FilmFour facing closure over box-office turkeys

FilmFour, the Channel 4 offshoot set up to champion British movie-making talent, is on the brink of closure after two years of multi-million-pound losses.

The pioneering production house, whose cinematic hits have ranged from My Beautiful Laundrette to Trainspotting, will be drastically shrunk or dismantled altogether unless a last-ditch rescue plan can be agreed with outside investors.

The decision is due to be taken next week by the Channel 4 board, which is under orders from new chief executive Mark Thompson to reverse last year's £65m loss by the station's commercial arm, 4Ventures.

Frustrated by big-budget flops like the recent period drama Charlotte Gray, Mr Thompson is understood to favour a "back-to-basics" approach for FilmFour which would see it return to its roots as Channel 4's in-house production arm for films aimed largely at TV audiences.

If some form of major cutback takes place, FilmFour operations will be "re-absorbed" within the channel's central London HQ – spelling an end to its days as a leading player in the UK movie market.

News of FilmFour's plight was greeted with frustration last night by directors and producers, including Harvey Weinstein, the boss of the US independent giant Miramax, who dismissed the idea of closure as "the most foolish thing" Channel 4 could do.

"If anybody pulls the plug on FilmFour, especially right now, they would be making a huge mistake," he told The Independent on Sunday. "FilmFour is the best thing that ever happened to the British film industry. It has built up a great library of movies.

"Movies I made 10 years ago that didn't make much money are now making good profits because of video and DVD sales. Movie companies are built on the strengths of their libraries – stay the course and you will win."

He added that the idea of closing FilmFour at the present time was particularly ironic as several of its forthcoming ventures have the potential to become huge commercial successes. Among these prospective hits is Edgardo Mortara, an Italian period drama about a boy who is kidnapped by the Roman Catholic Church, which will star Sir Anthony Hopkins.

Mr Weinstein's views were echoed by the veteran producer Stephen Woolley, whose FilmFour credits include the Oscar-winning thriller The Crying Game. He said closure would deprive the British film industry of the only major home-grown company committed to nurturing up-and-coming talent.

"It has long been one of the only places where budding talent can get a break," he said. "We don't have many financiers in this country, so without it it's difficult to know where people will go."

When Channel 4's board meets on 8 July, it will be presented with three clear options for the future of FilmFour. The preferred course of action is for the company, which slipped out of profit in 1999 and made a £5m loss last year, to form some kind of partnership with another production house. Negotiations are under way with several independent companies, including London-based Signpost Films.

However, if FilmFour fails to make convincing progress with these talks within the week, the board will have to decide whether to slash its annual £30m investment budget by up to two-thirds or order its effective closure.

Industry insiders say that, for all the talk of last-minute rescue packages, it is virtually a foregone conclusion that FilmFour will cease to exist.

Whatever FilmFour's fate, Channel 4 remains committed to its FilmFour and E4 digital stations, which it insists are "on target" to break even, despite heavy losses last year.

The hits...

Trainspotting (1996)

Stars: Ewan McGregor, Robert Carlyle

Director: Danny Boyle

Budget: £2.4m

Box office: £23m

The Full Monty (1997)

Stars: Robert Carlyle, Tom Wilkinson

Director: Peter Cattaneo

Budget: £2.4m

Box office: £159m

East Is East (1999)

Stars: Om Puri, Linda Bassett

Director: Damien O'Donnell

Budget: £1.9m

Box office: £12.8m

...and misses

Velvet Goldmine (1998)

Stars: Ewan McGregor, Jonathan Rhys-Meyers

Director: Todd Haynes

Budget: £4.6m

Box office: £300,000

Charlotte Gray (2001)

Stars: Cate Blanchett, Billy Crudup

Director: Gillian Armstrong

Budget: £15m

Box office: £1.8m

Lucky Break (2001)

Stars: James Nesbitt, Timothy Spall

Director: Peter Cattaneo

Budget: £4m

Box office: £1.2m

By Elizabeth Hollander