BEDEVILED

by Stephen Galloway

On May 22, some readers of the trade press were surprised to discover that Alec Baldwin, the veteran actor seen in such pictures as "The Hunt for Red October" and "Pearl Harbor," had filed suit against the producer of the new independent movie Baldwin directed and stars in, "The Devil and Daniel Webster." The film, ironically, tells the tale of a desperate storyteller who is dragged into court to defend himself against a litigious demon seeking his soul.

According to reports, Baldwin alleged that David Glasser, CEO of Cutting Edge Entertainment, failed to pay him and crew members. As a result, with shooting wrapped, he was refusing to edit the picture until the finances were put in order.

The friction between the two sides erupted into a full-scale battle, with a lawsuit filed by Baldwin June 1 in Los Angeles Superior Court, alleging that the nonpayments had seriously jeopardized Baldwin's reputation and that he had to give up more than $5 million in other potential earnings to make the film.

According to the lawsuit, "Cutting Edge fraudulently induced (the) plaintiffs to enter into (an) operating agreement, knowing that they did not have the financial ability to finish the picture or to obtain all of the necessary financing pursuant to the operating agreement."

Glasser disputed many of Baldwin's allegations, and, finally - after shuttling back and forth between Cutting Edge and Baldwin's reps at the William Morris Agency - the two sides agreed to continue working together. On June 27, Baldwin returned to the cutting room and began editing the film.

"Devil" was Baldwin's dream project for seven years, ever since he and his El Dorado Pictures producing partner Jon Cornick started developing the remake of the 1941 RKO film "The Devil and Daniel Webster" (a.k.a. "All That Money Can Buy") for Castle Rock Entertainment.

Castle Rock eventually put the movie into turnaround. When the project landed at Cutting Edge, insiders say, Baldwin immersed himself in it, wooing friend Anthony Hopkins - whom he'd worked with on the gritty 1997 drama "The Edge" -to star in the film for a below-market fee, which is reported to be $6 million, far less than the $15 million he'd recently earned for "Hannibal." Sources say that shooting went smoothly and came in under budget, and all those interviewed agree that everyone involved was pleased with the way the film turned out.

So why did the dream project turn sour? How did one of Hollywood's best actors find himself in a legal battle with one of its more enterprising young producers?

The answer might lie in the clash between studio values and indie practices, between the expectations of one group used to dealing with the deep-pocketed majors and another used to the cut-and-thrust, hit-and-run style of the indie arena. It might also lie in the conflict between a well-known star and a small company risking almost everything it had on its most expensive project.

Unlike studio pictures - which are generally funded by one source or, in these days of increasing co-productions, by two at most - indie movies are often cobbled together by funding from a variety of places. Production companies either team with foreign sales outfits or have their own in-house sales units that raise money by selling the rights to a movie to territories around the world.

Ideally, these rights are sold before a movie is shot. Independent film companies can get bank loans to fund their films based on the strength of presales, which can generate from thousands of dollars to millions, depending on the territories and the movie in question. Boasting such stars as Baldwin and Hopkins, "Devil" could be a prime offering at the major film markets such as MIFED, Cannes and the American Film Market.

Indie companies also raise money by selling the domestic rights to their films, usually to a studio or to an independent distributor such as Artisan or Miramax.

It's this domestic deal that often fuels foreign sales. In fact, in an increasingly cost-conscious environment, many see a domestic deal as essential to generating big foreign deals, although having such high-caliber stars as Baldwin and Hopkins would certainly relieve some of that pressure.

In this case, no domestic deal has been put in place to date, which might have complicated financing right from the start.

"We're waiting for the proper cut to go out," Glasser explains, when asked why a domestic deal has not been made. "We have a first-look deal with Universal, but we've had several blind offers in the $6 million to $7 million range for domestic rights, and we turned them down." He adds that Universal is waiting to see Baldwin's cut of the promo trailer, which is due in late August or early September and that no domestic deal will be considered until then. "We're betting that the film is worth more than [what] we have been offered - in the $7 million to $8 million range," says Glasser, whose gamble has the support of his backers. "We think this is a commercial title and expect that it will warrant a 1,000- to 1,500-screen release with appropriate backing in P&A, so we're looking for those things in any offer we consider."

Cutting Edge screened a rough trailer - cut without Baldwin's input - at Cannes this year to quell any industry doubts about "Devil," and reports from the scenes were positive. But while the film has been sold to several European distributors - including TOT Media in Spain and Groupo Minerva in Italy - it has yet to be sold in such key territories as Japan and England, as the asking price could jump depending on who picks up the U.S. domestic rights.

Uncovering the truth behind what really happened in a "he said, she said" type conflict such as the one that plagues "Devil" is certainly difficult. Given the refusal of Baldwin and his associates to cooperate with this story makes it that much harder. Neither Baldwin nor Cornick returned calls placed to their offices. Baldwin's agent, Lee Stollman, declined to comment, and Baldwin's publicist said the actor-director was not available for interview.

