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To: brian h who wrote (7473)4/29/2006 11:36:09 PM
From: Jon Koplik1 Recommendation   of 9417
 
NYT -- How a Hit [American Idol] Almost Failed Its Own Audition ................................

April 30, 2006

How a Hit Almost Failed Its Own Audition

By BILL CARTER

Network television programmers face a challenging job, though not a complicated one: they need to find hits. That's why they spend millions to find and hire talented writers, actors and producers. In many cases they would be wiser to invest in a catcher's mitt, because really big hits, ones that can transform the fates of networks — and of network executives — tend to fall from the sky. Here is the story of how "American Idol," the biggest hit on television, hovered over every network in 2001, waiting for one of them to grab it. This article is adapted from "Desperate Networks" by Bill Carter, a reporter for The New York Times. Doubleday will publish the book on Tuesday.

SIMON COWELL sat at a meeting in Los Angeles with executives from someplace he had never heard of, something called the UPN network. Mr. Cowell, a British music executive, had never pitched a television show in America before — and the way things were going, he felt as though he never would again.

The UPN executives who sat across the table from Mr. Cowell at that meeting in April 2001 clearly had no clue who this guy was, and, apparently, even less interest in finding out. Maybe they knew his business partner, Simon Fuller, from his leadership of the Spice Girls. Surely, they had heard of the Spice Girls. But, then again, as Mr. Cowell checked those blank, uninterested faces, maybe not.

No matter. Mr. Cowell had enormous faith in the idea that he and Mr. Fuller had for a music-based television show. Mr. Fuller was the most successful manager of music acts in Britain and he, Mr. Cowell, was the most successful artist and repertoire man — that is, music label talent manager — currently working there. They both knew how to launch new singing artists, and now they had an idea for a show that would allow them to utilize their talents on camera.

Despite the wall he sensed going up at the UPN meeting, Mr. Cowell, never cowed, simply plowed ahead with his pitch. "What this is really about is the American dream," Mr. Cowell told the American executives in his smooth British tones. He laid out the format for the show that he and Mr. Fuller were calling "Pop Idol" in Britain, describing how exciting this show would surely be. When Mr. Cowell wrapped up his comments, the room went quiet — stone silent.

At the opposite end of the table, a young woman executive, whom Mr. Cowell had identified in his head as the "lippy second-in-command," seemed to be calculating whether or not this truly was the end of the presentation.

"And what exactly do you think we're supposed to be doing for you?" the woman said, dismissively.

"Well, actually, sweetheart," Mr. Cowell replied, applying just a dash of acid, "it's more a question of what I could be doing for you."

Again a terrible silence fell. Then the woman piped up: "Well, we'll get back to you."

Mr. Cowell said he had heard that line before — too many times for it to bother him during his sojourn in the United States trying to spark some American interest in this hot idea. He and Mr. Fuller and a third partner, yet another Simon — Simon Jones, an executive with Thames Television — had paid calls to the broadcast networks, to MTV and to other cable networks. Every one of them had a free shot that April at landing the show that the three Simons were putting on offer. No one showed the least interest, and many of the network executives offered shoulders so cold that Mr. Cowell could have chilled his wine on them. Uniformly, they had been, Mr. Cowell was convinced, the worst, most appalling meetings of his life.

The contrast with how "Pop Idol" had been sold in Britain could not have been sharper. Mr. Cowell and Mr. Fuller met with representatives of the British network ITV, spent what Mr. Cowell estimated was no more than 30 seconds describing the idea, and they had a deal. But, of course, the two Simons had enormous reputations in the British entertainment world, and they were entering a market that had already embraced music-oriented reality shows.

In Britain, "Pop Stars," a show that was originally developed in Australia and traced the formation of a singing group, had engrossed the nation. Another music show, "Fame Academy," had also done extremely well.

Mr. Cowell had been invited to be a judge on the first edition of "Pop Stars," and, at first, had accepted. But he quickly had misgivings about being a person who ran a music label going on television to demonstrate how to put together a group. Mr. Cowell thought it was "like a magician showing how you saw somebody in half." He bowed out.

When Mr. Cowell got a first glimpse of "Pop Stars," however, he knew he had made a mistake. The show looked like a piping hot hit to him — though he had an instant insight. To him, the attractive part of "Pop Stars" was the round of auditions to select the band members. He thought that, as constituted, "Pop Stars" had no ending. With Mr. Fuller he conceived a show built around seasonlong tryouts with the winner announced at the end.

What Mr. Cowell told ITV was this: "It will have all the fun of 'Pop Stars,' but we can do it better. We can do it a lot harsher than on 'Pop Stars,' and the public will vote and choose the winner. And we won't be relying on the music to make the show successful: it will be a soap opera."

Mr. Cowell also volunteered himself as a judge, knowing that he had the precise expertise called for in selecting a singing star. Mr. Fuller and his company, 19 Entertainment, owned the show along with Fremantle Media, a big European production company. Mr. Cowell took no ownership stake, but he did get royalty rights for his label, Syco Records, a part of the BMG Music Group, on every recording released by an "Idol" performer worldwide. That was the essence of the show's appeal for Mr. Cowell.

All he was concerned with was that the right person would win, so that he would get access to a good artist. If the show was a hit, so much the better; Mr. Cowell's new artist was more likely to sell a lot of records that way.

When Mr. Cowell started shooting "Pop Idol" in England in the summer of 2001, the production plan called for four judges to sit in an audition room while contestants trooped in, one by one. The judges would discuss each singer after he or she left the room. Nothing more specific was spelled out.

The first auditions took place in Manchester. But by the time five or six singers had walked through, sung and then had their performances rehashed by the judges after they had left the room, Mr. Cowell was almost crawling up the walls.

"I'm dying in here," he told the producers. "This is not like a real-life audition." He turned to one of the other judges, the veteran British pop producer Pete Waterman, and said: "We have to actually tell the performers to their faces what we thought. We've just got to tell these boys and girls the truth. They're rubbish."

Mr. Cowell had invited Mr. Waterman to work as a judge, expecting him to be what Mr. Cowell described as the "nasty" one. But Mr. Waterman got more emotional on the show than Mr. Cowell expected. (It was published in the British press that he actually teared up at one performance). Mr. Cowell, meanwhile, acted no differently on the air than he did at real auditions — he was cold and distant. And his comments reflected that.

As the show took off after its premiere that October, the British press concentrated on Mr. Cowell and his barbed comments. He was the nasty one, the "mouthy" one. The show quickly began to revolve around Mr. Cowell and his withering appraisals of the wretched talent being brought before him.

