A throbbing techno-beat soundtrack fills the small dark room, big enough only for six oversized yellow leather chairs and a large-screen TV. It pulses with images of mayhem: cars careening, flying fists, explosions, Matrix-style martial arts moves, and a futuristic robot wreaking havoc on sleek young Chinese and American actors.

Wearing a Hawaiian shirt and a vacation tan, 50-year-old Stephen Jarchow watches intently as the six-minute trailer for his fall movie Gen-Y Cops pounds to a close. As yet with no dialogue, the plot remains baffling, but no matter. The $6 million budget, relatively puny when it comes to action films, has gone where it counts: filling every frame with fast and furious movement. But what Jarchow also sees on the screen is the amount of work still needed before the film’s release.

We’re sitting in a warren of small offices at Regent Entertainment, which dominates the sixth floor of a building Jarchow owns at Preston Road and Northwest Highway. Regent Entertainment is an independent producer and distributor of low-budget movies-very low-budget movies. Most cost $1.5 to $3 million to produce, including the stars’ salaries.

Many indie producers make a movie, take it to a film festival, and pray a studio with domestic distribution picks it up to show in U.S. theaters, where success will be measured in opening weekend box office returns. Few of these movies-The Blair Witch Project notwithstanding-ever get distribution deals. Jarchow learned this unpleasant truth when one of his first films, Gods and Monsters, aired at Sundance Film Festival in Park City, Utah, to critical acclaim and got nothing but snubs from distributors.

Regent, unlike the Hollywood studios, makes American movies primarily for export. Its markets are foreign TV networks and video outlets. From Europe to Africa to Asia, the world loves American movies, even those few Americans ever see, such as Storm Chasers and Britannic, Regent’s knock-offs of Twister and Titanic, featuring actresses such as Kelly McGillis and Jacqueline Bisset, once-hot stars whose careers have cooled.

"We are a conservative producer of affordable TV, film, and video product to the world," Jarchow says, sounding like a mission statement. But then he adds with a slight smile, "Occasionally we make a good movie." Regent now produces 12 to 15 movies a year and acquires another six to eight made by independents. While it’s the largest independent producer of films for the Fox Family Channel, 70 percent of its revenue comes from overseas.

Also unique: Regent operates two movie theaters, the one-screen Regent Showcase in LA and the four-screen Regent Highland Park in Jarchow’s own neighborhood, where it can guarantee a film an American theatrical release, no matter how tiny and no matter how long, which ups a movie’s value in both domestic and foreign markets.

Jarchow has brought his expertise as a financier, honed over 20 years as a lawyer and real estate investor, to finding overseas capital and holding down production costs. But he also gets involved with his Santa Monica-based partners in everything from choosing scripts to hiring (and firing) the talent. He’s even penned a story for a sci-fi film called Nostradamus.

Gen-Y Cops is Regent’s first film with Media Asia, a production company that’s owned in part by actor Jackie Chan, star of Shanghai Noon and Rush Hour I and II, and actress Michelle Yeoh, star of Crouching Tiger, Hidden Dragon. Media Asia put up 60 percent of the budget for the rights to the Asian and African markets; Regent put up 40 percent for rights in the United States, Europe, Canada, and South America.

Not surprisingly, considering their salaries, neither star appears in Gen-Y Cops. The American star is Paul Rudd (Cider House Rules). Most of the young Hong Kong actors are inexperienced; before the film is released, their dialogue will have to be re-dubbed. Now two-and-a-half hours long, the movie will be cut to 90 minutes and only 10 percent Chinese dialogue before its U.S. release. But with America’s burgeoning interest in Asian films, Gen-Y Cops could be a moneymaker. The production went so well that Regent recently signed an eight-picture deal with Media Asia.

In Hollywood, profitability is rare. Return on invested capital in recent years hovers around 5 percent. An investor would do better with commercial real estate.

But would it be as much fun?

