THE MAN WHO PULLED THE STRINGS James G. Robinson: financial swashbuckler

THE BALTIMORE SUN

In Baltimore, auto import executive James G. Robinson is a stranger to the media. In Hollywood, he is their darling.

A former Dundalk car washer, Mr. Robinson spends half his days quietly running his import business at the Dundalk Marine Terminal. The other half he spends with the likes of super box office draw Kevin Costner, the lead in this summer's movie mega-event, "Robin Hood: Prince of Thieves."

He travels with Steven Ross, chairman of Time Warner Inc., whose Warner Bros. movie studio is distributing the Costner movie. And he hobnobs with congressmen, senators and presidential chiefs of staff, who attended the film's Washington premiere last week.

Mr. Robinson, a relative recluse in Baltimore, is chairman of one of Hollywood's hottest independent movie studios, Morgan Creek Productions. The company's latest picture is also its most expensive to date, costing about $54 million. And because of the nature of its financing, it is the studio's biggest gamble.

By the end of this weekend's nationwide release of "Robin Hood," James Robinson, movie mogul, will know how much he should be thankful for his "day job" as James Robinson, auto import executive.

Not that he's about to discuss any of this with the Baltimore media. Granted, his failure to return repeated calls to his offices in Los Angeles and Baltimore last week could be written off to the demands of a hectic opening week and movie premieres in three cities.

But interviews with current and former colleagues, as well as information from other Baltimore media that have tried unsuccessfully to interview him over the past year, reveal a reluctant starmaker, one content to spend only half his time in the spotlight.

"I think that he feels that he doesn't want the taint of Hollywood, as he sees it, to have a bad effect on his family," said Joe Roth, Mr. Robinson's former partner and co-founder of Morgan Creek, who two years ago left to run 20th Century Fox's film division.

"He was very careful in keeping his family out of" his Hollywood life, Mr. Roth said.

The family lives near Towson, where Mr. Robinson still spends more than half his time. Two of his four sons -- he also has a daughter -- now work in their father's auto company (one son, Patrick, declined to be interviewed for this article). Mr. Robinson changed the name of the company several years ago from Maryland Undercoating Inc. to, appropriately enough, Premier Automobile Services Inc.

The Baltimore story is a normal enough life for a Dundalk native who got his start in the auto business by washing cars at the Dundalk Marine Terminal. Mr. Robinson, a 1955 graduate of Dundalk High School, left the University of Maryland at College Park early to join the army; he finished his degree overseas.

When he returned from Germany in 1963, he found the used car he had shipped home was coated with a protective grunge of some sort. He spent the entire day cleaning it off before he discovered there was one firm in Towson that did that sort of specialty cleaning. Mr. Robinson and a partner, Robert Schmitt, bought the company that December and then set up another operation at the Dundalk Marine Terminal to service imported automobiles.

As auto importers began to demand more and more services, from undercoating to minor retrofits such as adding sunroofs and molding, Mr. Robinson's business expanded, according to J. Melvin Bafford, Maryland Port Administration general manager for shipper sales and a longtime acquaintance of Mr. Robinson. Maryland Undercoating became one of the major import and processing agents in the port of Baltimore, he said. Mr. Robinson owns a similar facility in Los Angeles.

Through the import-servicing enterprise he moved into the business that would make him his initial fortune. In the mid-1970s, when times were tough for Subaru in the United States, Mr. Robinson bought a distributorship that ultimately would supply Subaru cars and parts throughout a 93-dealership territory in the Midwest.

"He's a risk-taker, but an intelligent one who takes calculated risks, most of which have paid off," said Marvin Riesenbach, until recently the chief financial officer for Subaru of America in Cherry Hill, N.J.

That one paid off handsomely. When Mr. Robinson sold Subaru Mid-America Inc. in early 1988 he made enough to invest $80 million in his then-burgeoning film company, which he and Mr. Roth had started the previous fall. The name came from a 1944 Preston Sturges film called "The Miracle of Morgan's Creek."

