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The reel life of Phil Anschutz
The reel life of Phil Anschutz

The reel life of Phil Anschutz

Qwest co-founder bankrolls wholesome film fare with mixed results
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By George Anders, The Wall Street Journal

April 23, 2004

Some people know Phil Anschutz, co-founder of Qwest Communications International Inc., as a hard-charging financier who has amassed a $5 billion fortune in oil, railroads and telecommunications. But a very different side of him emerged two years ago, in a late- night phone call.

The call was to Angelo Pizzo, a Hollywood screenwriter known for creating the movie Hoosiers in the 1980s. Anschutz had hired him to help craft a $30 million inspirational film about soccer's World Cup. Crews in Brazil were about to film a scene of the U.S. coach exhorting his underdogs in a locker-room pep talk. Even though Anschutz had seen the script many times, he was bursting with ideas about what needed to be in that speech.

"Phil wouldn't stop," Pizzo recalls. " 'Tell them, This is about pride,' he said. 'When we go out there, nobody knows who we are, but this is how we will remember ourselves for the rest of our lives.' He wasn't just making this movie to entertain people. He desperately wanted it to teach young people about how to deal with life."

Anschutz is pounding out such messages a lot these days. In the past few years, he has stormed into Hollywood, bankrolling nearly a dozen projects at once. These films are meant to be uplifting and family-friendly, earning G and PG ratings, even as movie theaters are packed with darker, R-rated fare. The 64-year-old Anschutz has committed more than $300 million to film projects already. It's unlikely he will break even on many of them. But he shows no signs of stopping.

Movies are the latest venture for Anschutz. One of the biggest landowners in Colorado, he also is a major investor in railroads, sports teams and stadiums and is the controlling owner of Regal Cinemas Corp., the largest U.S. movie- -theater chain. He is probably best known as the co-founder of Qwest, a once-highflying telecom company that stumbled badly during the tech slump. His 18 percent stake in Qwest alone is valued at more than $1 billion.

Anschutz remains a director of Qwest, where past accounting practices have come under fire. Last year the company restated its results for 2000 and 2001, eliminating billions of dollars of revenue that it had booked earlier as capacity-swap agreements with other telecom companies.

Biggest test

Now the biggest test of Anschutz's movie-making ambitions is about to play out. He has financed a $110 million remake of the 1956 movie Around the World in 80 Days, which he enjoyed as a youth growing up in central Kansas. Hollywood chatter a year ago was that the project was in trouble, based largely on Paramount Pictures' decision not to distribute the movie. But Walt Disney Co. has signed on as the movie's U.S. distributor and has signaled plans for a wide release June 18 on as many as 3,000 screens.

With Disney behind the film, "our risk is much smaller, and we stand a good chance of making money on it," says Cary Granat, president of Anschutz Film Group.

The movie may benefit from a lucky casting decision: Arnold Schwar-zenegger has a cameo role as a Turkish prince, filmed shortly before he began his successful campaign to become California governor.

Succeeding in the family-film market is tricky, especially for a newcomer. Just this week, Anschutz announced he was dismantling one of his two production companies, Crusader Entertainment. He had created the company in 2000 to make films free of violence, sex, drugs, tobacco and profanity, but few of its films made money.

Some of Anschutz's films haven't connected with audiences, while others remain mired in disputes. His remaining film-production company is focusing on movies based on classroom books.

"Hollywood is a very cynical place," he says. "It's pretty tough."

On a wall in his Denver headquarters is a plaque with a quote from writer Hunter S. Thompson calling the film business "a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There is also a negative side."

Still, Anschutz is telling friends he has learned from his mistakes and is ready to step up his commitment to making wholesome films. He and Disney have paired up to develop C.S. Lewis' Narnia books into a series of movies, starting with a $150 million version of The Lion, The Witch & the Wardrobe for Christmas 2005.

Moral uplift

Beyond Hollywood, Anschutz is taking his moral-uplift campaign into other areas as well. He is spending $5 million a year to cover America with thousands of billboards praising Abraham Lincoln, Kermit the Frog and other heroes. He has underwritten one of the most wholesome shows Las Vegas has ever seen, centered on pop singer Celine Dion. And earlier this year, he acquired the 139-year- old San Francisco Examiner for $20 million, explaining that he wants to revamp the free tabloid so that it once again becomes a respected mainstream newspaper.

In one case, Anschutz's insistence on wholesome film fare cost him a lot of money. He was offered an early chance to invest in Mel Gibson's stunningly popular film The Passion of the Christ but turned it down because the movie's graphic Crucifixion scenes were sure to earn an R rating.

Born in Russell, Kan., Anschutz initially followed his father's career footsteps, becoming an oil-and-gas wildcatter in the 1960s. He borrowed as much as banks were willing to lend him to grab control of some lucrative Wyoming energy leases - then came close to ruin when a major oil field that he controlled caught fire in 1966. But he managed to turn a profit by calling in a Hollywood film crew and charging them $100,000 for the chance to chronicle the blaze and the firefighters' response. That drama became part of a John Wayne movie, Hellfighters.

Anschutz diversified into ranching and real estate in the 1970s, bought control of the Southern Pacific railroad in the 1980s, and then rode the tech-stock bubble up - and down - in the past decade, thanks mostly to his big investments in Qwest. At the peak in 1999, his net worth topped $18 billion. He also acquired a 30 percent stake in the Los Angeles Lakers basketball team, majority ownership of the Los Angeles Kings hockey team, and controlling interests in nearly a dozen soccer teams in the U.S. and Europe.

