From: Corporate Report Minnesota

Date: April 1991

Headline: The Million-Dollar Sight Gag

Subline: Joel Hodgson and partner Jim Mallon have parlayed a comic bit using robots, B movies, and smart-alecky commentary into a lucrative cable TV deal

Photo(s): Hodgson (front) and Mallon: "*Okay*, Mr. White Male Reality!" (Photograph by Bill Miller.) [Gypsy, Crow and Servo surround Joel and Jim on the Satellite of Love, bathed in a light purple glow.]

Author: Brauer, David

Page(s): 40-43, 45-46

Note: Interview with Hodgson and Mallon on the business side of Best Brains.

This is an unauthorized reprint.


PERHAPS THE ONLY stand-up comic never to do a relationship or drinking joke, Joel Hodgson gained an enthusiastic local following in the late 1980s with a wild array of home-made props and sight gags, including a turntable base for his fishbowl. "I use it when I want to give my goldfish a rest," he quipped.

Another bit featured a book of replies to dumb bumper stickers. Hodgson's response to the ubiquitous "I (heart) my dog" was "I (club) my seal."

There were also flame-thrower boutonnieres and easy-to-make Halloween costumes (cut out the side of a milk carton, stick your face through, and go as a missing child). Hodgson made a pretty good living with his creations, but soon grew tired of crisscrossing the country in one-week stands.

So he returned to his St. Paul studio and built a whole new array of toys. He created a robot puppet family out of wire hangers, cut-up pingpong balls, and gum-ball machines. Then he secured a bunch of low-budget Japanese horror movies from a UHF station in northeast Minneapolis and convinced his friend, the station's production manager, to let him go on air with his mechanical pals and rip the bad movies to shreds in a dead-end time-slot opposite "60 Minutes". It was 1988, and Hodgson got $100 for each episode of "Mystery Science Theater 3000".

Don't laugh. This year, his company will gross more than $1 million.

In less than three years, Hodgson's show has risen from the low-budget confines of local independent television to become a prize in a hard-fought comedy-channel war waged by the nation's two largest cable television programmers, Time Warner and Viacom International. Time Warner's Comedy Channel has an option for two more years of "Mystery Science Theater" to be produced by Hodgson's Eden Prairie company, Best Brains Productions--escalator clauses built in. Not only that, but a major financial backer is close to signing on for a "Mystery Science" feature film.

Hodgson's premise is stunningly simple--if it's fun to ridicule bad movies, it will be even funnier when top-notch comedy writers do it. But the show succeeds primarily because of, as they saw on the coasts, "the concept." Hodgson's character, a well-meaning janitor at the Gizmonics Institute, has been sent into outer space by evil scientists who want to study the effects of bad movies on humans. Too pass the time and keep his sanity, Hodgson uses spare parts to create robots, and together they lampoon the trash they are forced to watch. Viewers see them superimposed in the lower corner of the screen, as if they were in a movie house. "It's easy to be cynical and just rip up movies," Hodgson says. "But we get some sympathy because we're *trapped* up there."

Hodgson and his robot buddies (puppet operated by writer/performers Trace Beaulieu and Kevin Murphy) are made to watch movies like the incomparably bad "Rocket Ship X-M". In that forgettable 1950s space epic, a fuzzy-cheeked Lloyd Bridges, an even younger Hugh O'Brien, an older actor resembling Mr. Whipple, and a long-since forgotten actress with an improbable Eastern European accent starred as astro-scientists who lose consciousness on their way to the moon and somehow land smack dab in the middle of Mars. Typical breathless dialogue goes something like this:

Whipple: "My god, we're millions of miles off-course!"

Long-since forgotten East European actress: "Doctor, zat cannot be, I'll re-check ze calculations."

Whipple: "There's no need! I've re-checked them myself!"

Hodgson: "*Okay*, Mr. White Male Reality!"

As important as his character is to the project, Hodgson realized that creativity alone would not deliver the show on-time and on-budget. By entering into a partnership with Jim Mallon, the UHF production manager to whom he originally pitched the show, Hodgson assured that the business side got its due.