"Pop Idol" was the hit of the year in Britain. The two finalists both released albums after the show concluded and sold millions of copies. Mr. Fuller had two new hit artists to manage; Mr. Cowell's label had two huge-selling albums. Their collaboration was a ringing success — and they were just getting started.

Alix Hartley, a British-born talent agent with an expertise in music, who worked for the Creative Artists Agency, the heavyweight Hollywood talent agency, was a natural to represent Mr. Fuller in the challenge of going back to the networks in the fall of 2001 and finding "Pop Idol" a home on American television.

Given how both "Who Wants to Be a Millionaire" and "Survivor" — both conceived by British producers — had emerged as hits on American television in the summer months, C.A.A.'s strategy was to pitch "Pop Idol" around as a perfect new reality programming vehicle for the summer of 2002. It was light, entertaining and not very expensive to produce. As an added advantage, having started a 15-week British run in October, it would have fully executed weekly editions on tape to serve as the template for the American version.

ANDREA WONG, who ran the reality-programming department for ABC, was an ideal target for the C.A.A. pitch. She was aggressively seeking reality programs and had been closely watching the British market in the wake of her network's failure to secure "Survivor" when it had twice been in ABC's clutches.

But C.A.A. and the producers of "Pop Idol" ran into a problem that "Survivor" never had to face. Music had already failed in the United States in reality formats on two networks, one being ABC.

That network tried a show in 2000 called "Making the Band," about assembling a boy-band singing group. Though it had a small following, mostly among pubescent girls, the show simply could not cross over into a wider audience. The music format was blamed. Music had become just too stratified, the argument went, to ever build a wide-enough appeal in the United States to succeed on the scale that an American network television show required.

The WB network, which was mainly the network of pubescent girls, tried a similar format the next season with a show that the network called "Pop Stars," a format derived from the Australian and British models of the same name — only with an-all girl group. It, too, found only a niche audience.

Ms. Wong knew all of that when C.A.A. came in touting "Pop Idol." She passed. C.A.A. next met with NBC's reality executives. They passed. The agency never set up a formal meeting with CBS's reality division, feeling as though an initial phone call to CBS had fallen utterly flat.

That left Fox. The British producers had gotten nowhere in the spring when they tried to interest Fox's reality division, headed by Mike Darnell, in "Pop Idol." But C.A.A. made a new effort anyway. This time Ms. Hartley of C.A.A. and Mr. Fuller — without Mr. Cowell this time — went in to see Mr. Darnell himself.

Mr. Fuller pitched his idea with fervent passion, and that impressed Mr. Darnell. He really liked the notion that the format would essentially be all audition, complete with a lot of really woeful early performances. Mr. Darnell had never liked the band-making shows once they got past the auditions. Here was a format in which the auditions, replete with people making cringe-inducing fools of themselves, would rule.

Mr. Darnell, thinking of summer budgets at Fox, wanted to know if the show had sponsorship attached. Ms. Hartley told him that C.A.A. was working on that very angle. Mr. Darnell told Ms. Hartley and Mr. Fuller that they should bring up the idea with Sandy Grushow, the head of entertainment for Fox, and his chief lieutenant, Gail Berman.

When Mr. Grushow and Ms. Berman heard the pitch, both had the same reaction: tepid. A talent contest did not sound like inspiring television in the 21st century — or like a breakout hit, for which Fox had an increasingly searing need at that point.

But both executives knew that the network could also use something that might pass for fresh summer programming. The problem was, Fox was out of money. The program budget for the year was exhausted, bone dry.

Mr. Grushow told the C.A.A. representatives that Fox was simply not going to pay a license fee for this program — if it was going to get on the air, it would have to be as a fully sponsored broadcast. "We don't know much about this show," Mr. Grushow told them. "But if we can get it for nothing, it's sort of a no-brainer."

C.A.A. indicated that, of course, it could line up sponsors. Fox said: Come back to us when you do.

By this point, early in winter, "Pop Idol" had become the talk of Britain. Fox had made no effort to secure the show, so C.A.A. went back to Ms. Wong from ABC, armed with those mighty ratings from the British run. She asked to see a tape of the British show. That was encouraging. A tape was delivered. Ms. Wong watched it — and passed again.

The impasse with Fox continued. C.A.A. heard nothing from Mr. Darnell. Ms. Berman and Mr. Grushow continued to press for a fully sponsored show; nothing was happening, despite the fabulous success in Britain.

But even as talks with Fox dragged on, C.A.A. was trying to exploit a connection that some at the agency believed might play out to their advantage. Back in October, several C.A.A. executives had met with Elisabeth Murdoch, daughter of Rupert Murdoch, the founder and chief executive of the News Corporation, which owns Fox. The meeting took place at Mipcom, the international television programming festival in Cannes, France. A blossoming relationship took hold there.

With the talks about "Idol" stalled in Los Angeles, the C.A.A. representatives at one point mentioned the show in a conversation with Ms. Murdoch, who ran the News Corporation's most important television operation in England, the BSkyB satellite channel. She, of course, was witnessing the phenomenon of "Pop Idol" firsthand, on her home TV set.

Fortunately for C.A.A., Ms. Murdoch flat-out loved the show. Hearing that her father's American network had yet to act on making a deal for the United States rights, she decided to give the process a helpful nudge. She called her father and told him how much she loved "Pop Idol" and how big the show was becoming in England. She urged him to buy the rights for Fox.

Mr. Murdoch put in a call the next day to Peter Chernin, his No. 2 at the News Corporation and the top decision-maker on all the biggest moves made by the Fox network. "What's going on with this show 'Pop Idol,' Peter?" Mr. Murdoch asked Mr. Chernin. "It's a big hit in England. I spoke to Liz and she says it's great."

Mr. Chernin was familiar enough with the situation to report that Fox's network people had been talking about it with the agency, discussing potential advertising backers. "We're still looking at it," he said.

Mr. Murdoch shot back: "Don't look at it. Buy it! Right now."

With those marching orders ringing in his ears, Mr. Chernin followed up quickly, calling Mr. Grushow and Ms. Berman. He asked them the status of "Pop Idol." They told him that they were still waiting for the advertiser sponsorships to come through.

"Just close the deal," Mr. Chernin said. He explained the call from Mr. Murdoch.

Mr. Grushow said, "We'll get it closed today."