On this July afternoon, Jarchow is positively bubbling. The day before he had flown to Denver to negotiate what he calls an "important" strategic alliance with a major cable provider he declines to name. If the deal is finalized this fall, little Regent will create specialized TV channels for cable and Direct TV and more than triple its annual production of films. The deal is a perfect illustration of Jarchow’s focus on his core competency and calculated (but heady) risk.

The story of how a savvy, bottom-line Dallas investor like Jarchow ended up running a small but bona fide movie studio is a lesson on tapping into the inner boy, re-connecting with childhood dreams. It’s also a lesson in how an outsider unimpressed by glamour can find a niche market in the entertainment business with potentially big pay-offs.

The Odd Couple

They met in 1995 at the Barney Greengrass restaurant on Wilshire Boulevard. Jarchow was in LA looking for investment opportunities. Producer Paul Colichman was looking to start up a new production company and wanted a partner interested in handling the day-to-day business. But the money people Colichman had met were not interested in active management.

"Most of those people aren’t looking to do any work at all," Colichman says. "They are looking to meet movie stars and to get dates with young girls." Jarchow seemed more interested in the intricacies of financing a film than having lunch with a starlet.

The two men couldn’t have been more different. Quick-minded and sarcastic, Colichman is steeped in the movie business. He grew up in Brentwood (home of O.J. and Monica), started working as an usher in a movie theater at age 12, and by age 16 was booking theaters. By the mid-’90s, Colichman was producing moderately priced films such as Tom & Viv, starring Willem Dafoe and Miranda Richardson, and One False Move, with Bill Paxton and Billy Bob Thornton.

Quiet and bookish, Jarchow was raised in Wisconsin, earned a law degree and his CPA, and has published five books on real estate syndication and taxation. In 1979, Jarchow moved to Dallas to practice law. In 1981, he went to work for Lincoln Properties, one of the country’s largest apartment and office builders. He lived in California for a few years but returned to Dallas in 1987 to work for Bear Stearns. During the Dallas real estate depression, he made his mark by orchestrating the purchase of distressed properties, including Thanksgiving Tower and First Interstate Bank Tower.

He left Bear Stearns in 1990 to form his own investment firm. Two years later, Jarchow picked up the $12 million Studios at Las Colinas for $1.25 million as a real estate play. Only one movie was filmed there while he and partner Chris Christian owned it, Steve Martin’s Leap of Faith, and Jarchow had little to do with the day-to-day operations. But he began buying back catalogs from movie companies in distress. Jarchow also contacted SMU Law School and volunteered to teach a class on entertainment law.

"If you want to learn something, teach it," Jarchow says. "It gives you an excuse to read the cases, to learn about labor unions, the guilds."

Jarchow’s friends and ex-wife say he talked about going into the movie business in his early career as a lawyer. Jarchow says he doesn’t remember that, but he does recall seeing a James Bond double feature at age 15 and thinking, "How much did this cost? And where did they get the money?"

Jarchow sold his interest in the Studios at Las Colinas to Ross Perot Jr. in 1994 so he could concentrate on negotiating distribution for his growing film inventory. Two years later, Jarchow was finally ready to dive in. He and producer Colichman hit it off immediately. "He understood the business well," Colichman says. "It was hardly impetuous on his part. He was in it for all the right reasons."

In 1996, Jarchow and two investment partners each put up $1 million in equity and formed Regent Entertainment with the goal of financing, producing, and distributing low-budget movies in the $1 to $3 million range. Jarchow arranged a line of credit for the company and they opened an office in Westwood, with Jarchow maintaining a smaller office in Dallas.

Then lightning struck.

Gods and Monsters

At 11 p.m. on a cold night in January 1998, Jarchow sat with his daughter Boo and Colichman in a stuffy screening room at the Sundance Film Festival and watched as their eighth film, Gods and Monsters, premiered.