"It's a rare partnership. We work well together because we have a little bit of both sides in us," Hodgson says. "I wasn't just the creative guy, I was the guy who pitched it to the Comedy Channel. But Jim isn't just a business guy who doesn't understand the creative process, either."

Indeed, Mallon, Best Brains' president and primary business manager, knows something about sight gags, too. Folks around the University of Wisconsin in Madison fondly remember him as a founding member of the Pail and Shovel Party,which rode to power in student government in 1978 after promising to bring the Statue of Liberty to Badgerland and to fill Madison's Bascom Hill with pink flamingos.

"Everybody thought it was a joke campaign," says Mallon. "But we won, and we did what we promised."

On his office walls are two posters attesting to the fact: One features a fairly convincing, large-scale replica of Liberty's crowned head and torch-bearing arm protruding from the ice of Madison's Lake Mendota, a la the final scene of "Planet of the Apes". The other features a lovely green hill topped by a Romanesque building that somehow has been overrun with lithe, pink birds.

"It was the height of the "Animal House" era," Mallon says. "We did things like throwing the world's largest toga party, or a Halloween bash that filled the Capitol Mall. Now those may sound like goofy pranks, but we had 20,000 people at the toga party and maybe 50,000 on the Mall. It takes quite an organizational effort to pull them off. We had lots of stories done on us--"NBC News", "Washington Post", you name it--but not one saw behind the flippant mask to ask how we'd done it."

Similarly, visitors to the Best Brains production facility in Eden Prairie's Tech 5 Center may be blinded to the well-run business within, noticing only the large stuffed iguana on the receptionist's desk and the twin lime-green 1950s-era hair dryers across the way.

"They're diligent," John Newton, executive vice president of the Comedy Channel, says of Hodgson and Mallon. "They under-promise and over-deliver, rather than the classic show biz reverse."

HODGSON CAME UP WITH the idea for "Mystery Science" in 1980, his senior year in college. "I'd written this strange show that was kind of about a guy after the apocalypse, all by himself, who was trying to communicate with people on TV shows that were left over. He was kind of on his own, and there were robots in it, and mutated creatures of the apocalypse." Laughing, Hodgson adds that "the post-apocalypse thing had really run its course"--after a decade in film that opened with "Planet of the Apes" and closed with "The RoadWarrior".

He dropped the idea when his career in stand-up comedy began to take off, but it was resurrected in 1985--in appropriately mutated form--when Showtime cable executive Stu Smiley asked Hodgson to write his own show, a very short-lived effort.

"I came up with this concept of a combination between a talk show and the "Prisoner"," Hodgson says, referring to the classic '60s television series about a former intelligence operative imprisoned on an unknown island. On his show, he says, "the host would be in a controlled environment, and guests would come in and leave through a portal. It was too weird, a 15-minute variety show."

At the same time, Hodgson's burgeoning stand-up act prompted him to make the inevitable career move to Los Angeles. But he soon became disillusioned by the travel and incestuousness of big-time comedy, and moved back to the Twin Cities. "I thought I was going to be a carpenter," he says with a shrug.

Hodgson retired to a workspace in Minneapolis's Colonial Warehouse, which happened to be right next to the film production studio of Jim Mallon. Mallon, who had left Madison after working in Wisconsin public television, was making a low-budget feature film called "Muskie Madness" (later given the more lurid title of "Blood Hook" by its distributors). When Hodgson heard that Mallon was working next door, he made sure a meeting took place. Mallon's stunts at the University of Wisconsin, it seems, had inspired a certain small-town Wisconsin boy to run for high school president. "I won, too," Hodgson says, smiling.

The two hit it off and discussed working together, but didn't have an opportunity until a year later, when Mallon was hired as production manager atMinneapolis independent station KTMA-Channel 23.

"I'd met people at KING-TV in Seattle who said I should tap into the local comedy scene because they were all angling to get on TV," Mallon says. "That's when I remembered Joel."

Mallon's bosses agreed that the station needed some good press to set it apart from all of the other cable and independent alternatives, so they let him put Hodgson in the 6 p.m. Sunday slot. Hodgson says he quickly realized that substituting old movies for the talk in his aborted Showtime concept would fill the two-hour slot nicely. But even after "Mystery Science Theater" came together, Mallon and Hodgson faced an uphill battle.