The actual order for the series suddenly changed as well. Instead of an eight-episode summer order, Fox began asking C.A.A. for the rights to broadcast 15 episodes — the same duration as the show in Britain. The C.A.A. agents concluded that one of the Murdochs, or maybe both, had insisted that the show be done exactly as it was in England.

That did not mean that Fox would import the British hosts and judges. Fox fully expected to hire figures from the American music industry for those jobs. But after the deal was concluded, and Mr. Grushow finally was able to watch a tape of the British version, he told Ms. Berman that he was taken by the nastily charismatic figure on the British judging panel. "I think as part of the deal, we should insist on bringing this guy over as a judge," he said. At that point, he could not remember Simon Cowell's name.

"Pop Idol" made Mr. Cowell one of the most talked-about cultural figures in Britain in the winter of 2002. He was a tabloid newspaper's dream: seen by millions every week on television, saying something outrageously quotable ("You're a disaster"), doing something unconscionably cruel (several young women left the auditions convulsed in tears after hearing his corrosive assessments of their talents) and tirelessly promoting his program (by doing every sort of interview in print and on television and radio).

Mr. Cowell said he was pleased when he heard that the show had finally sold in the United States but mildly shocked when he learned that Fox was requesting that he come along to be a judge on the American version. He had not planned on turning himself into an international television star; he said he wanted only to make the show a hit for the benefit of his record label.

At first he had doubts about whether he knew enough about American music to judge American singers. He was also concerned because of the way American television executives functioned during those hideous meetings in the spring. He expected that some genius at the American network was bound to try to water down the show, and especially his honestly acerbic comments. He would have no interest in a sweetened version of "Pop Idol."

Then Kevin Warwick, one of the producers of the British show, called. "Look, Simon, we're going over to produce the show in America," he said. "I will look after your back again. You won't have to compromise what you do. You can be yourself."

Mr. Cowell asked, "So I can really be the same as I was in England?"

Mr. Warwick assured him that he could.

A few weeks later, Mr. Cowell arrived in Los Angeles for his first round of meetings with Fox and the American producer, Brian Gadinsky. At first they considered rechristening it "America's Idol." Mr. Darnell thought that made it sound as if it might be about a New York fireman, so he suggested "American Idol." (Nobody wanted "pop" in the title because nobody in the music business in the United States ever used the word "pop" anymore — with the exception of Michael Jackson — and because "Pop Stars" had been a failure for the WB network.)

Mr. Murdoch, as he often did, sat in on a meeting that winter to go over the full development slate for the network. When it came time to talk about reality programs, he jumped right in and asked about "Idol." Mr. Darnell was ready with his plans for how to execute the format. "Here's what I want to do," he began.

Mr. Murdoch cut him off. "You don't change a thing," he said, according to one of the Fox executives in the meeting. "This show works in England. And you're going to make the same show they made in England. The problem with you Hollywood people is you always want to change things and you ruin everything."

Mr. Murdoch had not likely studied the structure of the British format to determine that it was flawless. But he did know that the network would not have "Idol" had he not insisted on it.

No one would think of challenging Mr. Murdoch's views, but some Fox executives really did believe that the British format had some obvious flaws. For one thing, it had two hosts, which surely made the show seem unnecessarily cluttered. And the four-judge panel invited trouble because it was an even number. If the judges split two to two, the format called for Mr. Cowell to break the tie, but that seemed actually to reduce the number of judges to one.

FOX had not signed Mr. Cowell to a contract — at his insistence. He told the Fox executives, "I'll do one season and see how it goes." That was music to the ears of the Fox group, still worried about the expense of this little summer show that had suddenly grown to 15 episodes. Nobody really knew how the show would do. Mr. Cowell was still emphasizing that he was in it not for the fame or the salary, but for the money that would come from having yet another hot artist for his label. He did not even acquire an American agent — not right away.

The whole Fox network operation impressed Mr. Cowell because there was never a hint of an attempt to censor him or to turn him into a sweetheart of a guy. Fox seemed to him to be bravely acknowledging that the American audience, like the British audience, was ready to rebel against what Mr. Cowell called "the terrible political correctness that invaded America and England."

To Mr. Cowell, it looked as if Fox was going to allow the audience to see something that wasn't sanitized for a change. They would embrace the fact that with Mr. Cowell doing the talking, "lots of useless people were going to be told that they were useless."

The selection of the other judges went relatively smoothly. When Fox brought in Randy Jackson, the onetime bass player for the band Journey who became a successful producer and talent manager for Columbia Records, Mr. Cowell liked him immediately. When Mr. Cowell heard that Paula Abdul would also be named a judge, Mr. Cowell thought that she was also a solid choice, given her long music career in the United States.

Mr. Cowell did not meet Ms. Abdul until the first round of auditions for the show, which took place in Los Angeles. At that point, no one at Fox had ever even seen the three judges interact with one another. A fourth judge had still not been chosen, but given how much time the auditions were expected to take, the idea was to start with three and, if a fourth was found, to add him or her later.

Almost nothing was said among the judges before the first auditions rolled. Ms. Abdul seemed quiet and polite to Mr. Cowell; Mr. Jackson was affable. The first singers came in. They had already been screened, of course, and included a healthy mixture of respectable warblers and tone-deaf screechers.

This was teed up for Mr. Cowell, who unleashed his lash on every offending wannabe. He told one girl to get a lawyer and to sue her vocal coach. Others he labeled with such terms as wretched, horrid, pathetic. When one kid said he would someday regret all the hearts he was breaking, Mr. Cowell dismissed him with the line, "You're a loser."

The chorus of put-downs was clearly not what Ms. Abdul had been expecting. Several times during the first day, she looked over at Mr. Cowell in shock. He took notice. Apparently, Ms. Abdul had been anticipating the kind of audition that American kids usually got: "Oh, you were great! Thanks, we'll let you know." Instead, they were leaving either angry or in tears.

After the taping, Mr. Cowell cornered the producers. "I think Paula is going to walk," he told them. "I don't think she's going to want to continue to do the show." Ms. Abdul did not quit, but the relationship between her and Mr. Cowell was instantly tense. Their fractiousness on the air in those early shows was definitely not a put-on, Mr. Cowell said.

As the auditions moved on to a second round, Mr. Cowell remained concerned about how Ms. Abdul was going react to his give-no-quarter style. Just before the taping was to begin, one of the newer American producers came up to him with a long sheet of paper in his hand. He offered it to Mr. Cowell.

"What is it?" Mr. Cowell said.

"We've written a script for you today," the producer said.

"What do you mean a script?" the befuddled Mr. Cowell said.

