Deadline's Most Valuable Blockbuster Tournament (2016)

[TalismanRing]

It's that time of the year again when Deadline's experts give us the countdown of the 20 most profitable films of the year, according to their calculations. 

 

Yes we know some of their numbers can be off, based on incomplete or unsubstantiated information and with faulty estimations (particularly future home video) but as a year end round up it's the best we've got and gives some insight into participation deals, distribution costs and Home Video and TV revenue.  They used to try and estimate profits from merchandise tie ins but they don't bother with that any more.

 

 

Quote

 

It happens every year, when the NCAA kicks off March Madness. That’s when Deadline launches its own tournament to ascertain which film from the previous calendar year made the most money. Entry into the tournament is based on top domestic gross, and we count down from No. 20 all the way to crowning a champion. (See last year’s tournament here.)

 

Even in a record-setting year in box office revenues like we saw in 2016, when it comes to evaluating the financial performance of top movies, it isn’t about what a film grosses at the box office. The true tale is told when production budgets, P&A, talent participations and other costs collide with box office grosses, and ancillary revenues from VOD to DVD and TV. To get close to that mysterious end of the equation, Deadline is repeating our Most Valuable Blockbuster tournament, using data culled by seasoned and trusted sources.

 

We will run a breakdown of two films per day in separate posts, then name a winner and present the data en masse. This year, before the final film, we’ll run a group of films that didn’t make the tournament because they didn’t hit the gross mark, but did turn in extraordinary financial performances that deserve to be noted. The difficulty in ascertaining exactly what talent gets after cash break keeps this from being a perfect science. The aim is to demystify the process and makes it clear that bragging about a weekend win, when it’s a small portion of budget and other costs, is often a hollow victory.

 

 

I'll start off posting 20 to 11 because that's where Deadline is right now.  10 -1 added as the come in.

 

 

Edited March 25, 2017 by TalismanRing

[TalismanRing]

Deadlline's full articles and PDF charts at their respective links

 

20. Centrall Intelligence Agency

 

Net Profit: $52m

Cash Return: 1.28

 

Quote

It bettered projections to open at $35.5 million domestic, and it went on to gross $127 million. Participations and off-the-tops reached $30 million, but the film’s global gross of $216 million on total costs of $184 million leaves New Line/Warner Bros with a net profit of $52 million when all ancillary revenues are counted, for a respectable cash on cash return of 1.28. Not sure if that’s good enough for a sequel, but it’s good enough to be No. 20 on our charts.

 

 

19. Don't Breathe

 

Net Profit: $50.10m

Cash Return: 1.52

 

Quote

That is exactly what happened for Sony and Good Universe on Don’t Breathe, but the surprise is that because of the way that Good Universe puts together these packages, the director Fede Alvarez, his co-writer Rodo Sayauges, and the producers did very well on the kind of back-end participation one sees on independent films that score big. Still, our experts’ breakdown has it netted out at $59.10 million for Sony and Good Universe, for a Cash on Cash Return of 1.52.

 

 

18. La La Land

 

Net Profit: $68.25m

Cash Return: 1.47

 

Quote

 

The film was greatly helped by launching with all the attendant awards-season attention that goes to a frontrunner, and has grossed $150 million here, and another $277.1 million overseas; that includes $35.8M that was made in China. Foreign contribution of $55M accounts for Lionsgate’s pre-sales on the original musical plus the profits it generated in the UK where they control distribution of the film.  Chazelle was an up-and-comer writer-director, while Stone and Gosling and among the best and brightest young stars, so not surprisingly the Participations and Residuals and Off-the-Tops are significant and total about $47.5 million. According to our experts, La La Land returned $68.25 million in net profits on total costs of $143.75 million, for a Cash on Cash Return of 1.47.