Normally, UHF stations buy old reruns as cheaply as possible and stick them in the program schedule. "It costs $500 to show an average film," says Mallon. "But making "Mystery Science" costs between $2,000 and $3,000 per episode. That's six times more, and that's what you're up against when you're trying tomake your own show."

Cost restrictions forced "Mystery Science" to adopt the low-budget, cobbled-together look that remains one of its chief charms. The crew could afford only the cheapest, worst movies around, including one with a bargain-basement Godzilla named Gamera. As for the rest of the set, Hodgson says, "It wouldn'tbe right to look much better than our movies."

Following the show's November 1988 premiere, the station got what it wanted--a ton of free publicity. The "Star Tribune", "Pioneer Press", "Twin Cities Reader" and "Skyway News" all did lengthy features on the otherwise obscure station.

"Mystery Science"'s ceaseless sarcasm, and perhaps it's jerry-rigged style, connected with viewers. Over 1,500 pieces of fan mail poured into the station during the show's brief nine-month run.

But Mallon remained frustrated. "I learned at KTMA what it was like to work for an undercapitalized station [KTMA eventually filed Chapter 11]. You learn how much it costs to do TV--we couldn't have done it without their $300,000 production set-up, yet we knew we had to get out. They had no money for films, salaries, anything."

While still working at KTMA, Mallon and Hodgson began approaching the networks with episodes that had already aired. Then, in October 1989, they signed a deal with the Comedy Channel. Hodgson wasn't entirely surprised to be offered the five-year agreement, because the channel's vice president in charge of original programming was none other than Stu Smiley, who had weathered Hodgson's talk show idea at Showtime.

"Stu remembered me from that weird idea I pitched him," Hodgson says. "It didn't hurt that I'd also done [David] Letterman and "Saturday Night Live" in the meantime."

"It wasn't like [Hodgson] was some guy off the street," the Comedy Channel's Newton adds. "Besides, he had something to show us."

It had always been Mallon and Hodgson's plan to use KTMA as a testing ground and then take the show national. "We didn't have to go into hock and bring something to shop around to the networks," Mallon says. "We didn't have to spend a dime until someone said yes."

Hodgson says having product in the can also turned out the be an invaluable bargaining tool. "If we wouldn't just brought them an idea, they could've changed it all around," he says. "But "Mystery Science Theater" worked and it had a track record--1,500 pieces of fan mail at Channel 23 was really convincing to them. And fortunately, the Comedy Channel was just getting started and they needed to fill 24 hours of programming a day, so I think we also got lost in the shuffle before anyone could mess with us."

Actually, both Time Warner and Viacom (which owns HA! TV) were starting up 24-hour cable comedy networks, and the competition was causing problems. Everyone agreed that cable had room for an all-laughs channel, but it definitely couldn't handle two: Cable operators wouldn't pick up either channel lest they offend an owner of one of the biggest movie-channels on the planet (Time Warner owns Home Box Office; Viacom owns Showtime, HBO's chief rival).

Finally, after Viacom filed a $2.5 billion anti-trust lawsuit against Time Warner, the exhausted combatant gave up the battle. They agreed to create and share equally in a new entity called Comedy TV, which will begin this spring, according to Newton.

After signing the initial deal with the Comedy Channel, Hodgson and Mallon set up Best Brains, for which their low-budget apprenticeship proved to be good training. Best Brains wowed the Comedy Channel by producing 13 two-hour programs for about $344,000--approximately one-third the cost of a single "Saturday Night Live" episode.

Mallon, who produces "Mystery Science", says it is cheap even compared to other locally produced programming. KTCA-Channel 2's "Newton's Apple", for example, cost more than $60,000 per half-hour episode of "Mystery Science".The virtues of such frugality were made clear when Mallon and Hodgson visited the Comedy Channel's New York headquarters. "The whole place was art-directed like a 1930s newsroom. They must've spent millions to meticulously refurbish this period furniture," says Mallon.

