Remember Turbulence? Its producers sure do. The 1997 thriller starring Ray Liotta as a crazed hijacker and Lauren Holly as a brave flight attendant was a box-office debacle, grossing $11.5 million in theaters against a budget of a reported $50 million.
Mike Elliott saw the celluloid disaster and thought one thing: Turbulence 2. A low-budget sequel wherein a "fear of flying" class goes for the ride of their lives. And then, improbably but inevitably, Turbulence 3, featuring a heavy-metal band in concert aboard a 747.
And here was the surprise ending: The sequels made money. Good money, actually. Both films employed inexpensive talent and some of the abundant unused aerial footage from the original. They went straight to video stores, with Turbulence 2 reaping $10 million in rentals on a $4 million investment.
That's the biz for Mike Elliott, sequel king. "When it comes to low-cost sequels, Mike is the best in the business," says Donna Sloan, senior VP of production at Lions Gate Entertainment. Elliott's company, Capital Arts Entertainment, has developed and produced sequels to name-brand movies such as TimeCop, Addams Family, Richie Rich, and Casper. His films ride existing awareness created by big marketing splashes for the originals. As a result, they could be the most consistently profitable in Tinseltown.
Elliott, 39, learned his craft from B-movie king Roger Corman, maker of 1960's Little Shop of Horrors. In his years with Corman, Elliott learned to budget, schedule, and produce films with low overhead. Today, he makes feature-length films in one month's time for between $3 million and $10 million apiece, perhaps 20% of the cost of most big-studio films. He bypasses the expensive theatrical release process, instead distributing directly to video stores or TV.
"We made up to 12 low-budget films a year [working for Corman], and I realized I could always sell a sequel like Bloodfist VII more easily than a new concept to both domestic and international video markets," says Elliott. "I even discovered that if we had a film I thought was below average, I could call it 'part two' of a film we had already made and improve its revenue prospects."
Elliott has built his sequel business by taking advantage of rights that others have overlooked or passed over. When Universal Pictures and Steven Spielberg made the original Casper movie, they chose not to purchase direct-to-video prequel and sequel rights. Partnering with 20th Century Fox Home Entertainment, Elliott snapped them up and produced not just a prequel, but a prequel sequel. Starring such past-their-prime actors as Steve Guttenberg and George Hamilton, the two films together cost $22 million to make, and they pulled in more than $150 million in gross revenues.
Elliott applies a rigid financial formula. He assumes that in a worst-case scenario, a sequel's revenue will be just 10% of the original film's—and he uses that number to set the upper bound for his budget. "If we can make the sequel for less than that amount, we'll do it." Capital Arts employs only seven people, which means the boss himself does some of the dirty work. "He'll roll up his sleeves and do whatever it takes to get the movie made," says Lance Robbins, former president of Fox Family Television Studios. At one shoot in Belize, Sloan recalls, Elliott hauled lights, delivered food, and drove the equipment truck.
Although he sticks religiously to his shoestring budgets, Elliott knows he can't let quality slip too far. "If a mom rents Beethoven IV (that's right—the big Saint Bernard) and the kids hate it, or it doesn't meet the standards she expected based on the last few, there won't be a Beethoven's Fifth." So Elliott focuses on what his audience wants from each film. "If it's a comedy, we spend more money on good scriptwriters and funny actors, and less on costumes and set design. If it's an action film, we'll spend more on stunts and special effects and less on star salaries."
Coming soon: the fifth Beethoven, set for release in time for Christmas (to the joy of mothers everywhere). And more, undoubtedly, to follow. Will the sequel king never rest? Keep watching.
A version of this article appeared in the December 2003 issue of Fast Company magazine.