breaking even rule of thumb/ancillary market revenue etc

[riczhang]

well it made 280mil WW..the studio made half of that=140mil

 

140*4=560

 

560-400(total costs)=160 mil profit

 

lol that's just fucking impossible..John Carter DID NOT and WILL NOT make 160 mil profit..

 

I think a lot of those figures do assume the movie isn't a giant blockbuster flop. The lopsided nature of John Carter's budget vs. gross, I would say makes some of those figures probably not apply. 

 

If you think about it, the fact that it only made 80 million domestically means that the film probably won't get much in the ways of Home Video or Network fees and I know for a fact that the merchandise sales were awful. So the ancillary revenues for the film were probably lower than can be normally attributed to a film. 

 

Besides, Disney already took a $200 million write-down for the movie, so it definitely lost money for Disney, otherwise they would not have taken that write-down. It's probably not in the neighbourhood of $200 million, but I'd say (as a rule of thumb) at least 50% of that. 

[Johnny Wiseau]

I think a lot of those figures do assume the movie isn't a giant blockbuster flop. The lopsided nature of John Carter's budget vs. gross, I would say makes some of those figures probably not apply. 

 

If you think about it, the fact that it only made 80 million domestically means that the film probably won't get much in the ways of Home Video or Network fees and I know for a fact that the merchandise sales were awful. So the ancillary revenues for the film were probably lower than can be normally attributed to a film. 

 

Besides, Disney already took a $200 million write-down for the movie, so it definitely lost money for Disney, otherwise they would not have taken that write-down. It's probably not in the neighbourhood of $200 million, but I'd say (as a rule of thumb) at least 50% of that. 

but it made lots of money overseas and it'll make up with international TV license fees etc,and not every movie has merchandising.

plus I don't care what studios "write off" or whatever,Hollywood accounting is laughable.

 

I believe John Carter flopped but it lost a couple ten millions not more.

[The Panda]

I figure the break even rule with just production costs works because home video and tv rights will likely cover marketing. (As well as merchandising)One of the reasons big animated movies are so profitable, they sell lots of toys.

[TServo2049]

I remember hearing early in HTTYD2's run that an added problem for it was that the toy sales were also below expectations.I know there were films in the past where poor toy sales added insult to injury (this is part of why Disney took a bath on Dick Tracy back in 1990, all the merchandise tie-ins didn't sell).

Edited August 17, 2014 by TServo2049

[lilmac]

I think a lot of those figures do assume the movie isn't a giant blockbuster flop. The lopsided nature of John Carter's budget vs. gross, I would say makes some of those figures probably not apply. 

 

If you think about it, the fact that it only made 80 million domestically means that the film probably won't get much in the ways of Home Video or Network fees and I know for a fact that the merchandise sales were awful. So the ancillary revenues for the film were probably lower than can be normally attributed to a film. 

 

Besides, Disney already took a $200 million write-down for the movie, so it definitely lost money for Disney, otherwise they would not have taken that write-down. It's probably not in the neighbourhood of $200 million, but I'd say (as a rule of thumb) at least 50% of that. 

 

 

I had heard somewhere that the loss turned out not to be bad as initially thought (the write-down was simply a projection).

[riczhang]

I had heard somewhere that the loss turned out not to be bad as initially thought (the write-down was simply a projection).

 

Write-downs are almost always an overprojection, unless they're trying to hide a big problem. 

[lilmac]

Write-downs are almost always an overprojection, unless they're trying to hide a big problem. 

 

Yes, that's my point.  The write-down for John Carter was larger than necessary.  The film wasn't as big of a loss as the write-down indicated on face value.

[HesAPooka]

The bottom line is none of us really know the amount of money the studios are making.  IMO, it has to be a hell of a lot more than we know.  For example, Expendables has a budget of 100 million.  The second one made 300 mill worldwide and yet LG opted for a third and put up the same budget.  Take marketing into account and these movies are not breaking even for LG.  So why are the budgets still that high?  They are making money somewhere and somehow, but I have no idea where.

I agree with that part. Just look at Denzel Washington's movies. They barely make twice their budget yet he keeps getting fairly big budget movie roles, and his salary from what I've read is quite big. I doubt they'd continue to pay someone so much money to keep making bombs.

[Johnny Wiseau]

I agree with that part. Just look at Denzel Washington's movies. They barely make twice their budget yet he keeps getting fairly big budget movie roles, and his salary from what I've read is quite big. I doubt they'd continue to pay someone so much money to keep making bombs.

also Adam Sandler movies come to mind..

typical budgets of 80 mil $ and in the end they make 180-210 mil (except of Grown Ups movies which they were a bigger success)..

yet there is a Sandler movie almost every year.

Edited August 18, 2014 by Johnny Wiseau

[baumer]

And Sandler and Washington are still getting 15-20 million per film.  So the question becomes WHY?

[HesAPooka]

Taken from reddit today on a thread about Edge of Tomorrow. I guess people will believe just about anything they read online.http://www.reddit.com/r/movies/comments/2dwvha/warner_brothers_has_really_committed_to_the/cju1nf3

[baumer]

Taken from reddit today on a thread about Edge of Tomorrow. I guess people will believe just about anything they read online.http://www.reddit.com/r/movies/comments/2dwvha/warner_brothers_has_really_committed_to_the/cju1nf3

 

So what are you saying?  

[Johnny Wiseau]

Taken from reddit today on a thread about Edge of Tomorrow. I guess people will believe just about anything they read online.http://www.reddit.com/r/movies/comments/2dwvha/warner_brothers_has_really_committed_to_the/cju1nf3

according to this "expert dude" this film didn't make 150 mil..it made 66 os+50 dom=116 mil

 

2nd of all..it's not true what he's saying..it might be true in China and that's about it.