 

 

 

 

17.  The Angry Birds

 

Net Profit: $72m

Cash Return: 1.32

 

Quote

On a very reasonable $73 million production budget, Angry Birds grossed $107.5 million domestic, $166 million foreign, and a whopping $75.87 million in China to reach a $349.78 million global total. The Participations and Off-the-Tops were a reasonable $26 million. That amounted to $72 million in net profit and a Cash on Cash Return of 1.32. That’s

 

 

16. Kung Fu Panda

 

Net Profit: $76.65m

Cash Return: 1.23

 

Quote

 

Kung Fu Panda 3′s net production costs were $145 million, but even with the return of so much high-priced voice talent, the Participations and Off-The-Tops were a manageable $25.9 million. That left a studio net profit of $76.65 according to our experts, and a Cash on Cash Return of 1.23

 

 

 

 

 

 

 

 

[TalismanRing]

15. Hidden Figures

 

Net Profit: $95.55m

Cash Return: 1.64

 

Quote

It was a solid hit for Melfi, who wrote the script with Allison Schroeder, and it one of the few Best Picture candidates that played like a throwback big studio film that was like a bowl of chicken soup and a welcome entry following last year’s Oscars so lamented for lack of diversity. The film grossed $165.68 domestic and only $48.78 overseas for a $214.46 global total. The Participations and Off-the-Tops reached $36 million, and that meant a $95.55 net profit for Fox, and a Cash on Cash Return of 1.64.

 

 

14. The Conjuring

 

Net Profit: $98.3m

Cash Return: 1.54

 

Quote

The sequel did cost twice the original’s $20 million production budget, and the return of Wan and castmembers explains the $20 million in Participations and Off-the-Tops that are high for genre films. But the bottom line is a scary windfall for New Line, which scored $98.3 million in net profit for a Cash on Cash Return of 1.54. The original spawned another spinoff, Annabelle, which is being sequelized.

 

 

13. Batman v Superman

 

Net Profit: $105.7m

Cash Return: 1.18

 

Quote

 

Batman V Superman did $330 million in domestic gross, with $447 million overseas and $95 million in China. These would have been lauded on most movies, but the film simply didn’t match expectations that came with the prospect of a collision between such iconic characters, at such a high production and marketing budget. The bottom line was that Warner Bros made a net profit of $105.7 million, and a respectable Cash on Cash Return of 1.18.

 

 

*Participation points: $55m

 

12. Moana

 

Net Profit: $121m *

Cash Return: 1.32

 

Quote

The film grossed $247 million domestic, with $319 million foreign and $32 million in China for a $600 million total. After a total of $30 million in Participations and Off-the-Tops, Moana turned in a $121 million in net profit, and a Cash on Cash Return of 1.32. That’s a respectable score for a live-action or animated film for most studios, but it was only the eighth-best performer of the year for Disney.

 

*Does not include continuation of Japan run

 

11. Dr. Strange

 

Net Profit: $122m

Cash Return: 1.3

 

Quote

Factor in about $38 million in Participations and Off-the-Tops, and that leaves Marvel’s parent company Disney with a net profit line of $122 million, and a Cash on Cash Return of 1.3.

 

[baumer]

Surprised DS was that profitable

[TalismanRing]

14 minutes ago, baumer said:

Surprised DS was that profitable

 

$165m budget  with a $677m gross.  The $38m in participation points though according to previous Deadline year end breakdowns was higher than other MCU solo films (probably all those not named Iron Man 2 and 3) but wasn't too onerous.

 

 

Edited March 25, 2017 by TalismanRing

[Viceversa]

thanks for doing this.

[The Panda]

Weird they're ranking them solely by net profit.  Cash Return is just as important as it shows that the film was the better investment per dollar spent.

 

High profit amounts are nice, but profits when you spend next to nothing (Hidden Figures or Conjuring) are even better.

 

For example, you could invest in The Conjuring 2 and Don't Breathe (spending less) and make more profit than you would from BvS.  

Edited March 26, 2017 by Beauty and The Panda

[Barnack]

1 hour ago, Beauty and The Panda said:

Weird they're ranking them solely by net profit.  Cash Return is just as important as it shows that the film was the better investment per dollar spent.

 

High profit amounts are nice, but profits when you spend next to nothing (Hidden Figures or Conjuring) are even better.

 

For example, you could invest in The Conjuring 2 and Don't Breathe (spending less) and make more profit than you would from BvS.  

 

One reason I would imagine that they do not do a ROI type of ranking.