The company also was backed by a $126 million line of credit from Signet Bank/Maryland, according to Forbes magazine, and 1989 it signed a $100 million financing deal with Nomura Babcock, a partnership of Nomura Securities of Japan and San Francisco's Babcock & Brown Co. The next year brought a $75 million revolving credit line from Signet Bank and Chemical Bank of New York.

Mr. Robinson's interest in Hollywood was sparked years earlier, according to Mr. Roth, a producer and director whose film credits included "Revenge of the Nerds" and "Bachelor Party." In Mr. Roth was producing a film for Fox called "The Stone Boy," starring Robert Duvall and Glenn Close. A Los Angeles banker told him about Mr. Robinson's interest in moviemaking, Mr. Roth said, and the Baltimore businessman added his money to Mr. Roth's expertise. The two continued to pair up through various other films during the mid-1980s.

"What I didn't know was that he was getting a self-education in Hollywood," Mr. Roth said.

What both men learned was that independent film studios trying to both produce and distribute a movie were taking their lives in their hands; witness the demise of independents Cannon Group, New World Entertainment and De Laurentiis Entertainment Group.

Like other "indies," Morgan Creek pre-sold the foreign, video and television rights to its films. "It became obvious that that was a business plan that we had stumbled onto," Mr. Roth recalled. "As long as you had the financing ahead of time . . . you could cover your production costs, but unfortunately your marketing and distribution costs could equal or exceed the production costs."

So Morgan Creek hooked up with various major studios, which own or control more than 3,000 of the nation's 14,000 first-run movie screens, to distribute the eclectic mix of films it began to produce.

Morgan Creek tried out this financing formula on "Young Guns," the 1988 western starring Charlie Sheen and other members of the Hollywood "brat pack." By pre-selling TV, foreign and syndication rights, and by sharing distribution costs through Fox, the company needed only $12 million at the box office to turn a profit for Morgan Creek, according to Forbes. The movie took in $44 million.

Other hits and near-hits followed: "Major League," the Charlie Sheen and Tom Berenger baseball comedy; "Dead Ringers," a Jeremy Irons vehicle that earned critical praise but not much money; Blake Edwards' "Skin Deep," starring John Ritter; and another critical success that failed to spark the public's imagination, "Enemies: A Love Story."

At the premiere of that Paul Mazursky film, based on a novel by Isaac Bashevis Singer, other producers praised Mr. Robinson for taking a chance on a movie that about a dozen others already had rejected, recalled Mr. Riesenbach, who attended the screening.

"He liked the movie and he liked Mazursky," he said, adding that Mr. Robinson considered it "a calculated risk."

Although the distribution deals dilute Morgan Creek's profits, they also dampen the risk. Using different distributors also has allowed the company to avoid becoming dependent on any one studio. The past success of the company's formula is one reason why Mr. Roth said that he is surprised at the direction Mr. Robinson has taken Morgan Creek lately.

Earlier this spring, the company formed a joint venture with Warner Bros. -- a much more financially stable company than Fox, Mr. Roth acknowledged. That agreement will help finance as many as 25 films over three years, a deal worth up to $1 billion, Warner told Business Week.

And after vowing to spend no more than $15 million on a picture's budget, Mr. Robinson ultimately sank a total of $22 million of Morgan Creek's money into "Robin Hood," a larger amount and percentage than the studio had committed to any previous movie. The film's budget mushroomed to $54 million from $40 million, driven by a $1.2 million winning bid on the script last year, various filming delays, $500,000 for a Sean Connery cameo and $7.5 million for Mr. Costner's work.

"It is a big risk for us," Gary Barber, Morgan Creek's chief operating officer, told Business Week. "But it is not enough to wipe out the capital base of this company."

Still, one consultant told the magazine that the movie, which is generating only mediocre reviews so far, must gross $90 million for Morgan Creek to make a profit. Since the opening weekend tends to be the most accurate indicator of a film's commercial success, Mr. Robinson may wake up tomorrow with a clear sense of whether his latest and biggest calculated risk has paid off.

Still, he has one consolation if his movie fails, should that happen with "Robin Hood." To paraphrase Humphrey Bogart in "Casablanca," Mr. Robinson will always have Baltimore.

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