"Smoked glass and everything," Hodgson interjects.

"Our eyes just went wide. Here we were, back in Eden Prairie, sitting on chairs we borrowed from Kevin's dad's basement," Mallon says.

Hodgson says that his time on the West Coast also helped him to realize that fiscal restraint equals freedom for a creative enterprise. "It's really hard to come up with a new concept, especially on the coasts, where they've got so much overhead to cover you can practically see the writers trembling in their boots worried about failure," he says. "When you think about big TV hits in the last few years, you've only got "Roseanne" and maybe "America's Funniest Home Videos"."

Best Brains is relatively debt-free, having used a $123,000 advance on the first season's $344,000 license fee to pay for the space they sublet from Beaulieu's brother's company, a few assemble-them-yourself Techline desks, and a single phone line. Hodgson and Mallon each own 45 percent of Best Brains; Trace Beaulieu and Kevin Murphy split the remaining 10 percent.

With cash flow tight for the first season, Best Brains had to be especially conscientious in delivering its product on-time. Hodgson says Best Brains usually gets one-third of its annual license fee up front; the remaining two-thirds is doled out per episode on an eight-day schedule--half when a show's script is delivered, the other half when the finished product arrives at Comedy Channel headquarters in New York four days later. The result, Hodgson jokes, is that the company "Operates on a just-in-time production schedule."

"Mystery Science" was a cable hit almost from the beginning. As at KTMA, fan mail began to pour in to the Comedy Channel. Hip and irreverent, "Mystery Science" has generated more fan mail than any other show seen on the Comedy Channel, according to Newton.

"Measuring success on our channel is complicated," he says. "We operate on the basis of subscribers, not individual show ratings. But I can tell you, it's gotten more attention than anything on our channel, or the competition."

The show's success even lured HBO Chairman Michael Fuchs to fly-over land to schmooze the brains behind Best Brains. "He said we were exactly what Home Box Office was all about," recalls Mallon, "G-rated but with an edge."

DESPITE THE SUCCESS, all was not well as Best Brains began cranking up the production. The company was able to minimize long-term debt, but its start-up phase exacted a painful toll in other ways.

"We worked seven days a week, 12 hours a day to build sets, design robots, write the shows in the beginning," says Hodgson. "We went six weeks at the start without a paycheck."

The economic tensions were to be expected--many of the crew had suffered through the catch-as-catch-can world of stand-up comedy--but Mallon says the creative tensions were worse. The number of quips per show, for example, has been raised from 150 to 750, says Hodgson.

"For all our success, we did create this business backwards," Mallon says. "Most companies set up their structure and then sell the product; we did it the other way around. It led to some horrible confusion, because there weren't any rules. Everyone was working their butts off, but somebody would leave to go to do their laundry or something perfectly understandable, and the rest of us would look at him like it was a betrayal."

After a while, the uncertainties of the company's pecking order also erupted.

And Mallon and Hodgson, though friends, realized they did not fully trust each other--each thought he was shouldering more of the burden.

"It's weird, it's like a [romantic] relationship," says Hodgson. "We'd clearly gotten to an impasse--we were just not getting anywhere. I knew that we were kind of dysfunctional because every time we had a meeting it would be this big deal. We'd often discuss everything in front of everybody, and it would always end in [Mallon and I] facing off."

In a relationship filled with unspoken frustrations, Hodgson suggested a logical solution--therapy. Specifically, business therapy.

With the help of a non-profit consulting firm called Minneapolis Mediation Program, Hodgson and Mallon talked through their problems and received counseling on basic business rules. Says Hodgson, "Jim had never been to therapy before, so he was kind of nervous about it, but I had had a little experience in talking things out in a therapeutic environment, so I knew it would be okay."

Today, Mallon is an enthusiastic booster. "I suppose any MBA knew all this stuff, but it was a real eye-opener to me. I mean, when I was making a movie, we worked a crew all-out for 35 days, but here we were working at that pace for a year-and-a-half. We had to add structure. I believe creativity excels within structure." They wrote job descriptions, he says, and instituted a 9-to-5 work schedule to prevent the kind of burnout that was plaguing Best Brains.