"We've written put-downs for you, more put-downs," the producer said.

"What do you mean, you've written me put-downs?"

"Well, you're scripted, aren't you?" the producer said.

"No, I'm not scripted," Mr. Cowell said, now more appalled than surprised.

"Well, do you want these?" the producer said, offering the list again.

"No!" Mr. Cowell said, utterly indignant at the insult. Apparently these people were accustomed to everything being scripted.

AFTER the auditions, Mr. Cowell flew home to London. He was confident that the show would make great television. He had no idea if it would break through and be a hit, because he felt that he could not predict American tastes the way he could British tastes. But he was more than satisfied with how the auditions had gone. He would return for the live-performance shows just after the first few editions of "American Idol" went on the air.

Mr. Cowell was back at his day job in London on June 11, 2002. He had music artists and selling records on his mind, not "American Idol." The fact that the show had gone on the air the previous night in the United States had slipped his mind.

About 3 p.m. London time, he got a call. It was one of the "Idol" staff members in Los Angeles. When Mr. Cowell picked up the phone, the guy on the other end was so excited that he could hardly get the words out.

"Simon, this is amazing; it's a hit," the voice said.

Confused for a moment, Mr. Cowell said: "What are you talking about? What's a hit?"

" 'American Idol.' We opened last night, and the ratings are going through the roof."

"Fantastic!" Mr. Cowell said. "I'm really pleased."

The report was only a slight exaggeration. "Idol" was the most-watched show on American television, with 10 million viewers, on the Tuesday when it had its premiere; the next night it eclipsed 11 million. Both ranked even better among the young viewers whom Fox coveted, beating all competition in the 18-to-49 age group and, even better, finished first and second for the week among viewers 18 to 34.

Mr. Cowell immediately embarked on a round of publicity, doing 50 interviews with American radio stations in one day alone. Of course, the phenomenon that would soon dominate American pop culture — and ignite Fox on a spectacular ratings run toward real competitive balance with the other three networks — was only beginning. Within a matter of weeks, Fox was making arrangements to bring "Idol" back in the regular season, starting the following January.

"American Idol" would not be only the "game changer" that Mr. Grushow and Fox had been searching for.

It would be a business-changer for all of network television.

Copyright 2006 The New York Times Company.

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To: brian h who wrote (7473)4/30/2006 9:41:08 PM
From: Jon Koplik   of 9417
 
WSJ -- Defying the Odds, Hedge Funds Bet Billions on Movies ...............................

April 29, 2006

Creative Financing

Defying the Odds, Hedge Funds Bet Billions on Movies

They Try Computer Models To Help Pick the Winners; Waiting in Line for Profits

Why 'Harry Potter' Is Off Limits

By KATE KELLY

For decades, movie studios have gladly accepted millions of dollars from a group of investors collectively dismissed as "dumb money": deep-pocketed dentists, oil tycoons and other wealthy individuals eager for a piece of the glamorous, but high-risk, game of film production. But the biggest influx of money in Hollywood these days is coming from sharks, not suckers: hedge funds, private-equity funds and investment banks.

Over the past two years, these investors have provided more than $4 billion in movie financing to the major film studios, perhaps the biggest flood of outside investment money ever. Their beneficiaries range from Walt Disney Co. and Sony Corp.'s Sony Pictures Entertainment to the actor Richard Gere, who is trying to raise more than $50 million to finance a series of movies he wants to produce.

The new players are doing more than just lending Hollywood money, as Wall Street has in the past. In a rapidly changing world of distribution, they are betting big on movies by claiming a share of the revenue after certain costs from movie tickets, DVDs, pay-television sales and related merchandise. While it's too soon to judge how the newcomers will fare, early indicators suggest that the returns may be modest at best.

Wall Street has historically shied away from dabbling in movie production, which was considered a fool's game because of the difficulties inherent in predicting the public's fickle tastes. But a handful of hedge funds and other money managers, flush with cash and eager to find investments that don't rise and fall with the broad stock, bond and currency markets, are plunging in. They see Hollywood as a $50 billion industry with the promise of double-digit returns for the right portfolios of movies. Armed with computer-driven investment simulations, some think they can pick movies with the right characteristics to make money.

"For me, it's a widget business," says Ryan Kavanaugh, a former venture capitalist who lost his shirt -- and was hit with some shareholder lawsuits -- in the dot-com bust but has had a key role in a number of recent film-financing deals. "As long as it fits the [investment] model, we don't care."

Companies like Deutsche Bank AG, Merrill Lynch & Co. and the hedge fund Stark Investments have recently invested a bundle in Hollywood. They have set up roughly a dozen financing vehicles in the last two years, mostly structured as limited partnerships or limited liability companies. A few of the vehicles, such as Legendary Pictures LLC, also function as operating companies with their own management.

Pitfalls of the Business

Yet in a business where the conventional wisdom says that 10% of a studio's films are responsible for 100% of its profits, even a passel of Harvard Business School graduates may not be immune to the pitfalls faced by nearly every investor to have hit the intersection of Hollywood and Vine.

Some long-time investors in the sector think the downpour of new cash won't last long. "The question is not if the money will dry up, but when," says John Miller, a managing director at J.P. Morgan Chase & Co. who has dealt with the entertainment sector for almost 40 years. Except in a handful of cases, Mr. Miller has stuck to lending Hollywood money, instead of taking what amounts to equity stakes in films.

The problem is that under the terms of most co-financing deals, the new investors are often the last in line to get paid. Once exhibitors take their half of ticket sales, many studios take a distribution fee of 10% to 15% of what's left from the box office. Then, the movie's production and marketing costs are paid back, and any A-list actors or directors pocket their shares. After that, the revenue-sharing process begins -- and it continues for the next five or more years as revenue flows in from DVD sales, pay-cable showings, and toy or other merchandise sales.

Hollywood has been hungry for new financing sources as the film business has grappled with escalating risk. In the U.S., movie attendance has crept lower in recent years and is down steeply from the heyday of the 1940s. Nowadays, the most profitable pictures are at the extremes. They are either small-budget specialty films like "Brokeback Mountain" -- whose costs are so low that even modest box-office traffic can make them cash machines. Or they are big-budget, character-driven juggernauts like the "Harry Potter" film franchise, which has so far generated $6.4 billion in consumer spending for Time Warner Inc.'s Warner Bros. Entertainment studio.

At the same time, the once-robust growth of DVD sales has slackened and new distribution channels, such as Internet downloading sites and mobile-phone screens, threaten to upend the film industry's historic business model.