The story of the last days of Frankenstein director James Whale, it was a risky script to produce. The main character is a dying gay man who forms an unlikely friendship with his young, straight gardener. But both Colichman and Jarchow had loved the screenplay by Bill Condon, and the great British actor Ian McKellen had signed on to play Whale. It was too good a chance to pass up.

Regent had acquired the rights from Disney to a screenplay called Twilight of the Golds. They cast Brendan Fraser.

Colichman later sent Fraser the screenplay of Gods and Monsters. He loved the screenplay and was eager to work with McKellen, so he agreed to play the gardener at a manageable rate. British actress Lynn Redgrave signed on for $50,000.

Jarchow financed the $3.6 million budget by selling U.S. rights to Showtime for $1 million, UK rights for $500,000 to the BBC, and then getting a $1.5 million loan from Imperial Bank in LA against those two contracts. The company borrowed another $1.5 million against the rest of the rights. Still a half-million dollars short, Jarchow wrote a check on his own account.

The movie would end up being refinanced three times.

Though shot in only 24 days, the costs crept up to $4 million. More money was needed for music and a few additional scenes. Jarchow put up another $500,000. Although Regent didn’t have the clout to secure it a theatrical release, he hoped a major distributor would pick it up.

The screening at Sundance was a hit. Wonderful acting, a strong story, the audience loved it. But in the weeks that followed, nobody stepped up to the plate. Miramax, Sony Classics, Fine Line-they all passed. It was too gay, too serious, or not serious enough. "Paul was devastated," Jarchow says. "I was only vaguely disturbed. I expect nothing to go right."

After Sundance, thinking the film needed more exposure, Regent entered it into more festivals. After the New York Film Festival, rave reviews started rolling in, particularly from Janet Maslin at the New York Times, Peter Travers of Rolling Stone, and Harry Knowles of the web site Ain’t It Cool News. Lions Gate, just coming into its own as a producer and distributor of independent films, agreed to put $2 million into prints and ads. Jarchow had a tough decision: pay off Showtime to get out of the contract so the movie could be released in theaters or stay with Showtime and watch the movie disappear into the maw of cable TV.

Pondering his next move while driving aimlessly around Beverly Hills, Jarchow stopped at the Beverly Hills Hotel for a drink. "We may never make a movie this good again," he said to himself. Jarchow wrote the check for $1 million to buy out Showtime. It was a gamble on quality-and it paid off. Named best movie of the year by the National Board of Review, the film received nominations for three Academy Awards and four Golden Globes. Jarchow was in the audience when Redgrave won a Golden Globe for best supporting actress and, later, when Condon received an Oscar for best adaptation for a screenplay. "I realized my life had changed," Jarchow says of the intimate ceremony at the Golden Globes, where he met stars like Sean Connery, Michael Caine, and Gregory Peck. More than 100 critics put Gods and Monsters on their "top 10" lists, and so far it has produced more than $10 million in box office sales and on video.

"It ended up being profitable," Jarchow says. "It’ll be making money after I’m dead."

A Boy at Heart

Was Gods and Monsters a fluke?

Jarchow has now been in the business five years and produced 50 movies. Some, such as I’ll Remember April, are nice but small films. (For it, Regent cast Mark Harmon, Pat Morita, and Haley Joel Osment before his breakthrough performance in The Sixth Sense.) Others are like The Brotherhood, shot for under $1 million, a stinker of a horror movie that generated 100,000 rentals at Blockbuster. Regent has finished Brotherhood II and will do three or four in the series.

"You don’t build a business on anomalies," Jarchow says. The truth is most Hollywood movies aren’t very good. People watch them anyway. The movie you love your neighbor hates. And critics? Jarchow rolls his eyes just a bit.

Regent acquired a film called Sordid Lives, which received a thrashing from Morning News critic Jane Sumner when it was released this summer. Based on a play by Del Shores, who also directed, Sordid Lives is a gay-themed film billed as "a black comedy about white trash" starring Beau Bridges, Delta Burke, and Olivia Newton-John.

