End credits roll for Warners specialty units

By Borys Kit and Gregg Goldstein

LOS ANGELES/NEW YORK (Hollywood Reporter) - After Warner Bros. absorbed New Line as an in-house production label in February, industryites wondered which Warners specialty unit would remain, Warner Independent Pictures or Picturehouse. The answer came Thursday: Neither.

In a move that sent ripples of shock around town, Warners said it is was shuttering both divisions, citing cost savings and an elimination of redundant operations.

Most of the units' 70 employees are expected to lose their jobs, including all 43 Picturehouse staffers. WIP president Polly Cohen said that some of her 27 staffers will remain on board to shepherd projects to the studio. The 11-year Warners vet's contract runs for about two more years, and she will stay within Warners for now, though she's unclear in what capacity.

Some Picturehouse staffers also might remain.

The future of Picturehouse president Bob Berney was unclear Thursday, but a close associate said the executive is likely to form his own independent distribution venture, adding, "Bob is a very resourceful guy." No immediate announcement on his plans is expected.

OVERHEAD ISSUES

Warner Bros. president and COO Alan Horn said that in the competitive movie marketplace, which sees upward of 600 movies released each year, profit margins are tough to eke out, and that is exacerbated by overhead. Because New Line is part of Warners, the company is able to handle films across the spectrum of genres and budgets without overlapping production, marketing and distribution infrastructures.

"We can't justify a third overhead," Horn said. "It just doesn't make sense."  Continued...