Melrose Investors, a fund set up by Merrill Lynch two years ago to finance films with Viacom Inc.'s Paramount Pictures, shows some of the barriers to breakout profits. Through Melrose, Merrill and a group of investors provided capital to front 20% of the production budget for 25 consecutive Paramount films, the equivalent of about two years of a studio's output. But along with box-office hits that are likely to make money such as the teen comedy "Mean Girls" and the Steven Spielberg-directed "War of the Worlds," Paramount's in the past two years has put out duds like a remake of "Alfie" and the romantic comedy "Elizabethtown," neither of which is likely to break even.

Despite the hits and misses, "we remain very comfortable with the sector," says Michael Blum, head of Merrill's global structured finance group.

Legendary was set up through a partnership with Warner Bros. by, among others, Thomas Tull, a former private-equity manager, and Scott Mednick, a movie marketer who designed logos for Sony Pictures and its Columbia and Tristar labels. The structure it pioneered involved financiers picking from a selection of planned films offered by the studio. The rub: The studios often keep off the table reliable franchise pictures -- like "Harry Potter" in the case of Legendary -- that are the most surefire bets.

Most Hollywood films are funded largely in-house or through partnerships with competing studios, which sometimes offer cash upfront in exchange for the rights to distribute the movie overseas. Some studios also hire banks like J.P. Morgan to set up revolving credit lines.

Outside investing in Hollywood dates to at least the 1920s, when the Texas oil-and-tool heir Howard Hughes set his sights on moviemaking. More recently, former eBay Inc. President Jeff Skoll, telecommunications executive Philip Anschutz and Los Angeles billionaire Steve Bing have jumped in, with mixed results. Mr. Anschutz poured tens of millions into the unsuccessful "Around the World in 80 Days." But he recently hit pay dirt with "The Chronicles of Narnia: The Lion, the Witch, and the Wardrobe" that took in more than $700 million in global ticket sales. More "Narnia" movies are now planned with Disney, which distributed the movie in theaters and shared its production costs.

In the 1980s, individual investors got a taste of the business through multipicture financing packages often sold through retail brokerage firms. These included the Silver Screen Partnerships, which funded Disney movies, and Delphi Film Associates -- a fund that funneled money to Columbia Pictures, now a unit of Sony. Those deals helped finance some successful pictures, like the hit Bill Murray comedy "Ghostbusters." But after production costs and at-times hefty brokerage fees, profits for investors were often slim or nonexistent.

In the 1990s, the studios and Wall Street drew closer and more sophisticated. Some studios set up shell film companies in Germany, where a legislative loophole permitted them to pocket income from tax deductions before productions even began. Others raised money by hiring bankers to orchestrate elaborate securitization deals, in which investors purchased securities representing a slice of the revenue from a slate of upcoming films.

Trolling for Deals

Today, dealmakers like the 31-year-old Mr. Kavanaugh, the broker of several recent large transactions, are scouring Hollywood for deals. As early as age 19, the Los Angeles native rode the technology wave by raising venture capital for startup companies. He got burned in the process -- losing his own money on the investments and facing a handful of investor lawsuits. Late in 2002, after a complaint filed by the Los Angeles public-relations executive Michael Sitrick, a former investor in Mr. Kavanaugh's ventures, an $8 million arbitration judgment was made against the young dealmaker. According to legal documents, Mr. Sitrick agreed not to collect because Mr. Kavanaugh claimed at the time that he could not pay.

Mr. Kavanaugh acknowledges the litigation, but emphasizes that at least one suit resulted in his favor. He adds that the vast majority of his venture-capital partners got out of their investments either wealthier or intact. Back in the 1990s, "I existed in a high-risk world of venture capital," says Mr. Kavanaugh, "and we're in a litigious society. Our investors, overall, didn't lose money."

Mr. Kavanaugh re-emerged on the Southern California business scene a few years ago with his current company, Relativity Media. Using some of his contacts from the go-go days, Mr. Kavanaugh began brokering studio meetings for investment bankers who were having trouble getting through the door.

Before long, he had helped broker a number of deals between studios and financing partners. Among them: a $264 million agreement between Warner Bros. and Virtual Studios. Virtual, an operating company that has committed more than $800 million to various film projects, is wholly owned by hedge fund Stark Investments, a St. Francis, Wis., entity with $8 billion under management. Months later, Mr. Kavanaugh closed on a deal to set up a $600 million fund called Gun Hill Road. It pooled money from Deutsche Bank and a group of institutional investors for a slate of films from Sony Pictures Entertainment and Universal, now a unit of General Electric Co. Mr. Kavanaugh declined to comment on his financial performance, although he said the business was "lucrative."

Legendary, which built up a $600 million war chest over the past two years, highlights the tortured path that investors who pick their own films can face. Messrs. Tull and Mednick spent more than a year on the road trying to raise capital. The group of debt and equity participants they ultimately signed included a wide array of institutional investors including the pension fund of the technology and manufacturing giant Honeywell International Inc. and the private-equity arm of Bank of America Corp.

The Legendary dealmakers argued that sophisticated computer software could help make smart selections among a pool of upcoming films offered by Warner Bros. They put their faith in a statistical approach, employing a computer-driven odds assessment technique called a Monte Carlo simulation. By feeding factors like budget and box-office results into the model, Legendary came up with a set of cost parameters and movie genres that appeared more likely to make money.

In its five-year, 25-movie co-financing deal with Warner Bros., Legendary will put up 50% of the production costs for those films. In exchange, Legendary will receive 50% of the revenue after certain costs and adjustments. Its first pick, last summer's successful, $150 million budgeted superhero flick "Batman Begins," generated $372 million in world-wide ticket sales.

But eking out profits, even on a hit like "Batman," can be tough, as a rough calculation shows. After all the various parties get their cuts, Legendary actually is still several million dollars in the red on box-office sales alone, according to people familiar with the matter. Still, it is likely to turn a profit on the investment thanks to DVDs and other ancillary products, of which Legendary gets 50%, the people familiar with the deal say. But whether Legendary's other, future films perform well remains to be seen.

As he tried to raise capital, Legendary's Mr. Tull was constantly asked about the risks of the movie business. "We discussed the [horror] stories of people showing up in Hollywood with money bags and coming back with empty pockets," he recalls. His message: that with more transparent studio accounting and smarter investment models for financiers, things had changed for the better. "We wouldn't have been interested in this five years ago," he recalls telling prospective investors.