"There were other simple things," Mallon adds. "Joel and I have lunch together alone once a week, which, believe it or not, was something we'd neverdone before even though we were partners. We now have regular staff meetings.

We have a policy about how creative disputes are handled on-set, a policy on personal use of company resources. It really eased the tension."

Hodgson says that in addition to establishing rules, they have been able to re-establish trust. "Ultimately, our notions of where the company should go were exactly the same," he says. The mediation process helped him, Hodgson says, "to see that we were both sacrificing to help the company."

Best Brains is now poised to take advantage of its growth, Mallon says. As a condition of the merger, the Comedy Channel has agreed to provide the new Comedy TV network with five originally produced programs, and "Mystery Science Theater 3000" is one of them. Sources say Time Warner originally hoped to sign Best Brains to a contract with HBO, rather than share its program with Viacom on the Comedy TV channel, but it soon dropped the idea because it was counter to the spirit of the agreed-upon merger.

Best Brains will deliver 24 shows in the coming production schedule, earning approximately $50,000 per show in license fees, almost double the fees paid for the original season and "slightly higher than the escalator clause in our contract calls for," notes a pleased Mallon.

That adds up to revenues of more than $1 million. After paying expenses and salaries for Best Brains' 11 full-time employees last year, the company had enough to buy a $150,000 editing bay that will reduce the reliance on outside companies to help with post-production work on the show.

Hodgson adds that the financial reward to the company should be even greater in future years. "Most television is made by deficit financing," he says. "Making shows is so expensive that big producers like Aaron Spelling spend a lot of money up front and gamble on recouping it when those shows go into syndication. That's why Hollywood production companies need to be so big--to be able to afford the financing.

"But we're paying for our show now with sweat equity," Hodgson says. "Instead of buying a chair for $40, we'll make it ourselves for $15. That way, when we go into syndication, [the revenue] will be all profit."

The Comedy Channel has an option for two more seasons of "Mystery Science Theater", and Best Brains is planning for rapid expansion. Not only has the company added a full-time business manager, but it also has invested in a sofa, loveseat, and chair--brand-new and made of green leather.

Could this mean they'll soon be on the road to high overhead, paved in leather? "Believe me, it's something I've thought of," says Mallon. "But the truth is, we've earned those couches. We didn't buy them the first season when we couldn't afford them. But now that we can, there's no reason why we shouldn't get them. That's why we've just now added a business manager, so I can concentrate on new projects and not try to figure out how to fill out a tax form. It's time all of us took off some of our hats and concentrated on the thing we know best."

Now that the cable company war is over, Best Brains could really be on the verge of the big time. When the Comedy TV station premieres this spring, "Mystery Science Theater"'s audience will effectively double, and most Twin Citians will be able to get it for the first time since KTMA's demise. As additional cable systems come in from the sidelines, "Mystery Science" could become as big a part of the $20 billion cable landscape as your average MTV video. If cable can turn Milli Vanilli into a hit, just think what it could do for guys who *admit* they overdub.

Mallon and Hodgson hope that their skyrocketing audience base will help launcha "Mystery Science" feature film (in which HBO is reportedly very interested), and more new cable projects. Sometime this summer, Mallon adds, Best Brains will probably add its first creative-side employee who will focus solely on new, non-"Mystery Science" projects.

"If you talk to me a year from now, I hope we have another show in production," he says. "We want to give people like Trace Beaulieu a chance to do their own projects. Now we've got the experience and the track record to make it happen."

Mallon says the company has no plans to leave Eden Prairie. "When we first started doing "Mystery Science Theater", the Comedy Channel insisted that we move to New York where they could keep an eye on us," he says. "That was when we saw the smoked glass and the '30s furniture--it was almost a deal-breaker.

We told them we felt more comfortable back home, and they let us prove we could still put out a good show from here.

"We were just out in Los Angeles," Mallon adds, "and you know, everybody told us their dream was to get big enough in the business so they can move out of town and still have the clout to sell shows. We have, in essence, reversed the whole process. We get to have a real life in the Twin Cities and do what we want to do right from the start."