However, through off-the-record interviews with several participants and through details in Baldwin's lawsuit, it is possible to piece many elements together.

According to Glasser, he and Cutting Edge became involved with "Devil" through a meeting Glasser had with Cornick several years after Baldwin started developing the film. The two were discussing "Waterproof," a Roland Joffé-produced movie that Cutting Edge had distributed and that Cornick was also involved in.

At the time, Cutting Edge was new to this upper-crust Hollywood realm. Glasser founded the company in 1993 after entering the business as a child actor then switching gears to become an independent producer. Initially, Cutting Edge did direct-to-video product; then in 1997, it began its move into the theatrical field.

Cutting Edge previously financed or released some 20 titles per year, including "In the Shadows," starring Cuba Gooding Jr. and James Caan; and "Dog," with Elizabeth Hurley. In addition, they had made films with two of Baldwin's brothers: Stephen on the actioner "Cutaway," and William on the drama "One Eyed King." But Glasser wanted to propel the company upward with high-profile films and bigger names. To that end, "Devil" seemed to fit the bill perfectly.

"Jon (Cornick) brought us the script," Glasser recalls, "and we met with Alec, and he was just passionate to do this movie." Cutting Edge agreed to make the film with a $13 million budget.

According to Glasser, at first, Baldwin had no plans to direct. "We spent about a year and a half taking the project to the next level," Glasser recalls. "We met with several directors. But most of them wanted the script changed in some way - either making it more of a thriller or adding more action."

During this time, "it became totally evident that Alec was the person to direct," Glasser explains. "He knew every scene, every shot."

In early 1999, Baldwin agreed to direct, given certain provisions that would only benefit the film, which included having a lengthy production schedule. Glasser agreed. According to Baldwin's lawsuit, he was to be paid $750,000 for his directing services, with additional payments for his producing and acting services.

He and his team then started looking for their lead actress.

Based on the 1941 film and the 1937 short story by Stephen Vincent Benet, "Devil" tells the story of a down-and-out writer (Baldwin) who offers his soul to Old Nick in exchange for fame and fortune but then hires a brilliant attorney (Hopkins) to plead his case when the contract comes due. The modern-day version would offer a twist: Satan would be played by a comely young woman, while the original featured crusty Walter Huston as the diabolic dealmaker.

"The actress had to be special," Glasser says. "She's playing the devil. This is not like 'Devil's Advocate,' with all the weird special effects. This is a combination of drama and comedy."

Finding the actress proved difficult as many young stars were tied to other projects. Rachael Leigh Cook was approached, but she decided not to take the part. Eventually, Baldwin met with Jennifer Love Hewitt and was impressed with her take on the role. A deal was put in place.

Hopkins had long been thought of to play the barrister Daniel Webster, but at first this seemed impossible because of the scheduling conflict with "Hannibal." When finding the right actress took longer than expected, "Devil" was delayed, and Hopkins again became available. A deal was negotiated through Hopkins' agent, Rick Nicita of Creative Artists Agency (CAA).

Signing Hopkins, however, meant an escalation in the film's budget: from $13 million to $18 million. And here, the first rift between Baldwin and Glasser appeared, with Baldwin insisting on shooting in New York instead of Toronto as initially planned. Glasser conceded, upping the budget to more than $20 million.

"That was the turning point for us," Glasser says, while conceding that the New York locations ultimately added a great deal to the film. "When we got to $18 million, and he said $20 million, I could see this would just keep going. I sat down at William Morris with Lee Stollman, then with (agent) Manny Nunez at CAA - he was representing Hopkins (along with Nicita) - and I said, 'Look, $20 million, that is it! Any more than that, and we are going to put ourselves in the danger zone.'"

And in the end, that's just what happened.

Costs started to climb. "By the time I rolled into the second week of preproduction, we were around $23.5 million," Glasser says.

Glasser worked closely with his completion-bond company, WorldWide Completion Company, and with the indie-finance mavens at the Lewis Horwitz Organization (LHO) to raise the rest of the money. LHO's Horwitz confirms the details of the ensuing roller-coaster ride.

What followed was a frenzied scramble that had the bankers and producers working around the clock to raise the extra funds.

In December 2000, with preproduction well under way, Glasser flew back to Los Angeles at Christmas to work the phones and raise funds.

"We had to keep increasing the budget," Glasser explains, his voice rising with the drama. "I hadn't seen my wife and kids for six weeks. But I flew home to increase financing by another $4 million in the middle of the Christmas holidays because I couldn't put any more cash in the picture - my company already had $5 million of its own money in the film."

Miraculously, Glasser and his colleagues found the money. Everything was set for shooting to begin. And then, just days before Cutting Edge could close the deal for its first loan to start filming, it was hit with a near-devastating blow.

Glasser learned there was an issue about who actually owned the rights to certain territories - the kind of problem that can stop a movie in its tracks. Baldwin had made a deal with another sales company before Cutting Edge came aboard "Devil," so this company still had contractual claims to the rights of certain prime territories.