And while Warner Bros. has kept only one prized movie franchise at bay, other studios are even stingier with their prime franchises, investors and underwriters say. Disney withheld both "The Chronicles of Narnia" and "Pirates of the Caribbean" from a 2005 co-financing deal. Sony, meanwhile, withheld attractive vehicles like "Spider-Man 3," due out in 2007, the upcoming James Bond picture "Casino Royale" and "The Da Vinci Code," to be released in mid-May, from their Gun Hill Road agreement. "Certain films are different sorts of candidates to be financed than others," says Bob Osher, chief operating officer of Sony Pictures.

Write to Kate Kelly at kate.kelly@wsj.com

Copyright © 2006 Dow Jones & Company, Inc. All Rights Reserved.

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From: Maurice Winn5/7/2006 3:57:03 AM
   of 9417
 
Nice song about Big Ben and the Federal Reserve: www0.gsb.columbia.edu 

Mqurice

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From: carranza25/13/2006 11:35:51 AM
   of 9417
 
Ice cream vans becoming extinct in Britain:

>>>Why ice-cream vans face total meltdown
By Rajeev Syal and David Sanderson

Those familiar jingles could be a thing of the past if a health campaign succeeds


FOR 60 years the tinny jingle of Greensleeves that announced the arrival of the ice-cream van has been an indelible memory of childhood, but that sound may soon be removed from suburban streets. Health lobbyists have decided that ice-creams are too much of a danger to children’s health.


MPs and health officials are planning a series of measures across the country that are already forcing Mr Whippy and his helpers into meltdown.

Under an amendment to the Education and Inspection Bill to be put forward this week, local authorities will be given new powers to stop ice-cream vans from operating near school gates. The move comes as operators claim that they are already being forced out of business by an over-zealous health lobby.

Local authorities have in recent weeks banned ice-cream vans from using pay-and-display parking spaces and set up “ice-cream-free”exclusion zones around busy shopping streets. Newham council, in east London, informed vendors last month that it would fine van owners up to £80 if they used pay-and-display bays. Greenwich council, in southeast London, has banned the vans from its streets altogether, while in Scotland, West Dunbartonshire council has introduced an exclusion zone around schools for vans.

Mark Gossage, the director of Ice Cream Alliance that represented 20,000 van owners in the 1960s and now has 700 members, said that many of his members can no longer make a living. “Many schools have already stopped arrangements for vans to sell to pupils,” he said. “They are wiping us out.”

There are about 5,000 ice-cream vans in Britain. In times gone by they would have parked at the side of most roads; but times have changed. The amendment would grant local authorities the power to ban ice-cream vans from parking near schools.

One dietitian told The Times that a ban on ice-cream vans near schools would be a draconian policy that may drive children to buy even less healthy foods at nearby shops.

Catherine Collins, the chief dietitian at St George’s Hospital, Tooting, south London, said: “This is the kind of blanket ban that gives the health lobby a bad name. A healthy diet can factor in a sugary treat such as an ice-cream. It is the frequency of that treat that is an issue. Most choices from an ice-cream van would provide fewer calories and fat compared to a free choice from a newsagent.”

Horse-drawn vans selling flavoured ices were first seen on cobbled streets in the 19th century. Motorised vans followed in the 1950s, selling hard, scooped or soft ice-cream.

By the 1980s the business had become so lucrative that gangs fought over the right to sell to certain streets. In 1984 a row between Glasgow-based gangs led to the murder of six members of the Doyle family, who had run the Marchetti ice-cream company. The sector has since declined because of the availability of ice-creams from shops and garages. The few vendors left said last week they would be out of business if the amendment was passed.

John Barrowclough, whose Iced Treats van stops outside schools around Wolverhampton, said he had been forced to sell one of his two vans. because of a clampdown.

“We sell a lot of ice-creams near schools,” he said. “Of course no one wants to see fat kids, but most children have an ice-cream once a week, not every day.”

Sefer Huseyin, whose family have run Five Star Catering ice-cream vans in Camberwell, southeast London, since the 1960s, said that his vans had been banned from schools. “Telling vendors they are not allowed near schools is the wrong message,” he said. “They have been going there for years and their livelihood is being taken away from them.”

However, the amendment is supported by some health campaigners. Chris Waterman, the executive director of the Confederation of Education and Children’s Services Managers, said ice-cream vans should be restricted. “There are millions going into healthy food in schools, yet kids are rushing to spend their money on food from mobile vans,” he said.

“The ice-cream van industry may be saying it is in meltdown but for the sake of our children’s health and safety we should keep the icons at Bournemouth and Blackpool but stop them driving around schools.”



TREAT OR HEALTH HAZARD?


A large single ice cream cone contains about 139 calories and 6g of fat. A chocolate Flake adds about 100 calories and another 6g of fat

Many ice-creams and iced lollies in wrappings contain between 40-100 calories. A Mars Bar contains nearly 300 calories

A serving of rich vanilla ice cream will typically contain 90ml milk, 90ml double cream or whipping cream, a vanilla pod, an egg yolk and 25g of caster sugar

Some soft ice cream sold on the streets can contain saturated vegetable fat, sugar, milk powder, artificial flavourings and additives including E407 and E122.

Toppings are usually a mix of glucose syrup, additives, synthetic flavourings, artificial sweeteners and preservatives

Depending on whom you believe, “99s” were first made by Cadbury’s in the 1930s as a tribute to the King of Italy’s bodyguard, traditionally composed of 99 troops; or a tribute by Italian café owners to Il Ragazzi del 99, a band of soldiers who fought in the Battle of the Piave River in the First World War; or named after the address of the Edinburgh-based Arcari ice-cream dynasty at 99 Portobello High Street

The two most popular ice cream van jingles today are O Solo Mio by Eduardo Di Capua — popularly known as the Cornetto theme — and Greensleeves



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To: Maurice Winn who wrote (7303)5/16/2006 10:21:58 PM
From: Jon Koplik   of 9417
 
Reuters piece on "deep vein thrombosis" (DVT) ..............................

May 16, 2006

Economy class syndrome not due to pressure: study

By Michael Conlon

CHICAGO (Reuters) - Reduced air pressure and oxygen levels do not appear to promote the formation of deadly blood clots during long commercial flights, an ailment sometimes called "economy class syndrome," a report said on Tuesday.

The findings seem to bolster the widely held belief that clots develop in otherwise healthy people mainly because they are sitting in cramped quarters that slow blood flow, especially in the legs, not because of cabin environment.

