The futuristic epic "Waterworld" has been beset by such terrible troubles that the latest wrinkle seems improbably small: Kevin Costner is losing his hair. Two weeks ago Costner and his longtime friend director Kevin Reynolds were holed up in a Hollywood editing room, working around the clock to get their movie into theaters by July 28. Costner was unhappy. He wanted a slower, longer, more sweeping epic. He wanted his character to seem more heroic. And he wanted him to have more hair, reportedly demanding reshoots and expensive computer work to camouflage his own thinning locks. Reynolds resisted, but Universal Pictures stood by its star. Soon the director was gone, and Hollywood's resident cynics were just a little more certain that "Waterworld" would be the biggest fiasco of all time.
The budget of "Waterworld" is now believed to be $175 million, making it the most expensive movie ever made. The project has been tagged "Kevin's Gate" and "Fishtar," after two world-class disasters. But the world may be dancing on the movie's grave too soon. No question: Universal Pictures and its parent. MCA. have ended up spending far more on "Waterworld" than anyone ever intended. But this story of Hollywood excess may not end in financial ruin. By the strange economics of the movie industry many films that get labeled bombs end up being hits (chart). It's true that Universal needs a home ran. But if it wasn't ready to swing for the fences, it would have abandoned the game long ago.
Why does Hollywood keep churning out horrendously expensive films with cost overruns that make the Pentagon look frugal? Because it has to. Nothing quite eases the bang of a bang. Former Wait Disney studio chief Jeffrey Katzenberg tried proving that even a big studio can make movies on the cheap, without giant stars and costly special effects -- but he turned out flops like "Cabin Boy" and "It's Pat" in the process. Small movies with low-watt stars may break even-and, very occasionally, strike it rich -- but they're too much of a long shot when your studio has a $300 million annual overhead. "The $25 million comedy is deadly," says one top executive. "It can put you out of business." Hollywood will make adventures like "Waterworld," adds an industry lawyer, "until low-budget comedies start making $200 million."
"Waterworld" was a monster from the get-go, and Universal's real misstep seems to have been underestimating the horrors of shooting a movie in the middle of an ocean. "You've only got a few executives in Hollywood who have any idea of what it actually takes to make a film on a day-to-day basis," says Hollywood analyst Christopher Dixon. "So you have these guys just O King budgets for films without any idea of what it's going to entail. That's how these budgets get out of control." (Executives at Universal and MCA declined to comment for this story.) "Waterworld" is set after the polar icecaps have melted and flooded the earth. Costner, who received $14 million for his services, plays a web-fooled drifter named Mariner who leads the fight against the forces of evil, as well as the search for dry land. "Waterworld" was originally projected to have a $100 million budget--sources say Universal intentionally rounded down to sidestep accusations of excess--but a torturous, 166-day shoot outside Kawaihae Harbor, m Hawaii, left the financial plan in shreds. There were frantic script rewrites, accidents, hurricane warnings and long delays. Even in an age when bank-breaking stunts and special effects are the Hollywood norm, the cash outlay has been breathtaking. "Waterworld" needs to storm the box office in July, going after an audience that will already have been rocked and rolled by big-ticket competition like "Crimson Tide," "Die Hard With a Vengeance" and "Barman Forever." So the demands that Costner made in that HollyWOOd editing room weren't the rantings era vain superstar. Heroism (and hair) put people in seats.
The media sniff scandal. But chances are the studio and the star will still be standing come September. American critics may write it off, and American audiences may hate it. But "Waterworld" won't rise or fall wholly on moviegoers in Cincinnati. There are foreign showings, Cable sales. Merchandising. Franchise fees. Video rentals. Says an analyst for the research firm Exhibitor Relations, "There are so many different ways a film can get its money back these days-so many more than, say, 10 or 20 years ago."
"Waterworld" has lined up 30 licensees for product tie-ins, including Kenner toys and Taco Bell. (Some companies were reportedly seared away by a scene in which Costner drinks his own urine.) And the filmmakers can bet the movie will do well overseas: American movies now make more money abroad than they do at home, and many a troubled project has turned golden on foreign soil. "There are more and more screens being built, particularly in underdeveloped countries like Mexico," says Derek Baine of Patti Kagan Associates. "Exhibitors are realizing that poor economies need escapism." Inevitably, the movies that do best overseas are giant, superstar-driven adventures; comedies and dialogue-heavy dramas just don't translate as well. Sylvester Stallone's big-budget "The Specialist" did only fair with a $57 million U.S. theater gross, but it hit the jackpot by making double that abroad. Arnold Schwarzenegger's "Last Action Hero," the most heavily scrutinized flop in years, raked in nearly $100 million overseas.
So with the foreign box office on its side, all of "Waterworld's" missteps shouldn't matter. According to analyst Baine, the movie can break even on $150 million in U.S. ticket sales and an additional $170 million in sales overseas; ff the new "Waterworld" ride draws more visitors to Universal's theme park in Los Angeles, the net could easily be positive. "Waterworld" would even be a hit flit followed in the thundering footsteps of "True Lies," which made $150 million here and $208 million abroad. In the end, the sheer extravagance of the movie maybe its greatest asset. Peter Bader, who wrote the original "Waterworld" screenplay, says of the filmmakers, "Of course it's too much money, but it's kind of glorious that they've tried to do it all." Don't be surprised if they have it all, too.
Even purported disasters can be profitable--and a couple of winners can make up for a lot of losers.