Jarchow and his daughter loved the movie. It had been running for weeks at the Regent Highland Park when I saw it on a Monday night. The theater was two-thirds full. Though rude, crude, and not particularly good, it was also very funny. The mostly gay audience laughed uproariously throughout and cheered at the end.

On that Monday, the Regent sold only 26 tickets to A.I. in multiple time slots. Booked in only one time slot, Sordid Lives sold 57 tickets. "We can’t kill it with a stake," Jarchow says.

Jarchow can now say that he’s a filmmaker, not a real estate guy making movies. "There probably aren’t six people who understand independent film production and financing better than I do," Jarchow says. "You must know international law, copyright law, who to sell to, and who is credit-worthy."

An independent also needs to have a good grasp of exchange rates. Jarchow will tap into German tax shelter funds this year to finance a handful of films. The major studios also turn to Germany for funding. But the strong dollar has slashed Regent’s overseas take-which comprise two-thirds of the $10 million the company receives from video and TV sales-by 20 percent. Last year revenues for the seven major Hollywood studios shrank almost everywhere in Europe except the British market. "It means it’s harder to recoup your investment," Jarchow says. After years of languishing, the Asian market has rebounded and is now the strongest foreign outlet for American films.

An independent must also understand how different cultures will respond to a film. Asia loves action and science fiction; Germany and France like psychological thrillers and mysteries. A movie can be a hit in one country and tank in another. Predicting is the hard part.

"The movie business is a lot like love," Jarchow says. All the pieces-script, actors, director, locations, music-have to come together. Of those elements, a good screenplay is the hardest to find.

The Regent staff, now based in Santa Monica, reads 200 scripts a month. Even though they read only scripts submitted by agents, only 10 in 200 are in the proper three-act structure. Fewer still have good characters and compelling story arcs. "Very few scripts pass the test," says Jarchow, who also reads a lot of screenplays.

Jarchow knows that no matter how good the script, he can’t predict whether it will make money. "A nice little movie will make money if it cost $500,000," he says, "but not if it cost $5 million."

Perhaps Jarchow’s mid-life career change has a lot to do with a childhood love of story. Seven or eight years ago, Jarchow began to collect the books he remembered reading as a boy. He takes me into a room at Regent that is lined with white bookshelves and hundreds of old books. Jarchow has amassed more than 1,000 titles of Frank Merriwell books, boyhood tales of adventure written by Burt Standish from 1890 through 1915. "I’ve been told by the Library of Congress that I have the most extensive collection in existence," he says proudly. He also collects Chip Hilton, Hardy Boys, Zane Gray, and other adventure series.

Yet another room holds Regent’s library of master copies of films. "We monitor which films are coming into the public domain and try to get a good master," he says. "Film companies are notoriously bad about not renewing their copyrights." Regent now has the rights to 5,000 films, from The Adventure, a 1917 Charlie Chaplin movie, to Zulu, a 1964 film starring Michael Caine. (You can see some of these movies for free at www.regententertainment.com.)

Colichman used to be surprised at Jarchow’s wide-ranging sensibilities. "Now I kind of expect it," he says. "We have similar tastes." The two men have become close friends. Jarchow has taught the industry veteran how to manage the risks of moviemaking.

"In my previous company, we pre-sold 100 percent of the risk," Colichman says. "Steve understands that if you don’t take the risk, you don’t win." And despite the high stakes, throughout the nail-biting suspense of Gods and Monsters, he never saw Jarchow get flustered.

The most difficult adjustment for the former real estate dealmaker has been working with producers, writers, and directors who are not business people. "On many levels, they don’t care if a movie is financially successful," Jarchow says. "They care about what it looks like and what people think of it. I’ve found in practice that, even if you understand that, you still get surprised by their behavior."