The silver screen

Several years ago, Anschutz began diversifying into movie -theaters. In 2000 and 2001, his company acquired controlling positions in several chains' defaulted junk bonds at bargain prices. The biggest such chain, Regal Cinemas Inc., was controlled at the time by buyout kings Henry Kravis and Tom Hicks, who tried to remain at the helm in a bankruptcy reorganization. But Anschutz shunted them aside. Eventually, he swapped his bonds for a 78 percent voting stake in the renamed Regal Entertainment Group, which operates 6,100 movie screens across the U.S. and is based in Centennial.

Gradually, Anschutz began paying more attention to what films people were watching. In his view, Hollywood was making movies for teenage boys, chasing everyone else away. Regal executives shrugged, explaining that their mission was to exhibit popular movies, without trying to wean American audiences from their R-rated appetites.

Anschutz began to wonder if traditional themes could make a Hollywood comeback. Encouraging this idea was Bob Beltz, a retired minister at Cherry Hills Community Church in Highlands Ranch., where Anschutz worshipped. Beltz introduced Anschutz to a religious novel called Joshua and a wide array of uplifting books he thought could be adapted into movies. For a time, Beltz became a "special projects adviser" to Anschutz, with an office at Anschutz headquarters and free rein to read scripts, travel to film sets and scout for movie projects.

In March 2000, Anschutz announced that he was forming Crusader Entertainment, a Beverly Hills, Calif., movie-production company that would deliver wholesome fare. Day- to-day operations were put in the hands of Howard Baldwin, a former hockey executive whose best-known movie work involved producing Mystery, Alaska, a niche hockey film that Anschutz liked.

For most of its 3 ? years in business, Crusader struggled to find its way. At one point, the company spent $8 million to film Children on Their Birthdays, a Truman Capote short story with so little public appeal that the finished movie rang up only $54,000 in ticket sales before disappearing from first-run distribution.

Anschutz contributed to some of the early tumult, vexing directors with well-intentioned but hard-to- follow advice on how to make movies. For the religious film Joshua, he arranged to have Sen. Orrin Hatch of Utah contribute a song that he had written, Everyday Heroes. By the time a finished copy of the song arrived, the movie's score was largely complete and there was no obvious place to put it.

"I managed to squeeze it in as background music during a pool-hall scene," director Jon Purdy recalls, "but it wasn't easy." The movie, which cost $8 million to make, took in $1.6 million at the box office.

Over time, Anschutz learned to make his influence felt more obliquely. He stopped visiting sets during filming, telling people: "I'm not doing this to meet movie stars." He reined in Beltz, the former minister, telling him he couldn't be the spokesman for the Anschutz Film Group. And when movie executives declared that a biography of singer Ray Charles couldn't be effective unless it documented his problems with drugs and women, Anschutz dropped some of his initial plans to soften the movie. The movie is scheduled for release later this year.

For a brief time, Anschutz and Baldwin were excited about the prospect of filming Ayn Rand's epic novel Atlas Shrugged. They snapped up the movie rights for more than $200,000 in 2003, only to discover that the 1,075-page book's sprawling nature, long speeches and many subplots made it an extremely problematic film project. Anschutz insiders say it's an open question whether they will press on.

Filling in 'Holes'

Just a few blocks from Crusader's headquarters in Beverly Hills, another Anschutz film venture started taking shape in 2001 - and this one has achieved its goals much faster. Called Walden Media, it was led by Granat, a former Miramax executive who had helped produce the first, extremely successful Spy Kids movie. Walden focused on making mainstream movies that could tie into schools' reading lists.

"We met with a lot of media companies when we were looking for funding," recalls Granat, "and most of them were interested in us mostly as apologists for the rest of their programming. Phil Anschutz was the one person who really liked the idea in its own right."

One of Granat's first moves was to sign up the movie rights to Holes, an award-winning book about a mistreated boy who overcomes a family curse and finds buried treasure at a youth detention camp. The movie cost about $30 million to make and has taken in $67 million at the box office - Anschutz's biggest hit.

When the film was finished in 2002, Granat took an early print to Denver and screened it privately for Anschutz and his wife, Nancy. Several years earlier, Nancy Anschutz had told her husband that she thought his Hollywood cleanup campaign was a nice idea but a dumb one, too. At the end of the screening, both Anschutzes were misty-eyed. Anschutz turned to Granat and declared: "This is why I decided to go into the movie business."

Walden executives say they may do four to eight movies a year, though they don't have any fixed targets. For now, at least, they have powerful friends at Disney, their main distribution partner. The chairman of Walt Disney Studios, Dick Cook, says he is impressed at how quickly Walden has "made a number of really great movies," adding that "we're joined at the hip" on the Narnia project.

Anschutz Film Group now plans to establish a second brand, Bristol Bay, for movies that don't tie into Walden's school-oriented mission. Anschutz, a history buff, has no shortage of ideas that might become movies. People who know him say he is especially enthusiastic about a biography of William Wilberforce, a 19th century British abolitionist.

While many people see Anschutz as the ultimate outsider in Hollywood, in some ways he is returning to his roots. Once again, he has told many friends, he is a wildcatter. He is scouting for good properties, spending months or even years getting everything ready - and then sinking big money into a project that might be a huge success or a total failure.

"Phil is better prepared than most people for the ups and downs of the movie business," says David Weil, who recently became chief executive of Anschutz Film Group. "He's not afraid of having a dry hole."

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