 

1) Too many possible movie in the top 20, if you go by net profit you have probably 50 max suspect to run numbers on, on ROI every small movie with a good box office become a possible candidate to the top 20, and for smaller movie a larger portion of the revenue are unknown, it would be too much work I would assume.

 

2) If you start a cash return analysis, the amount of time between the spending of the money and the making of the money become also very important, making it harder

 

3) For a big studio, I'm not sure if I would say that cash return is 100% as important, ie, a giant movie with a 24% ROI and a 200 million net profit is probably still better than one small movie that made 27% and 22 million net profit (sure if it was a reproducible product/formula they would prefer the better ROI and just do more of them, but that not really how it work in the movie world), starting that balancing act would make it a bit hard.

Edited March 26, 2017 by Barnack

[Barnack]

8 hours ago, TalismanRing said:

Yes we know some of their numbers can be off, based on incomplete or unsubstantiated information and with faulty estimations (particularly future home video) but as a year end round up it's the best we've got and gives some insight into participation deals, distribution costs and Home Video and TV revenue.  They used to try and estimate profits from merchandise tie ins but they don't bother with that any more.

 

Their number are still very good (they are probably made by people that actually worked in distribution ?), saying that I only compare 2 deadline estimate with actual leaked studio accounting (22 jump street/ spider-man), stuff like home video and marketing expense they are really close, I imagine marketing is public so you can evaluate it, home video performance is heavily correlated to the genre and box office.

 

What they get the more wrong is the movie budget obviously, those being often 100% secret and even more wrong is the participation deals that they tend to underestimate a lot, it is around 7% of a studio total expense and they often write very small number like 10-15 million even on a successful sequels staring big names.

 

They also tend to call it studio net profit, while most of those movie have co-financier and the profit tend to be splitted a little bit.

Edited March 26, 2017 by Barnack

[Barnack]

8 hours ago, baumer said:

Surprised DS was that profitable

 

Well it did a monster 677 million on a rumored small budget of 165 million, if that kind of result didn't lead to 9 figure gross profit Hollywood would be in big difficulties.

 

That budget can be a little underestimated and the participation bonus (I mean, Kevin Feige must be getting nice points by now, maybe even first dollar gross and Cumberbatch is a really big name) probably are, so chance are good that they are overestimating the profit a little bit but probably not by much more than that.

 

But still it was such a giant success, if we use a movie that we know the actual revenue/expense with a similar budget/box office for a comparison like Hancock

 

Hancock

Budget: $166.05

Total Lifetime Grosses

Domestic:	$227,946,274	36.5%
+ Foreign:	$396,440,472	63.5%
= Worldwide:	$624,386,746

 

Doctor Strange

Budget: $165 (rumored)
Total Lifetime Grosses

Domestic:	$232,641,920	34.3%
+ Foreign:	$444,919,741	65.7%
= Worldwide:	$677,561,661

 

Hancock

Total revenue 660.67 million

Total cost: 457.142 million

Gross margin: 203.528

 

Cost breakdown

Production: 166.05

Overhead: 14.11

Residual: 26.65

World release P&A: 168.42

Home entertainment world release: 79.6

Tv release cost: 1.851

Others: 0.461

 

Most of it went to Will Smith and others with points (but I would imagine mostly Will Smith) with a really big 113.1 million in participation bonus, 10.4 million to the third party investor and 78.6 million to the studio.

 

Doctor Strange not getting close to Hancock margin of profit despite a bigger box office and cheaper digital world theatrical release/Home video release show how smaller the margin are getting because of the decline in HE/TV revenues in that last 10 year's.

 

 

Edited March 26, 2017 by Barnack

[baumer]

Thanks for the breakdown.  I just hated the movie so much, I forgot how much it made.

[cannastop]

No updates from Deadline today. I call shenanigans.

[TalismanRing]

Ask and you shall receive. Just posted.

 

10. Suicide Squad

Net Profit: $158m

Cash Return: 1.34
 

Quote

The film nonetheless grossed $325 million domestic and $420 million foreign for a perfectly respectable $745 million total on a $175 million production cost. Our experts peg the Participations, Residuals and Off-The-Tops at nearly $60 million, understandable given the marquee names and filmmaker. Still, Warner Bros came away with $158 million net profit and a Cash on Cash Return of 1.34.

