Robert Shaye.

Robert Shaye, chairman and chief executive officer of New Line Cinema Corp., recently read a script about a woman who was blind for most of her life but had a cornea transplant that enabled her to see again. With her vision returned, she is witness to a murder. But because of her shaky eyesight, she is unsure whether she actually saw the killer.

The killer stalks the woman, but the woman is able to turn the tide of the chase in her favor when the two are in a room together. The woman turns out the lights and, in the dark, is once again in her own element.

"It was a very compelling story. It just jumped out at me," Shaye said, describing the woman in the story as "feisty, interesting and sexy." New Line recently bought the script for "a couple of hundred thousand dollars" and plans to turn it into a movie.

Helping to choose scripts for development as movies is part of Shaye's job on the creative end of the company, but he is involved on the business side of the company as well.

About half of his time, Shaye says, is spent on the creative production process. He spends another 30 percent to 35 percent of his time working with New Line's president and chief operating officer, Michael Lynne, on business development and strategic planning, and the rest of his time is devoted to "going through trade newspapers," "fantasizing and pondering ideas," and figuring out how to develop them.

Shaye said industry trade publications are a stimulus for his mind in a variety of ways. For instance, sometimes he gets an idea for a way to better position his company, or finds a way to move the company in a new direction. Other times, Shaye himself comes up with an original idea, and he finds someone or something in the trades that will help bring the idea to fruition.

Reading the trades is "almost a kind of active meditation," Shaye noted.

Both his creative and business experience go back a long way. Shaye began his film career at age 15 when he wrote, produced and directed a 10-minute training film for the employees of his father's supermarket. The movie was silent, and Shaye used title cards instead of voices.

"It wasn't the most elaborate production, as one could imagine," the 52-year-old, shaggy-haired Shaye says with a grin.

Instead of directly entering the movie- making business, though, Shaye majored in business administration at the University of Michigan.

"Filmmaking wasn't a very reputable profession to go into" at the time, he says. Instead, Shaye listened to his parents and "dutifully went to law school" at Columbia University.

But Shaye didn't practice law after he graduated. Instead he got a job at the Museum of Modern Art in New York City. At the same time, he also founded a company in 1967 that operated out of his fifth-floor, walk-up apartment in Manhattan's East Village and began distributing films to college campuses. The company was called New Line Cinema.

One day about five years later, he watched a film called "Reefer Madness." The film was being distributed by the National Association to Reform Marijuana Laws to select college campuses as a fundraiser. Shaye began distributing the film on a much wider basis, and the movie eventually grossed $2 million.

That was 24 years ago. New Line, which is publicly held, boasted earnings of $6.3 million on revenues of $133 million during 1990, and earned $3.3 million on revenues of $66.7 million during its fiscal 1991 third quarter ended Sept. 30. The production company has headquarters in both Beverly Hills and Manhattan and employs a combined staff of 200.

New Line is best known for its blockbuster success with "Teenage Mutant Ninja Turtles" and the "Nightmare on Elm Street" series. The company specializes in catering to specific niches -- some of its movies are aimed at adults and others to children.

"Ninja Turtles," which New Line released in 1990, cost the company only $12 million to make but grossed $135 million domestically. It is the story of four turtles who fell into a manhole, were doused with radioactive goo and turned into human-sized superheroes who communicate with expressions like "Surf's Up," "Cowabunga" and "Let's Party Dude."

The idea for the film was brought to Shaye by his head of production and the head of distribution who "both literally came running into my office." They said kids are really avid about these characters and that this "is the greatest thing," Shaye says, adding that several of his staff also have a say in which scripts are chosen for production.

The first "Nightmare on Elm Street" film, which made a cult villain of Freddy Kreuger, a crater-faced razor-nailed psychopathic killer, was released in 1984. The first three films in the series were made with a cumulative budget of $10 million, but together grossed $100 million.

The recent September release of the sixth and final film in the Nightmare series, "Freddy's Dead: The Final Nightmare," cost only $9.5 million to make but has grossed $35 million at the box office so far.

New Line has been so confident of its success lately that the production company proposed in December a rescue plan for bankrupt Orion Pictures Corp.

Under the proposal, New Line would take over Orion's distribution arm and gain access to the New York-based studio's 800-title film library. Both New Line and Metromedia Corp., Orion's largest shareholder, proposed combining to invest about $50 million in the bankrupt company in exchange for an equity position when the company is reorganized. Details of the plan are still sketchy and still subject to a number of approvals and conditions.

There are several reasons why Orion would be a boon for New Line, Shaye said. For one, Orion has a valuable library (800 titles). Also, the acquisition of Orion could provide New Line with the capability of producing the kind of big-budget films it hasn't had the resources to make in the past, according to Shaye.

It has only been in recent years that New Line has been on solid financial ground, Shaye says, recalling a time in 1983 when the company verged on bankruptcy as it tried to get into production with the first Nightmare film.

New Line had chosen the script because it "had a good hook to it." The company had trouble getting financial commitments (at least one investor had backed out and decided to invest in another movie instead). New Line was running out of money to pay the director of the film and his crew, Shaye says.

"Our lawyer at the time said, 'One of the things I think you ought to do is visit a bankruptcy lawyer, just for the sake of doing it,'" Shaye said. "We went to go see this lawyer in New York. It was like going into a funeral parlor," he says, cracking a joke about the organ music playing in the lobby.

"That was one of the scariest experiences I'd ever had," he adds.

New Line pulled it together though by persuading one investor to up his backing from 25 percent to 60 percent. "It cost us a lot of important rights to convince them to change the deal, but we had no choice," Shaye said.

The first "Nightmare on Elm Street" turned out to be worth a fortune. Nevertheless that "was a very difficult time for us," Shaye says.

He says he and his staff have developed a strategy for selecting films that are going to be successful. Shaye calls it "prudent aggression," or "the way a guerrilla fighting organization would position itself. You have to choose your fights carefully and try to be where the big guys aren't."

As a result, New Line seldom releases flicks during the height of the summer and holiday movie seasons. In addition, it doesn't aim to hire "wildly expensive talent," but focuses on finding newer, younger talent.

"Our most important marketing hook is the story," says Shaye, who earns $450,000 a year plus a bonus of 5 percent of the company's pre-cash profits.

Shaye says he takes a rather hands-on approach to the development process. He reads every script that is being put into production, and meets with the writer, director, producer and cast of each film to see how the production is taking shape. He also says he takes an active role in the way a picture is edited and the way the overall film turns out.

He has taken the title of producer or executive producer on several of the company's films.

Shaye says he has always had an inclination toward the movie industry, and is very compelled by images and audiovisual effects.

"Deep down inside I get a lot of enjoyment out of entertaining people," he says, explaining that he also likes to cook and tell stories.

Among his own favorite movies, aside from those released by New Line, are "Of Mice and Men" and "ET."

"These are all films that have intellectually seduced me," he says. "They made me cry, made me laugh, and made me think carefully about something that I hadn't thought about before."