VIDEO BUYER/SELLER CASHING IN ON TOO MUCH OF A GOOD THING.

Byline: Greg Hernandez Staff Writer

BURBANK - What do you do with hundreds of thousands of extra copies of ``Throw Momma From the Train'' that are just sitting in a warehouse collecting dust?

Ryan J. Kugler found out about them and came up with an idea: Buy them up at a bargain and resell them for a profit to retailers and video stores eager to offer discounted movies to their customers. Now Kugler finds himself heading DVA, also called Distribution Video & Audio, a unique $1.5 million-a-year business that buys excess stock from studios and other suppliers and finds sales venues for them.

Those venues are obvious ones, such as major retailers and video-store chains, but they also include public libraries, schools, specialty gift shops, cruise ships, museums, zoos and even corner gas stations.

``We are clued in with all the studios and sell the overstock to anyone from the major mass merchants to the dollar-store chains who stuff their bargain bins with them,'' said the boyish Kugler, the company's 31-year-old president. ``We have ridden the wave of changes going from VHS to DVD, and we see it as the same up-and-down business.''

DVA, touting itself as the largest buyer of entertainment closeouts, overruns and excess inventory, sells an average of 15 million units a year in DVD and VHS videos, music CDs and video games.

``It might be sitting in a warehouse somewhere for years and be covered with dust, or we might have to take the cellophane off and re-shrink-wrap it,'' said Kugler. ``Every deal does involve some work to get the product ready for sale.''

DVA, with corporate headquarters in Burbank and operations in Palm Harbor, Fla., where its warehouses are located, has a client base of about 900 different entities that it buys from or sells to, including Universal, Disney, Paramount and Warner Bros. movie studios, as well as Target, Best Buy, Barnes & Noble and smaller chains throughout the United States.

``They come up with some good stuff and are a good resource for us,'' said Tom Vellios, co-founder and chief executive officer of Five Below, a chain of 50 stores based on the East Coast. ``We find it important to change our merchandise all the time because the teen market is quite fickle, and DVD plays a nice role in that.''

Kevin Milligan, vice president of merchandise for the Virgin Megastore chain, said DVA enables his stores to sell used DVDs fresh off the ``new release'' shelf for a bargain price.

``There's really only a couple of companies of their size that source that kind of inventory - recent DVD releases that have been out for 30 to 45 days and have come out of rental programs,'' Milligan said. ``It is bulk quantities of recent releases that fit within our market.''

Kugler got his start in the business at the age of 17, when he began working as a video buyer for his father, Ben Kugler, who founded the company in Florida in 1988. Initially the company sold used VHS videos to rental chains, including Blockbuster and Hollywood, and to smaller, independently owned video stores.

It was the son who came up with the idea of searching out overstock and who shifted the focus of the business. His father remains the honorary CEO.

The ``Throw Momma'' situation occurred 10 years ago when McDonald's embarked on a marketing campaign involving a VHS movie promotion that also included ``Dirty Rotten Scoundrels,'' a comedy about two con men played by Steve Martin and Michael Caine. ``Throw Momma,'' released in 1987, was a comedy about a man (Danny DeVito) looking for ways to get rid of his overbearing mother.

After just a few days, McDonald's realized that neither film was ideal family fare and canceled the order, so there were leftover movies.

Other titles big and small followed. They have ranged from major movie hits, such as ``Jurassic Park'' and ``Wedding Crashers,'' to an extensive supply of Hanna-Barberra cartoons, to thousands of VHS boxed sets of a 1998 Winter Olympics collection. DVA will sell a title like ``Crashers'' for around $10, while a more obscure title might go for less than a buck.

``Every day it's a new title,'' Kugler said. ``It's the entertainment business. I'm always surrounded with some kind of new closeout, as opposed to making Bic pens on a conveyer belt.''

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com

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Photo:

(color) Ryan J. Kugler, president of DVA, is surrounded by DVD and VHS movie titles in his office at Burbank.

Tom Mendoza/Staff Photographer