 

 

 

9. Fantastic Beasts

 

Net Profit: $164m

Cash Return: 1.37

 

Quote

A domestic gross of $233 million was more than doubled by its $492 million offshore haul, and China kicked in $85 million for an $812 million global gross on a $180 million budget. The film carried a pricey $53 million budget line for Participations, Residuals and Off-the-Tops, understandable given Rowling, Yates and some of the returning brain trust. The total net profit to Warner Bros was $164 million for a Cash on Cash Return of 1.37.

 

 

Edited March 27, 2017 by TalismanRing

[cannastop]

Quite the shocker at #8

 

Spoiler

Captain America: Civil War

 

[Barnack]

1 hour ago, cannastop said:

Quite the shocker at #8

 

  Hide contents

Captain America: Civil War

 

 

Sure removing merchandising revenue impact estimate will hurt marvel/dc release quite a bit, but still it does shoe that the market is changing rapidly, an around 473 million in box office revenue that is making only a total revenue of 825 million. (57.3% from theatrical)

 

Transformer 4 only 2 year's ago was making an estimated 813 million without merchandise with a significantly smaller amount of 413 million in box office revenue (50.7% from theatrical, and that was worst case scenario pretty much making close to half your revenue from the box office at the time) and one would think that Civil War was a better home video performer than Transformer 4 once era adjusted.

 

And they did that Civil War estimate using really reasonable estimated production budget and bonus, you have a long list of people getting points on a movie like that.

Edited March 28, 2017 by Barnack

[baumer]

So for all the flack that DC and WB gets for how they are handling the DCU, the last two films they put out were extremely profitable.

[aabattery]

Just now, baumer said:

So for all the flack that DC and WB gets for how they are handling the DCU, the last two films they put out were extremely profitable.

 

Warner Brothers in general, really. They didn't get the recognition I think they deserved for 2016; they had a killer year, but it was overshadowed by Disney. The same thing will probably happen this year as well.

 

But they've impressed me a lot. Especially their marketing team.

[Barnack]

8 minutes ago, aabattery said:

 

Warner Brothers in general, really. They didn't get the recognition I think they deserved for 2016; they had a killer year,

 

Really yes, the operating income of Warner Bros jumped from 1416 to 1734 million (22% increase) despite lower video game sales and foreign exchange rate, will need to wait for the 2016 financial report to more details but it is apparently from the success of their 3 big movie.

 

Revenues were essentially flat at $13.0 billion, reflecting higher theatrical and television revenues offset by lower videogames revenues and the impact of foreign exchange rates. Theatrical revenues increased primarily due to the box office releases of Batman v. Superman: Dawn of Justice, Suicide Squad and Fantastic Beasts and Where to Find Them. Television revenues grew primarily due to increased production. Videogames revenues declined as the prior year benefited from the releases of Mortal Kombat X and Batman: Arkham Knight.

 

Off those 3, Suicide Squad was specially impressive.

[TalismanRing]

8. Captain America: Civil War

 

Net Profit: $193m

Cash Return: 1.31

Quote

All that star power — Downey, the anchor of the Marvel universe, gets paid, and so did others — puts the compensation line at the highest level we’ve seen so far. Our experts say that the Participations and Residuals and Off-the-Tops reached $122 million. That pulls down the net profit, but when you consider all the other things Marvel accomplished with this film — down to bolstering its nascent Ant-Man franchise play — the numbers are superheroic. Marvel’s Disney earned a net profit of $193 million, for a Cash on Cash Return of 1.31.

 

 

 

[TalismanRing]

7. Sing

 

Net Profit: $194m

Cash Return: 1.66

 

Quote

The Participations and Residuals and Off-the-Tops totaled $40 million. So even though you’d have to go back to No. 14 The Conjuring 2 to find a film with as low a global gross total, our experts said that Sing still managed to turn a net profit for Universal at $194 million, for a Cash on Cash Return of 1.66.

 

* WW Print & Ads with $135m

 

(I think they're a low on that. It's what they had Moana at and it wasn't even close in TV spending in the US)