The Flash | June 16 2023 | Ezra Miller, Michael Keaton | We’re stoping the count at a Nice 69% RT (it’s 72% For Real) | Please Remember that Your Enjoyment Of The Film is Not Based On Others Opinions And To Be Nice To Each Other

[Krissykins]

I’m sure tax incentives and rebates are already deducted from the final reported budget. 
 

For example, The Boogeyman was $41m before rebates, with the final reported budget as $35m. 
 

I could be wrong though. 

[von Kenni]

1 hour ago, JohnnyGossamer said:

So this applies to TLM and GotGV3 as well regarding the repay incentive? Or, were neither shot there? 

 

TLM yes, GOTG3 no since it was shot in Atlanta, Georgia. However Georgia used to have some good incentives too and likely still has. I'll look into all these more this weekend.

 

TLM was mainly shot in UK and partly in Sardinia but my understanding is that you need to have a UK based production entity (company), the invoicing and financing going through it, and at least 10% (need to double check) spent directly to local (UK) employees, contractors, etc. to get 25% of all costs for that UK entity to be paid back. E.g. Quantumania had around $194m of those and they cut a check that was 25% of it for Disney/Marvel. I calculated it already to my estimate of TLM breakeven point which is around $550m (used 25% of $200m, not the whole $250m to be conservative).

 

Scenario for the $550m WW breakeven point:

 

BO revenue: $300m DOM * 55% + $250m OS * 40% = $265m

TV & related rights/licensing fees: $140m

Home Entertainment revenue (DVD, BR, etc.): $95m

UK production repays: $50m

Other (e.g. merch): $35m

 

Total revenue: $585m

 

Production budget: $250m reported + 10% typical overruns = $275m

Marketing budget: $150m

Prints: $15m

Home entertainment marketing: $20m

Manufacturing (DVD, BR): $25m

Participation & residuals (crew, cast & key people income share): $45m

Studio overhead: $25m

Capital expenses & misc. (loans, capital interests, etc.): $30m (partly accounting method to discount the future tail revenue as present value)

 

Total costs: $585m

 

+-$25m to that breakeven, based on open-source information, and we should be in the right ballpark. There can be always some unknown contractual factors. E.g. Disney has probably packaged broadcasting licensing deals that include multiple of their live-action remakes of which TLM is part too so pretty hard to estimate the real TV rights revenue other than what they report as internal counting related to Disney+.

Edited June 10, 2023 by von Kenni
Updated breakeven points, merch, home entertainment sales

[von Kenni]

50 minutes ago, Krissykins said:

I’m sure tax incentives and rebates are already deducted from the final reported budget. 
 

For example, The Boogeyman was $41m before rebates, with the final reported budget as $35m. 
 

I could be wrong though. 

 

To my understanding no, but maybe varies by studio and incentive type (tax, direct repayment, free facilities, etc.). E.g. with Quantumania, the repayment was pretty much from the reported budget.

[JWR]

I'm gone for two weeks, and this thread implodes? 

[kayumanggi]

 

[JWR]

What are the projections looking like?

[Lucas]

oh that's an update

[WebSurfer]

23 minutes ago, Lucas said:

oh that's an update

Not sure why they did that…

 

The original description was fine I guess. Though, it didn’t really feel like a highlight reel or anything until the end.

[21C]

7 hours ago, von Kenni said:

Good news about the breakeven point. Apparently Flash was shot in the UK too and will get the 25% repay incentive from production costs. It seems that Disney and Warner produce all these big budget films mainly in the UK now.

 

If Flash has $220m budget and we assume about $50m repay, the breakeven box office number might be as low as $450m WW. Not bad at all. On the upside, even $600m+ would mean a nice profit already, and $700m+ would be super.

That wouldn't be taking into account the marketing budget though. THR didn't give an exact number, but it did say it's considerably high. So even if The Flash's budget got reduced to 170 million or something like that, let's say a 130 million marketing budget, which makes the whole thing have a total cost of 300 million.

Even if we were to assume this reaches 300 domestic, and then 300 internationally...

300 * 50 (DOM) = 150
300 * 40 (INT) = 120

270 in revenue. Still doesn't break even. I'm a bit weirded out by the math in your other post as well; I reaaally don't think one should include home sales when it comes to talking about "breaking even" in a theatrical run; it's the same trick that the Deadline Black Adam article pulled and I think it's a bit disingenous. 

Edited June 10, 2023 by 21C

[excel1]

It seems increasingly, obvious? that this is going to be a smash hit with the audiences that go see it. Word of mouth among GA looks to be very, very good. Not just "Forgettable fun" ala Shazam.  Presales for previews and the first few days aside, legs look like they will be extremely good given lack of true competition for a few weeks and summer week days kicking in. 

 

This, more than anything really, is the most valuable thing WB could have hoped for. This should help Blue Beetle, Aquaman, and whatever they dow with Flash moving forward.

 

If it does hit $90m opening weekend, I would say it has a great shot at $300m.

