Someone asked about profitability in another entry, so I responded in - surprise! - excessive depth. Then someone sent me this link to an IGN video about Sam Jackson not doing Iron Man 2 over, he says, money.
To quote the quoting of the video:
"I would love to do it. I'm not sure that they would love for me to do it. It seems as though they're having money problems," Jackson said with a grin. He continued by saying, "they're caught up in the economic crisis also. Iron Man 1 didn't make much money, so they can't afford to pay the rest of us anymore."
And so... here is my look at some of last year's dollars and nonsense...
If The Dark Knight was "just" double the movie that Batman Begins was, it would have been modestly profitable and WB would have had a bad year by most standards.
As I have written before, take away TDK and WB's "super" year looks almost exactly like Fox's "disastrous" year.
Iron Man was another case where the value to Paramount was not nearly what it is perceived to be. $60 million of pure profit is great. But if that’s all your studio made on a $600 million worldwide gross, it’s literally one Love Guru away from being erased.
But more interesting, even Marvel, which made most of the profit on that film, is not all hearts and roses. They took in about $260 million on the theatrical release... which is just about $25 million in the red, given the production cost and P&A costs. So they made, say, $125 million in profit on post-theatrical. Great. And on The Incredible Hulk, they were around $150 million in the hole after worldwide theatrical and probably lost about $50 million in the end. So between two films grossing about $850 million worldwide, the profit for the primary risk taker (about a $500 million investment) was probably around $50 million, all in.
Movies cost too much. Marketing costs too much.
WB did $230 million worldwide on Get Smart. That should have been an absolute cash cow. But with a production cost that is said by everyone (except WB) to have crept over $100, the film will barely make it into the black.
Of the top 20 movies last year, the most profitable films to the distributing studio were likely Mamma Mia! #1, TDK #2, Twilight #3, Sex & The City #4, and High School Musical 3 or Wanted #5.
What do 5 of those 6 films (TDK the exception) have in common? Less than $80 million in production costs.
Truth is, only 3 or 4 or 5 of the Top 30 films (worldwide gross) actually lost money last year. But with DVD still sliding, the same group might have a few more casualties if released this year. But with so much splitting on these films, the amount of profit on the big hits is less for the studios – or non-existent in the 4 films in the Top 20 that are distribution-only deals – than in the “good old days.” As a result, there is less profit to absorb the bigger-than-ever losses on the films that die.
Margins for this business have not been, in the last 20 years, better than 20% on investment in the best years. Nowadays, a great year is 12% on investment. And a bad year can legitimately be a red ink year for a studio.
Obviously, all of these numbers are rough. There may well be an anomaly on a particular film that I don’t know about… something like the licensing cash cow on Cars last year. And I am not taking into account the record sales for HSM3 this year.
But it’s tougher out there than it has been.
When New Line released Return of the King and grossed $1.1 billion worldwide, it had 11 other movies that year and not one of them cost as much as $50m to produce. Warner Bros, after sucking in NL, released 19 films this year and ten of them cost more than $50 million to produce and at least three of those, besides TDK, cost over $100 million to produce.
And let’s not fail to point out… New Line, which had that gross and the non-rings frugality just five years ago, is now out of business.
And this year, left to their own devices, they would have spent just over $300 million in production and generated just over $1 billion worldwide in theatrical alone. With P&A, that still would have been profitable only because of post-theatrical, but it would likely have been hundreds of millions.
Read the complete post at http://www.mcnblogs.com/thehotblog/archives/2009/01/super_money.html