“It’s supposed to be a partnership, but it’s one-upmanship,” says a top agent.

Daly and Semel remain staunch in defense of Gerber and di Bonaventura’s work.

“I think they’re doing a terrific job,” says Daly. “We have more development going on than any other studio. We buy a lot of projects, and they’re putting together a lot of big movies. Now, do they have to grow together a little bit? Yes, they do. That’s part of the learning curve.”

Gerber, a native of Beverly Hills and son of a talent agent, started out on the music side, co-managing artists such as the Cars and Devo, and is considered Hollywood slick and savvy.

Di Bonaventura, whose father is a symphony conductor, was born in Long Island and raised in New Hampshire, studied intellectual history at Harvard, has an MBA from Wharton and worked on Wall Street before entering the business in 1988 at Columbia Pictures.

After meeting at a dinner party in 1989, Gerber helped recruit di Bonaventura to Warner. They started out as friends and then became fierce rivals when both were executive vice presidents at the studio.

They deny reports that they are combative with each other.

“We’re very competitive, ambitious guys,” says Gerber, “but we bring out the best in each other, we don’t compete with each other. When I see Lorenzo do something great, it inspires me to do something great. We both want to get out there and score.”

Whereas Gerber says his style is “instinctual--I work from the gut,” di Bonaventura describes himself as “very methodical.”

Says di Bonaventura: “I’ll sit through nine hours of story meetings beat by beat and it drives Billy crazy.” And Gerber’s seat-of-the-pants style? “It drives me crazy.”

But both contend that in their 15 months together, they’ve never had a major disagreement about a movie.

“We talk through our different approaches, and people interpret that as disagreement. We interpret that as part of the process,” says di Bonaventura.

Semel says the movies the two have put together for the remainder of this year and next will speak for themselves.

“We’re going to have a record-breaking year in our film division, and we have some fantastic potential ahead of us,” says Semel, citing such upcoming movies as Robert Zemeckis’ “Contact” starring Jodie Foster as “one of the best and potentially one of the biggest movies we ever released.”

Daly and Semel also caused a stir within the company six months ago when they hired an outsider to run one of their key divisions--marketing.

Chris Pula, the former head of marketing at New Line (now owned by Time Warner Inc.), is well-regarded for his innovative campaigns and well-known for his outspoken ways, a contrast with Warner’s conservative, button-down style. Warner insiders report that marketing meetings can get very heated and that Pula often clashes with the studio’s old hands.

Last week, Pula sent shock waves through the rank and file at Warner--also known for its family environment and small turnover--when he fired five executives in the publicity department, several of whom had been at the studio for 15 years. Another handful of executives is expected to be let go in a major restructuring of the marketing department.

“None of the changes are due to incompetence,” says Pula, but rather because of “an organizational chart that has grown too inefficient and top-heavy over the years.”

Daly says he is well aware that the changes have had an impact, especially because “Warner Bros. is a company that never changes.”

This has been a year of change, though, as the division adapts to parent Time Warner’s $7.4-billion merger with Turner Broadcasting System Inc.

It has meant prolonged uncertainty about the fate of the Turner-owned movie companies--Turner Pictures, New Line and Castle Rock--and how they might fit into the Warner family. Turner folded, New Line will operate autonomously and Castle Rock will function as a much-scaled-back movie unit under Warner Bros. making a handful of mainstream films each year.

Earlier this month, Castle Rock fired 65 employees, about half its staff. Last week, the studio shuttered its 18-month-old in-house special-effects division, Warner Digital Studios, which employed some 150 people, after determining it would be more economical to farm out the work.

Daly said the cutbacks were not a matter of a mandated corporate downsizing but rather a companywide evaluation of costs and efficiencies akin to what every studio is doing.

“We are certainly trying to get ourselves up-to-date, and there are times when you have a company that gets a little fat, and you have to make sure you’re not fat and you’re on the cutting edge,” Daly says.

Although Warner is known for its expensive, star-driven movies, Semel says the studio isn’t spending as much as people think. He says “Batman & Robin,” which sources contend cost more than $175 million, was “a little over $100 million” and that “Father’s Day,” which sources say cost more than $80 million, cost about $20 million less than that.

In any case, “Father’s Day” will be a huge loss for the studio. With the exception of its live-action/ animated comedy “Space Jam,” which Daly claims is “very profitable,” the studio has been hit-starved since last summer’s trio of $100-million grossers: “Twister,” “A Time to Kill” and “Eraser.”

Although its current market share for the first half of the year is a paltry 7.5%, behind all the other majors except for the release-bare Metro-Goldwyn-Mayer, Daly and Semel are quick to point out that the studio is roughly in the same position it was in the first part of last year, if you don’t count “Twister,” which was released earlier in the season than the company’s first big summer film this year.

“The last two years we didn’t start off strong, either,” says Daly, “but we still ended the year second to Disney, and this year we believe we will again finish in the top two.”

Daly and Semel also emphasize that year in, year out, Warner’s movies generate tremendous profit for the studio, and that franchises like “Batman” bring in zillions of ancillary dollars from retail sales, theme park rides and soundtracks.

Warner claims an astonishing 14 consecutive record years of profit, more than half of it from movies.

But Warner presumably is just as vulnerable to the volatile movie marketplace as its rivals. And, as top management is finding out, the normally unshakable studio is not immune to unrest.

‘BATMAN & ROBIN’ REVIEW: F1

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

What, Us Worry?

Warner Bros. co-Chairmen Robert Daly, far right, and Terry Semel, near right--Hollywood’s longest-reigning, most formidable management team--are grappling with a prolonged box office slump and unaccustomed troubles in their movie division.

The Misses

* “Father’s Day” missed with audiences who didn’t buy the concept of a woman trying to convince her old boyfriends that each may be the father of her son.

* “Rosewood” failed to work commercially despite critical acclaim.

Other movies contributing to Warner’s recent dry spell:

* “Murder at 1600”

* “Vegas Vacation”

* “Addicted to Love”

* “Mars Attacks!”

* “My Fellow Americans”

* “Michael Collins”

* “Joe’s Apartment”

The Next Shot

* “Batman & Robin,” the fourth installment in the successful franchise, opens nationwide today amid some very negative reviews. Warner is betting big on the mega-budgeted movie, with George Clooney as the Caped Crusader, Uma Thurman as Poison Ivy and Chris O’Donnell as Robin--as well as Arnold Schwarzenegger as Mr. Freeze.

Upcoming Hopefuls

* “Contact” with Jodie Foster, above, and Matthew McConaughey (July 11)

* “Conspiracy Theory” with Mel Gibson and Julia Roberts (Aug. 8)

Also coming this year

* “Devil’s Advocate” with Al Pacino and Keanu Reeves

* “Mad City” with Dustin Hoffman and John Travolta

* Clint Eastwood’s “Midnight in the Garden of Good and Evil”

* Kevin Costner’s “The Postman”

* “Sphere” with Dustin Hoffman and Sharon Stone

1998

* “Superman” with Nicolas Cage

* “Avengers” with Sean Connery, Ralph Fiennes and Uma Thurman

* “Eyes Wide Shut” with Tom Cruise and Nicole Kidman