Edited June 10, 2023 by excel1

[von Kenni]

1 hour ago, 21C said:

That wouldn't be taking into account the marketing budget though. THR didn't give an exact number, but it did say it's considerably high. So even if The Flash's budget got reduced to 170 million or something like that, let's say a 130 million marketing budget, which makes the whole thing have a total cost of 300 million.

Even if we were to assume this reaches 300 domestic, and then 300 internationally...

300 * 50 (DOM) = 150
300 * 40 (INT) = 120

270 in revenue. Still doesn't break even. I'm a bit weirded out by the math in your other post as well; I reaaally don't think one should include home sales when it comes to talking about "breaking even" in a theatrical run; it's the same trick that the Deadline Black Adam article pulled and I think it's a bit disingenous. 

 

I  calculated exactly $130m for marketing but that $450m "might be" was a quick shot and I'll have here a better breakdown that makes it closer to $500m to be conservative. I haven't seen the exact numbers for the marketing but only reporting that together with a production budget it would be $330m which implies $110m marketing budget but as I'd calculate it higher.

 

You can't just count box office revenue for a breakeven point. Studios make overall revenue estimates for it and count all revenue streams for it. There are rules of thumb like box office provides 60% of all revenue and the rest 40% (I'd push back on using this) or to breakeven you need to make 2x in box office compared to the production budget (2.2x nowadays might be close to the truth). I try to open the breakdown further as much as possible with open-source information. There is much nuanced contractual information that affects these but when I've used this method and compared the results with actual announced profit numbers by studios it seems to show pretty well the ballpark. That said, studios have tailored expectations of how much they expect to get over the breakeven point and it has its own factors which I little bit explained when doing this type of breakdown with TLM some days ago.

 

Here's my updated Flash breakeven estimate:

 

Scenario for the $500m WW breakeven point:

 

BO revenue: $210m DOM * 55% + $270m OS * 40% + $30m * 25% China = $231m

TV & related rights/licensing fees: $130m

Home Entertainment revenue (DVD, BR, etc.): $90m

UK production repays: $50m

Other (e.g. merch): $35m

 

Total revenue: $536m

 

Production budget: $220m reported + 10% typical overruns = $242m

Marketing budget: $130m

Prints: $15m

Home entertainment marketing: $20m

Manufacturing (DVD, BR): $20m

Participation & residuals (crew, cast & key people income share): $45m

Studio overhead: $20m

Capital expenses & misc. (loans, capital interests, etc.): $40m (partly accounting method to discount the future tail revenue as present value)

 

Total costs: $532m

 

The home entertainment and merch in this case as in TLM are big variables but I'd say Flash has a good chance to have a breakeven point around $475-500m WW box office-wise. With $600m WW it could make a profit of around $65-75m ballpark. With $650m it could make similar profits than GOTG3 makes with $850m WW unless it got good incentives from Georgia which might be the case...

In any case, Mario and AtSV are still this year's clear profit kings.

[von Kenni]

2 hours ago, 21C said:

That wouldn't be taking into account the marketing budget though. THR didn't give an exact number, but it did say it's considerably high. So even if The Flash's budget got reduced to 170 million or something like that, let's say a 130 million marketing budget, which makes the whole thing have a total cost of 300 million.

Even if we were to assume this reaches 300 domestic, and then 300 internationally...

300 * 50 (DOM) = 150
300 * 40 (INT) = 120

270 in revenue. Still doesn't break even. I'm a bit weirded out by the math in your other post as well; I reaaally don't think one should include home sales when it comes to talking about "breaking even" in a theatrical run; it's the same trick that the Deadline Black Adam article pulled and I think it's a bit disingenous. 

 

Without doing due diligence on Black Adam, at face value it lost $50m-70m probably. It likely had bad overall home entertainment sales and non-existent merch/other revenue and also smaller TV/broadcasting rights income. Though need to check those possible Georgia incentives... and google next that Deadline article

 

...I checked the Deadline article on Black Adam and I'd say it's misleading, has some nice accounting face value but also most likely overestimated future home entertainment and rights sales by $50m or more and even if you count HBO Max's internal billing it bombed there which bites back to WB. Also skeptical about the last cost item's size and the overall production budget + P&A. And then starting to do some present value calculations which I take into account in my model. It made most likely a loss but how much is another question.

 

https://deadline.com/2022/12/dwayne-johnson-black-adam-box-office-profit-1235191135/

 

Edited June 10, 2023 by von Kenni
Adding the Deadline story...

[21C]

53 minutes ago, von Kenni said:

 

I  calculated exactly $130m for marketing but that $450m "might be" was a quick shot and I'll have here a better breakdown that makes it closer to $500m to be conservative. I haven't seen the exact numbers for the marketing but only reporting that together with a production budget it would be $330m which implies $110m marketing budget but as I'd calculate it higher.