"No bank in the world, and no bond company, will close a loan in those circumstances," Glasser notes. "So here I am, with 65 employees on my payroll, actors flying in, sets being built! I'm not a studio. Where's the money going to come from? Some we had to cashflow ourselves, with a partner, (Michael Greyson, CEO of) Axis Entertainment. They stepped in with bridge financing during the preproduction phase - and I'm locked in an office, like a war room. We had attorneys working round the clock. We had ten people in a room." Glasser's task was to carefully extract "Devil" from these old contracts, using the argument that the new expanded project was not the one the original company had made their deal with.

Meanwhile, Hopkins was waiting to be paid. He and Hewitt were expecting their salaries to be put into an escrow account six weeks before shooting - but there was no sign of the money.

Sources close to Hopkins confirm that they started to become anxious when the money didn't arrive, but because of the actor's friendship with Baldwin, they chose to hang in nonetheless. By this time, Glasser's personal stake in the film had risen to $6 million, as he was still funding the picture, while Baldwin was location scouting.

"But I couldn't reach out to my bank because there was no clean chain of title," Glasser explains. Shooting was scheduled to start Jan. 15, 2001, but things were getting perilous.

"Here's Hopkins coming off 'Hannibal' with every offer in town, and he still does not have his money escrowed," Glasser says with a sigh. "The agents were starting to get concerned. But we assured them we would come through. Things got really tense in January, two weeks from production. David Hutkin (lead banker at LHO) was literally sleeping in the office, working to get this done."

On Jan. 7, one week from shooting, Glasser adds, "financing still hadn't closed. Hopkins' people were getting very nervous. Meanwhile, Cutting Edge and Axis are floating every dime of production 50-50. If the loan hadn't closed, I'd have been out close to $7 million at this point. Come Thursday that week, I was on a plane back to New York, and I got a phone call that Anthony (Hopkins) was looking at other projects."

Near panic, Glasser landed in New York on Jan. 11 at 4 p.m. and proceeded to his hotel room, which by then had turned into a veritable battle zone of accountants and production personnel. "There were two weeks of work to do in 72 hours," he says.

The following day, he was told that Hopkins was moving on. And then, to great gasps of relief, a day later, on Saturday morning, Glasser and Hutkin closed the paperwork for the rights - and with them, the loan.

"At 10 p.m. on Saturday night, LHO's David Hutkin drove the escrow checks to SAG, Hopkins' and Hewitt's people. We were financed about nine hours outside the day of production," Glasser recalls.

Shooting was under way one week behind schedule, and, according to sources, went smoothly, with a budget now twice its initial size, $27.6 million, with new financing from Miracle Entertainment, Americana Financial and Vavand Holdings, among others.

Initial presales of $16.5 million from just a few territories indicated to Glasser that he had a major hit, and subsequent sales have boosted that tally to $19 million.

Baldwin - despite having to deal with the frenzied pursuit of the press following his split with wife, actress Kim Basinger - still managed to bring the film in on time. According to his lawsuit, it wrapped at $700,000 below budget.

"The dailies were looking great, the production was on schedule," Glasser gushes. "By week two, the bond company came out, and they were completely satisfied."

Glasser marvels at Baldwin's ability to successfully deliver the hardest part of the film - a 40-page courtroom sequence that he had to act in and direct.

"They were very heavy scenes, and Alec pulled them off," Glasser attests. "He can be brilliant."

Baldwin, however, was extremely unhappy about what he claimed were nonpayments to him and others. In late May, he told a trade journalist that he had not been paid for the final four weeks of shooting on the film. "The financing appeared to have fallen through, and they just stopped paying people," he said at the time.

In his lawsuit, Baldwin said that he was owed $550,000 when production wrapped, but this has since been paid, though only after Baldwin hired attorney Martin Singer. Still, he said, his anxiety was not allayed. Glasser does not dispute that there were financial problems, but says he asked for tolerance.

"I was looking at the global picture," he explains. "I said, 'We have a vision here together. Let's be patient.'"

According to Glasser, at that late stage, "we basically had one investor fall out - a small piece of money. We told everybody, we'll pay (in the investor's place)." It was, Glasser says, "a minute piece of financing - far under $1 million." But he acknowledges that several people were not paid when they should have been.

Today, almost three months after the "Devil" legal rift began, Glasser says everyone has been paid, an agreement between Cutting Edge and Baldwin has been reached, and Baldwin's lawsuit has been canceled. Baldwin returned to the editing room at the end of June. Glasser is now waiting for Baldwin's 10-minute presentation reel in order to begin domestic dealmaking. The finished film could be ready by November.

While it might seem odd, Horwitz, for one, sees the "Devil" dilemma as par for the course in the indie business. "In a sizable number of independent productions," he notes, "the producer does the best he can with somewhat less than the amount of money he would like to have to produce the film." He adds, "The film looks really good. Alec did a great job."

But for both Glasser and Baldwin, "The Devil and Daniel Webster" has been a bruising experience. Now both must wait to see whether the negative publicity engendered by their legal dispute will damage their film or whether the quality of the product - which almost everyone believes in - will shine through.