For example, there was the director who was shooting a Regent film on location. It was almost finished when he decided the light wasn’t quite right and that he’d have to re-shoot, even though the star had to return home and there was no money to reshoot scenes. Jarchow fired the director, brought in another to shoot the last two days, and then had to deal with the union after the first director filed a grievance. But the film came in on budget.

Jarchow admits that if he’d known how difficult the business was, he might not have started Regent. "We’ve made many smallish mistakes along the way," he says. "I’m horrified to think how little I knew."

A Channel of His Own

Jarchow is now focused on diversifying Regent. For one thing, he wants to take advantage of the current chaos in the exhibition business by acquiring additional theaters. Jarchow wants "jewel box" properties like the Showcase in LA and the Regent Highland Park, located in neighborhoods where sophisticated filmgoers will support small films such as Sexy Beast.

"We’re perfectly set up here for exclusive and specialty product," he says. "Plus you don’t have to hold them as long." (To get Pearl Harbor, for example, Regent would have had to commit to 12 weeks, which would have been a financial disaster considering the number of competing multiplexes where it was also booked.) And if there’s a business Jarchow knows as well as anyone, it’s commercial real estate.

His other goal is to secure a pipeline for non-theatrical distribution. Jarchow won’t mention the name of the broadband provider with whom he is now in negotiation. "What we can say is the next development will be a couple of strategic alliances," he says. If the deals are inked this fall, Jarchow expects the company to go from producing 12 to 15 movies a year to producing as many as 50. Regent would create several channels along the lines of the Independent Film Channel. "Owning the pipeline is where the big money is," he says. "We will create or acquire films or use the film library. The channel gives us a natural outlet. You can control your own destiny. And it’s within our competency to do."

But why stay in Dallas? For one thing, he likes being away from operations. "This week, I can sit here and focus on getting the financial and budget presentations together," he says. And another reason is the city itself. "I really enjoy living in Dallas, and it’s one of the best cities in the world to travel from." He goes to LA every other week, London and Germany a few times a year, and the Cannes Film Market once a year.

And with Jarchow watching the bottom line from Dallas, Regent has survived while other independents, such as Shooting Gallery (producer of the critically acclaimed You Can Count on Me) and Flashpoint, have collapsed. Even Artisan, producer of the phenomenally successful Blair Witch Project, is floundering.

Could Regent become the next Miramax, the independent turned major studio known for quality hits like Shakespeare in Love?

"You’re looking at the Bob and Harvey Weinstein of the 21st century," Mark Altman, screenwriter of Free Enterprise, a movie acquired by Regent in 1999, has said.

Maybe it’s a good thing not to be in Hollywood.

Current Regent Films

Famous and not so famous actors star in Regent’s diverse film portfolio.

Boltneck. Teen monster comedy. Matthew Lawrence, Judge Reinhold, Shelly Duvall, Christine Lakin.

Britannic. Thriller about sinking of Titanic sister ship. Jacqueline Bisset, John Rhys Davies, Edward Atterton, Amanda Ryan, Bruce Payne.

The Brotherhood. Frat boy horror. Nathan Watkins, Josh Hammond, Bradley Stryker, Elizabeth Bruderman, Michael Lutz.

The Brotherhood II:Young Warlocks. High school horror. Forrest Cochran, Sean Faris, Stacey Scowley, Jennifer Capo, Noah Frank.

Crash & Byrnes. Buddy cop action/adventure. Wolf Larson, Steven Williams, Sandra Lilly Lindquist, Greg Ellis, Joanna Pacula.

Deep Freeze. Frozen creature feature. Goetz Otto, David Milbern, Alexandra Kamp, Howard Halcomb, Rebekah Ryan.

Free Enterprise. Comedy of two young filmmakers’ encounter with their idol, Captain Kirk of "Star Trek." Erik McCormack, Rafer Weigel, Audie England, Patrick Van Horn, William Shatner.

