How can you tell when the credit crunch is severe?

When Steven Spielberg and Peter Jackson are turned down. The two movie giants joined forces on a 3-D animated film called "Tintin," but when they submitted their budget to Universal Pictures, the studio replied "Thanks, but no thanks."

Now Spielberg has produced his share of colossal box office hits and Jackson, of course, gave us the "Lord of the Rings" trilogy. You would think a pairing of these two would never hear the "no" word. It just goes to show you that no one is immune from the current economic crisis.

Now, having said that, I'm not sure I would invest in this project either, even if I did have the money and even if we were in the midst of the best of economic times. I can't see that many people rushing to the theaters to see a film based on an obscure Belgian comic strip about the adventures of a young reporter and his dog, Snowy. Of course I am the person who predicted flatly that because science fictions had never been big box office anyway combined with the fact that the film had no bankable stars that "Star Wars" was destined to be a box office flop.

Spielberg optioned the rights to the strip right after he completed "E.T." and wanted to make it as a trilogy with Spielberg directing the first one, Jackson the second and a yet-to-be-named director for the third. The first two films were to be made back-to-back. It was to be co-financed through Paramount and Universal.

Universal, however, realized the film would have to gross $425 million for it to break even. Why? Because, like Tom Cruise, Spielberg and Jackson would produce both films and, under their contracts, that would give them 30 percent of the studio's gross revenues. That means they get $100 million before the studio earns a cent. Nice deal if you can get it. ("Mission: Impossible III" grossed $400 million, but its studio, Paramount, barely broke even on it because Cruise's production deal allowed him to take $80 million off the top.)

"Tintin" was to be filmed using performance capture technology in which actors wear sensors that record their movements which are fed into a computer and digitally manipulated. The first film, as I recall, to use this technique was "The Polar Express," not the biggest box office success of all times, by any means. In fact, I don't think any of the films using this technique ("Beowulf" and "Monster House" are the others that come to mind) have come close to grossing the $425 million at the box office needed to make "Tintin" profitable.

So what does all this mean? It probably means Spielberg is going to have to go crawling back to Paramount and ask it to fund the entire project. That could be dicey because Spielberg and his Dreamworks partner David Geffen are also trying to sever their Dreamworks relationship with Paramount.

Today's Los Angeles Times has even more details on all this and if you are interested in additional reading on this subject you can go here.