Travelers have been advised for several years to try to exercise their leg and calf muscles or walk around the cabin to prevent the development of clots that can travel to the lungs, brain or heart.

The same problem can occur during long car or train trips.

Researchers at England's University of Leicester said they ruled out cabin pressure and oxygen changes as contributors to the problem by testing 73 healthy volunteers.

They were placed in seats for eight hours in a chamber where the air pressure and oxygen levels mimicked those experienced during commercial air travel. They were allowed to stand up and move about for five minutes every hour.

The same group was retested at ground-level pressure and oxygen levels. Blood was drawn before and after each of the tests.

The researchers said they found no significant difference between the two tests on clot formation, on the breakdown of small, naturally occurring clots, in the activation of platelets -- cells in the blood that clump together when stimulated to promote clot formation -- or in the action of endothelial cells that line the interior surface of blood vessels.

In a typical commercial flight, the cabin pressure is equivalent to that found at 5,000 to 7,000 feet (1,500 to 2,100 metres) resulting in oxygen saturation that is about 7 percent below normal, the study said.

The problem has been dubbed "economy-class syndrome." But victims have been reported throughout cabin classes over the years, the American Heart Association says.

The association advises air travelers to drink extra water, walk if possible during the flight and avoid alcohol.

The study, published in this week's Journal of the American Medical Association, was funded by the European Commission and the UK Department of Health.

© Reuters 2006. All rights reserved.

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To: carranza2 who wrote (7477)5/19/2006 12:15:20 AM
From: Jon Koplik   of 9417
 
Telegraph (negative) piece on Heather Mills McCartney ...............................................

How Heather got our goat

(Filed: 19/05/2006) [meaning May 19, 2006]

It's Lady Mills McCartney's relentless attention-seeking - even in charity work - that so rankles, says Lesley Thomas

Triumph over a desperate childhood and disability, tireless charity work, good looks and marriage to a national icon - it should have been so easy for us to love her. But there is something about Heather Mills McCartney that has always irked.
Heather Mills McCartney

Even before she was accused of being a fantasist who had rewritten large parts of her history, before it was reported that she forced Paul McCartney to stop wearing the wedding ring of his late, beloved wife of 29 years Linda, we just couldn't warm to her.

Whatever the X factor is, Heather has the opposite. Whatever she does, we are suspicious of the motive, even if it is helping to save baby seals.

We all are sensitive to the misery of divorce and when children are involved - in this case, two-year-old Beatrice - it can only be heartbreaking. Yet why is it there is not even the faintest amount of pity for this newly single mother whose marriage has failed after just four years? Instead, there is a resounding cry of "Paul, we told you so!"

To be fair to Heather, we were always going to treat her with suspicion. She was a pretty young woman who, after a whirlwind romance, married a sixty-something with £800 million in his wallet. Just like Mrs Merton, Caroline Aherne's spoof chat-show character, who once asked magician's wife Debbie McGee, "So, what attracted you to the millionaire Paul Daniels?", we saw only pound signs in Heather's eyes.

Speculation and calculation about just how much the divorce of the century will net the model-turned-charity campaigner are rife. Could she get half of the massive McCartney fortune? Or will it be just £1 million for every week of marriage. Might she walk away with a mere £50 million no-strings quickie settlement?

Although she no doubt enjoys the good life, money is not what Heather craves. Lady Mills McCartney, as Paul himself said yesterday, is no gold-digger. What Heather digs is attention. She is blatant about it and that is what rankles.

Compare Heather's charity work with that of Linda McCartney. Linda campaigned for animal rights her entire adult life without attaching any glitz to her efforts. The second Mrs McCartney, who finds it easy to be passionate about everything from land-mines to mistreated dogs and the evils of dairy products, seems to have adopted a relentless "look at me" approach to her charitable work that is uncomfortable to watch.

All Heather's acts of altruism seem to be more about Heather than anything else. On her official website, ostensibly a platform for her campaigns, there are gushing testimonials from friends and associates about what an incredible person Heather really is.

"The public and particularly the press have very little idea of the amount of good work that Heather has done," says one. "The people who speak unkindly about Heather have all to some degree an ulterior motive, whether it stems from an imagined childhood wrong to wanting to sell a story to newspapers."

It is curious that this contributor, along with the majority on the website, chooses not to give his or her name.

Still, if you have no interest in Heather's personality, there are dozens of her favourite photographs of herself on the site. Here she is arching her back in a slinky golden goddess dress; there she is, looking ravishing in a strapless ball-gown. Then there is a more wholesome section, including Heather cuddling a dog or riding a bike (glamorously, with no helmet, mind). My favourite is among the feisty-campaigner selection, with Heather showing off perfect biceps in a red sleeveless "No more land-mines" T-shirt with co-ordinating scarlet lipstick and an expensive blow-dry.

Then there is a black-and-white one of her resting her chin on her hands. Remind you of someone? It is just like the Patrick Demarchelier picture taken for Vogue of Diana, Princess of Wales. This, it has to be said, is another reason she gets the public goat. From Madonna to Victoria Beckham, many self-obsessed famous women believe they have a lot in common with Diana, but Heather's Diana-mimicry outdoes them all.

The campaign to ban land-mines was pretty obscure until Diana drew attention to it. Who can forget those iconic pictures of the princess with children who had lost limbs? And who better to take her place? This, after all, was the woman who, after losing her leg in an accident, called tabloid editors from her hospital bed to sell her story about her ruined modelling career. (Incidentally, looking at her 1980s modelling portfolio, she was definitely more page three than catwalk.)

In some ways, though, I admire Heather's chutzpah. She ran away from her home in Tyne and Wear at the age of 13 to join a funfair, there was a stint at topless modelling, work (allegedly) as an escort, a couple of jilted lovers, ectopic pregnancies, awful periods of abuse, homelessness and destitution and, of course, the horror of losing a limb. But, at some point, she crossed the line between plucky and downright brazen.

Marriage to one of the most-renowned songwriters of the 20th century brought her the best kind of attention there is: a place on the A list. She mingled with statesmen and royalty, and went global. Heather's face has appeared everywhere from Vanity Fair magazine to CNN and she loved it. She loved it so much that, apparently, she began to resent the fact that her husband still got more attention than she did.

She seemed almost proud of her claim that she didn't know many Beatles hits and refused to tour with Paul in America last year. Naturally, this didn't endear her to the millions of Beatles fans around the world.

Like the rest of us, they had tried at first to be happy for Paul. He had had a miserable time after Linda died and was lonely and, although his young wife had been branded "a fruitcake" by some of those who knew her, at least he was having fun.