Gen-Y Cops. Asian action flick. Paul Rudd, Stephen Fung, Sam Lee, Edison Chen, Maggie Q.

The Ghost. Legendary female fighter poses as Internet bride in action/adventure. Michael Madsen, Chung Lai, Cary-Hiroyuki, Tagawa, Richard Hatch, Brad Douriff.

Gods and Monsters. Drama of last days of horror film director James Whale. Sir Ian McKellen, Lynn Redgrave, Brendan Fraser, Lolita Davidovich, David Dukes.

A Good Night to Die. Comedy/thriller. Michael Rapaport, Seymour Cassell, Deborah Harry, Ally Sheedy, James Russo, Frank Whaley, Robin Givens, Ralph Macchio.

Harlan County War. Drama based on 1976 coal miner’s strike. Holly Hunter, Stellan Skarsgard, Ted Levine, Wayne Robson, Alex House.

I’ll Remember April. WWII coming-of-age story. Trevor Morgan, Haley Joel Osment, Mark Harmon, Pam Dawber, Pat Morita.

It Had to Be You. Romantic comedy. Natasha Henstridge, Michael Vartan, Michael Rispoli, Olivia D’Abo, David Healy.

Just Can’t Get Enough: The Chippendales Story. True-crime drama about sex, drugs, and hot male dancers. Jonathan Aube, Shelley Malil, J.P. Pitoc, Peter Nevargie, Kevin Daley.

Kiss of a Stranger. Mystery thriller about a TV personality stalked by a stranger. Mariel Hemingway, Dyan Cannon, Corbin Bernsen, David Carradine, Matt Battaglia.

Loyal Opposition. Political action/adventure. Joan Van Ark, Nick Mancuso, Corbin Bernsen, Rick Springfield. Fox Family Channel.

Maze. Drama about woman with Tourette’s. Rob Morrow (who also directed), Craig Sheffer, Laura Linney, Gia Carides, Robert Hogan.

Nostradamus. Time-travel thriller. Rob Estes, Joely Fisher, Fintan McKeown, Michael Gwynne.

Possessed. True story of only 20th century exorcism sanctioned by Catholic Church. Timothy Dalton, Henry Czerny, Jonathan Malen, Piper Laurie, Christopher Plummer.

Rated X. Drama of porn pioneers. Emilio Estevez, Charlie Sheen, Rafer Weigel, Tracy Hutson, Megan Ward.

Red Team. FBI team chases serial killers action/adventure. Patrick Muldoon, Cathy Moriarty, Fred Ward, Tim Thomerson, C. Thomas Howell.

Sanctimony. Mystery thriller. Casper Van Dien, Michael Pare, Eric Roberts, Catherine Oxenberg.

Sordid Lives. Gay-themed black comedy. Olivia Newton-John, Beau Bridges, Delta Burke, Bonnie Bedelia, Leslie Jordan.

The Specials. Dysfunctional super-heroes comedy. Rob Lowe, Thomas Haden Church, Jamie Kennedy, Paget Brewster, Jordan Ladd.

Speedway Junky. Coming-of-age drama. Jonathan Taylor Thomas, Daryl Hannah, Tiffani-Amber Thiessen. Executive produced by Gus Van Sant.

Spent. Drama of dysfunctional twentysomethings. Jason London, Richmond Arquette, Rain Phoenix, Barbara Barrie, Margaret Cho.

Storm Chasers. Twister action. Kelly McGillis, Wolf Larson, James MacArthur, Liz Torres, Adrian Zmed. Fox Family Channel.

Twilight of the Golds. Family drama. Faye Dunaway, Garry Marshall, Brendan Fraser, Jennifer Beals, Rosie O’Donnell. Showtime.

A Woman’s a Hell of a Thing. "Almost romantic" comedy. Angus Macfadyen, Penelope Ann Miller, Ann-Margret, Kathryn Harrold.

Regent Entertainment Corporate Site