MOVIE MAN

D Magazine, Sep 01, 2001 by Whitley, Glenna

THROBBING TECHNO-BEAT SOUNDtrack fills the small dark room, big enough only for six oversized yellow leather chairs and a largescreen TV. It pulses with images of mayhem: cars careening, flying fists, explosions, Matrix-style martial arts moves, and a futuristic robot wreaking havoc on sleek young Chinese and American actors.

Wearing a Hawaiian shirt and a vacation tan, 50-year-old Stephen Jarchow watches intently as the six-minute trailer for his fall movie Gen-Y Cops pounds to a close. As yet with no dialogue, the plot remains baffling, but no matter. The $6 million budget, relatively puny when it comes to action films, has gone where it counts: filling every frame with fast and furious movement. But what Jarchow also sees on the screen is the amount of work still needed before the film's release.

We're sitting in a warren of small offices at Regent Entertainment, which dominates the sixth floor of a building Jarchow owns at Preston Road and Northwest Highway. Regent Entertainment is an independent producer and distributor of low-budget movies-very lowbudget movies. Most cost $1.5 to $3 million to produce, including the stars' salaries.

Many indie producers make a movie, take it to a film festival, and pray a studio with domestic distribution picks it up to show in U.S. theaters, where success will be measured in opening weekend box office returns. Few of these movies-The Blair Witch Project notwithstanding-ever get distribution deals. Jarchow learned this unpleasant truth when one of his first films, Gods and Monsters, aired at Sundance Film Festival in Park City, Utah, to critical acclaim and got nothing but snubs from distributors.

Regent, unlike the Hollywood studios, makes American movies primarily for export. Its markets are foreign TV networks and video outlets. From Europe to Africa to Asia, the world loves American movies, even those few Americans ever see, such as Storm Chasers and Britannic, Regent's knock-offs of Twister and Titanic, featuring actresses such as Kelly McGillis and Jacqueline Bisset, once-hot stars whose careers have cooled.

"We are a conservative producer of affordable TV, film, and video product to the world," Jarchow says, sounding like a mission statement. But then he adds with a slight smile, "Occasionally we make a good movie." Regent now produces 12 to 15 movies a year and acquires another six to eight made by independents. While it's the largest independent producer of films for the Fox Family Channel, 70 percent of its revenue comes from overseas.

Also unique: Regent operates two movie theaters, the one-screen Regent Showcase in LA and the four-screen Regent Highland Park in Jarchow's own neighborhood, where it can guarantee a film an American theatrical release, no matter how tiny and no matter how long, which ups a movie's value in both domestic and foreign markets.

Jarchow has brought his expertise as a financier, honed over 20 years as a lawyer and real estate investor, to finding overseas capital and holding down production costs. But he also gets involved with his Santa Monica-based partners in everything from choosing scripts to hiring (and firing) the talent. He's even penned a story for a sci-fi film called Nostradamus.

Gen-Y Cops is Regent's first film with Media Asia, a production company that's owned in part by actor Jackie Chan, star of Shanghai Noon and Rush Hour I and II, and actress Michelle Yeoh, star of Crouching Tiger, Hidden Dragon. Media Asia put up 60 percent of the budget for the rights to the Asian and African markets; Regent put up 40 percent for rights in the United States, Europe, Canada, and South America.

Not surprisingly, considering their salaries, neither star appears in Gen -Y Cops. The American star is Paul Rudd (Cider House Rules). Most of the young Hong Kong actors are inexperienced; before the film is released, their dialogue will have to be re-dubbed. Now two-and-ahalf hours long, the movie will be cut to 90 minutes and only 10 percent Chinese dialogue before its U.S. release. But with America's burgeoning interest in Asian films, Gen-Y Cops could be a moneymaker. The production went so well that Regent recently signed an eight-picture deal with Media Asia.

In Hollywood, profitability is rare. Return on invested capital in recent years hovers around 5 percent. An investor would do better with commercial real estate.

But would it be as much fun?

On this July afternoon, Jarchow is positively bubbling. The day before he had flown to Denver to negotiate what he calls an "important" strategic alliance with a major cable provider he declines to name. If the deal is finalized this fall, little Regent will create specialized TV channels for cable and Direct TV and more than triple its annual production of films. The deal is a perfect illustration of Jarchow's focus on his core competency and calculated (but heady) risk.

The story of how a savvy, bottom-line Dallas investor like Jarchow ended up running a small but bona fide movie studio is a lesson on tapping into the inner boy, reconnecting with childhood dreams. It's also a lesson in how an outsider unimpressed by glamour can find a niche market in the entertainment business with potentially big payoffs.