But it wasn't long before he started to look a bit of an old fool, mesmerised by what have been described in one Vanity Fair profile as Heather's "erotic wiles". Her sartorial makeover of Paul, which involved dyeing his hair (badly) and styling him in the manner of a children's Gap window display, didn't help either of their public images.

According to his friends, it was her criticism and nagging that pushed him over the edge - a paradoxical accusation for a woman who, in her new self-help book, Life Balance, to be published next week, gives us her tips for "spiritual, physical and emotional" happiness.

Although it is hardly unusual for children to be enthusiastic about a stepmother, the silence from Paul McCartney's three children from his first marriage has been deafening. Fashion designer Stella, in particular, has done little to hide her disapproval of Heather. At the Live8 concert last year, she very publicly moved away from Heather, not wanting to talk to her father in his wife's presence and also ensuring there were no happy-family photo opportunities.

Few, it seems, have a good word to say for her. Geoff Baker, Paul McCartney's long-standing press officer, was dismissed last year, reportedly at Heather's instigation after falling out with her. At the time, Baker would say nothing on the subject, but his next move spoke volumes. He took a job as an editor of a golfing magazine and chose for the cover of his first issue a nude Heather McCartney lookalike with a golf ball resting on her cleavage.

It is possible that HM - another of her monikers - didn't mind a bit. After all, a cover is a cover.

© Copyright of Telegraph Group Limited 2006.

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To: Maurice Winn who wrote (7476)5/19/2006 2:14:00 AM
From: 49thMIMOMander   of 9417
 
Maybe he must figure out a plan, any plan, for the be-multi-trillion be-deficit be-Bushed-Boy??

Silly Columbian students??

Since yesterday the north koreans and the man behind the moon are faking dollar bills, again.. says CNN and CBS..

Why not outsource them all to China, with some negative capital income gain taxes??
(it seems Cuba will anyway soon start drilling for oil in FLorida?? says the US house)

They too should be occupied, says both the regime and the senate.

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To: Maurice Winn who wrote (7476)5/19/2006 2:50:34 AM
From: 49thMIMOMander   of 9417
 
OK, they had a point with those Lips, but that was Bush-Daddy who moved them.

svt.se 

Additionally one should take dictation..

Smart and not just silly swedes.. already then..before it got really medieval..

Note the excellent use of LPC analyzing and synchronizing vocoders, same as the one in GSM, not the one patented by QCOM. (but the synthesis is crappy, a problem of SVT.AB)

However, the smart and silly swedes also has a solution for the dollar.

svt.se 

(the history of vibration and dildos, ups and downs, swedish patent)

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To: Maurice Winn who wrote (7476)5/19/2006 3:19:55 AM
From: 49thMIMOMander   of 9417
 
euro-land is not that bebothered by the bebushed bedollar berate befaked problems.. it is up-up and away again..

svt.se 

Something for those clodumbia rate students??

Btw, Rep. Don Young, R-Alaska (transp and Infrast. Comm. chairperson) thinks bUSh should drill for oil on Pluto.. (ok, maybe Pluto-Bay, something like that)

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To: carranza2 who wrote (7477)5/21/2006 12:12:30 AM
From: Jon Koplik   of 9417
 
Maybe price of cement can fall now (?) / China completes Three Gorges Dam wall ............................

May 20, 2006

China completes Three Gorges Dam wall

By Jason Subler

BEIJING (Reuters) - China completed construction on Saturday of the giant Three Gorges Dam wall, a milestone in the world's largest hydroelectricity project which is also designed to tame the flood-prone Yangtze river.

Chinese nationalist leader Sun Yat-sen proposed the project as early as 1918, and Mao Zedong once waxed poetic on his hopes for a "great wall of stone" from which "a smooth lake" would arise among the gorges.

Workers and officials marked the completion of the massive wall on Saturday, in a ceremony broadcast live on state television.

A brass band played and confetti rained over the site after workers poured the last batch of concrete.

In contrast to the launch of work on the dam in 1997, attended by both then-President Jiang Zemin and then-Premier Li Peng, no top officials attended Saturday's event.

State media praised the development company's decision to forego a plan to spend upwards of 1 million yuan (67,000 pounds) on the ceremony and opt instead for a simpler one that cost only hundreds of yuan, saying the move emphasised that the wall's construction marked only a partial completion of the project.

Officials stressed that although construction of the dam's main span was now complete, much of the work remained.

"Although the dam is now complete, we still have a long way to go and cannot become self-satisfied or relax our efforts in the least," Li Yongan, general manager of the Three Gorges Project Development, said at the ceremony.

"We need to continue to put quality and safety first," Li said.

FIRST FOREIGN HELP

To that end, the company has asked two German engineering firms to help design a hoist mechanism to lift ships, the Xinhua news agency reported.

"The introduction of foreign cooperation in the project designing is aimed at safety guarantee," Xinhua cited Li as saying.

Xinhua said this would be the first part of the project's design for which China has enlisted foreign help, marking a departure from relying only on homegrown designs.

The official China Daily in an editorial called for people to remember the more than 100 people who died during the dam's construction, as well as the 1.3 million people facing relocation to make way for the dam's reservoir.

"The best possible way to repay such a debt of gratitude is to make sure the highest safety and quality standards are observed up till the very end of the entire building process," the editorial said.

One of the dam's main functions is to tame the Yangtze's floods, which have drowned countless thousands over the centuries.

But the $25 billion project, which has become a symbol of China's rising power and technological prowess, has been mired in controversy for its environmental impact and its effect on so many people from its conception.

Even when the parliament approved the project in 1992, nearly half of its members voted against the measure -- a rare show of opposition in the one-party state.

Many environmentalists say the dam's reservoir, which will reach a depth of 156 metres (515 feet) by October, will become a cesspool of sewage and industrial pollutants and that the creation of such a huge artificial body of water could have unforeseen ecological effects.

Critics also decry the social impact of forcing so many people to leave their homes, as well as corruption they say has kept some of the 25 billion yuan in funds set aside for resettlement from getting to its intended recipients.

The entire project is set to be completed in 2009, when the reservoir will reach its full level and its 26 turbines will all come online, bringing its total power generating capacity to 18 gigawatts.

The dam is 185 metres (607 ft) tall and 2,309 m (7,575 ft) long. It and its attached locks have consumed 27 million cubic metres (35 million cubic yards) of concrete.

© Reuters 2006. All rights reserved.

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