[lilmac]

I believe him.

[eridani]

I can't find a way to start a new topic so I will be using this old thread since the topic is very similar. I hope that's okay.

 

So this is the famous example of Harry Potter and the order of Phoenix. Where studio claimed money was actually lost on it. Now, creative accounting isn't the purpose of my post. We all know they made money, otherwise sequels wouldn't have been made.

 

But can someone help me interpret some of these lines?

There is that first short column. "% FEE". Under it, it says 30 for Theatrical domesitc defined gross. I don't know what that is. It's not percentage of overall gross as the movie grossed 292 million in North America. So 30% should be 87 million. Even if 30% is what's NOT earned by the studio, that's still 70%, or 204 million. And as we see, neither of those figures are correct, as the paper cites 162 million as cumulative theatrical gross. That's roughly 55% of the box office earnings, though, which is actually quite close to what one can usually read on how much do studios take from NA box office.

 

What is "non-theatrical"?  it also has a 30 fee. and just 2 million dollars cumulative.

 

Television? what do those figures 25 / 35 / 40 represent? And why is gross to date zero? Since that document was from 2010 or late 2009, there MUST have been TV earnings by that point.

 

Foreign grosses again have some FEE numbers i don't  understand 15/35/40?  and its cumulative gross seems to be 45% of overseas grosses. Which, again, is very close to what can  one usually read on how much do studios get to keep to themselves.

 

Only 2 million for TV rights on foreign soil? How's that possible? Keep in mind this is 2008-2010, tv rights were still a thing back then. Harry potter 1 had its world TV premiere sold to ABC, for unknown number of showings over ten years, for 70 million! http://webcache.googleusercontent.com/search?q=cache:aiByY8oMWZIJ:articles.latimes.com/2001/nov/30/business/fi-9781&hl=en&gl=hr&strip=1&vwsrc=0  That's for a single network. Imagine multiple network just in NA, even if other rights are far, far less costly. Imagine premiere rights all over the world. BBC paid some 10+ million for UK rights for 10 movies, some of them old, some of them blockbusters at one point when they licenced a Harry Potter film. It should add up.

 

What is PAY TV category? IT says 42 million were earned from it. Is that old cable pay per view?

 

Video cassests refers to, I assume, complete home video etertainment. DVDs and such. For 87 million. This site doesn't have Order of Phoenix but it does have Half Blood Prince sales. https://www.the-numbers.com/home-market/packaged-media-sales/2010  119 million in 2009 and another 27 million in 2010. That's gross sales of course. Assuming order of phoneix earned similar money (Deathly hallows did) thats roughly 87 million out of 146 million. That's 60%. So studio makes just 60% of disc sales? Really? I would have thought retailer markups are less than that. Also, those the-numbers numbers are just North America. What about rest of the world disc sales? Surely it should add at least that much? But then what, did studio earn just 87 million out of 300 million? So studio earns just 30% of total disc sale gross? That too sounds very unlikely.

 

Merchandising at just 15 million also sounds suspiciously low for a movie like harry potter, but lets leave it at that.

 

So then we have all those earnings combined and we get to 609 million. Then there's suddenly a distributor's fee of 211 million. So distributor takes 34% ??? In this case, distributor is WB, but who is producer? Heyday films and.... Warner Bros. itself.  Fine, there's stuff to be paid to distribute the film, I get it.

 

So we get to Prints costing 29 million,

Dubbing, subbing 5 million

Marketing 131 million

Taxes and various dues to trade associations 10 million

Freight,  insurance, shipping etc 5 milliion

Guild and union payments 10 million. Just what are these for? Who is getting paid here for what work done on the film? (since it's clearly not part of production budget)

 

So we get to total expenses of actually getting the movie to cinemas, to home etertainment, marketing, etc (that's expenses OVER the production budget) of 191 million. And... that TOO gets deducted from the earnings.

So... the producers have to pay for ALL that. And the distributor doesn't seem to pay anything??? Yet it gets 34%? How does that work? What does the distributor do then, since they get 34% of earnings? It would seem logical they pay at least in part for marketing and distribution but it seems... no. They don't pay a penny in this example. It's all charged up to the producers.

 

So now when we deduct those costs from the 609 million earnings as well we get 206 million earnings.

But we have the production costs to cover.

315 million for what is labeled as negative costs and/or advance? Just what is that? I assume it MUST be the production costs but it's clearly something else as well. What? Why so high?

And then on top of everything else there's 57 million cost of interest. Huh? Does that suggest that producers didn't have the money, so they went and borrowed money from someone else and then they had to pay 57 million of interest to that investor???  That's ripe for malversation. I imagine the investor was a WB shell company itself.

 

So in the end, with 360 million of costs, we get a negative 167 million. A loss. 

 

I imagine the REAL accounting up to today, with a decade worth of various tv rights and streaming licencing was something closer to this:

 

162 million BO domestic

298 million BO overseas

50-100 million TV rights worldwide

100+ million disc sale profits

Merchandising and other 15-20 million

Total earnings 650 million

 

Total marketing and distribution expenses for BO and home entertainment 200 million.

NO distributor fee. Of if some, then a fairly small 5-10% true fee for various overhead costs.

 

Production costs 150 million. (I just used Box office mojo figure)

No costs for interests or such.

 

So 200+150+50 million costs. 400 million total, leading to 250 million profit. Even with full 35% taxes paid, (which is in itself questionable, with large companies evading taxes left and right) there should still be 160 million of pure money in pockets to those who have an actual stake in earnings.

 

But, as i said, lets leave the creative accounting aside. Are the earnings, as WB reported them, correct? Do they make sense?