 

You can't just count box office revenue for a breakeven point. Studios make overall revenue estimates for it and count all revenue streams for it. There are rules of thumb like box office provides 60% of all revenue and the rest 40% (I'd push back on using this) or to breakeven you need to make 2x in box office compared to the production budget (2.2x nowadays might be close to the truth). I try to open the breakdown further as much as possible with open-source information. There is much nuanced contractual information that affects these but when I've used this method and compared the results with actual announced profit numbers by studios it seems to show pretty well the ballpark. That said, studios have tailored expectations of how much they expect to get over the breakeven point and it has its own factors which I little bit explained when doing this type of breakdown with TLM some days ago.

 

Here's my updated Flash breakeven estimate:

 

Scenario for the $500m WW breakeven point:

 

BO revenue: $210m DOM * 55% + $270m OS * 40% + $30m * 25% China = $231m

TV & related rights/licensing fees: $130m

Home Entertainment revenue (DVD, BR, etc.): $90m

UK production repays: $50m

Other (e.g. merch): $35m

 

Total revenue: $536m

 

Production budget: $220m reported + 10% typical overruns = $242m

Marketing budget: $130m

Prints: $15m

Home entertainment marketing: $20m

Manufacturing (DVD, BR): $20m

Participation & residuals (crew, cast & key people income share): $45m

Studio overhead: $20m

Capital expenses & misc. (loans, capital interests, etc.): $40m (partly accounting method to discount the future tail revenue as present value)

 

Total costs: $532m

 

The home entertainment and merch in this case as in TLM are big variables but I'd say Flash has a good chance to have a breakeven point around $475-500m WW box office-wise. With $600m WW it could make a profit of around $65-75m ballpark. With $650m it could make similar profits than GOTG3 makes with $850m WW unless it got good incentives from Georgia which might be the case...

In any case, Mario and AtSV are still this year's clear profit kings.

Here's my extremely rough estimates on a break-even scenarios for The Flash, as I'm still not convinced by your analysis.
Some caveats:
-I'm assuming studio is getting 55% of domestic gross (Which might be a bit generous)
-I'm assuming studio is getting 40% of international gross.
-I'm using the exact same expenses and potential home entertainment/streaming/television numbers as reported in Deadline for The Batman. (The Batman also shot in the UK so it's comparable, and I feel that Deadline would've accounted for any tax incentives in the budget as they're typically extremely lenient when it comes to studio finances. Feel that assuming that this film has the same production + marketing budget as The Batman is a bit generous too, but whatever)
-I know that assuming that domestic and international are gonna be exactly 50/50 is dumb, however I found that useful just for this exercise. 
-I'm only using 50% of the reported Television/Streaming thing as the full figure accounts for the amount WBD would pay itself to put it on MAX; we don't know how much the full amount of it would be but I'll just assume it's at least 75 million so I'm not counting that.

JUST THEATRICAL

 

Domestic Box Office	445.2631579
International Box Office	445.2631579
Worldwide Box Office	890.5263158
REVENUES
Theatrical Domestic	244.8947368
Theatrical International	178.1052632
Total Revenues	423
Expenses
Production Costs	200
Prints and Ads	135
Residuals	27
Interest and Overhead	36
Participations	25
Total Expenses	423
Studio Net	0

WITH STREAMING/HOME VIDEO

Domestic Box Office	266.315789
International Box Office	266.315789
Worldwide Box Office	532.631579
REVENUES
Theatrical Domestic	146.473684
Theatrical International	106.526316
Home Entertainment	130
Television/Streaming	75
Total Revenues	458
Expenses
Production Costs	200
Prints and Ads	135
Video Costs	35
Residuals	27
Interest and Overhead	36
Participations	25
Total Expenses	458
Studio Net	0

So the film needs around 530 to break even as a whole, and 800+ to break even just theatrically.

Source on Deadline's The Batman breakdown: ‘The Batman’ Box Office Numbers: Film Earns $177M In Profit – Deadline

 

 

 

Edited June 10, 2023 by 21C

[von Kenni]

22 minutes ago, 21C said:

Here's my extremely rough estimates on a break-even scenarios for The Flash, as I'm still not convinced by your analysis.
Some caveats:
-I'm assuming studio is getting 55% of domestic gross (Which might be a bit generous)
-I'm assuming studio is getting 40% of international gross.
-I'm using the exact same expenses and potential home entertainment/streaming/television numbers as reported in Deadline for The Batman. (The Batman also shot in the UK so it's comparable, and I feel that Deadline would've accounted for any tax incentives in the budget as they're typically extremely lenient when it comes to studio finances. Feel that assuming that this film has the same production + marketing budget as The Batman is a bit generous too, but whatever)
-I know that assuming that domestic and international are gonna be exactly 50/50 is dumb, however I found that useful just for this exercise. 
-I'm only using 50% of the reported Television/Streaming thing as the full figure accounts for the amount WBD would pay itself to put it on MAX; we don't know how much the full amount of it would be but I'll just assume it's at least 75 million so I'm not counting that.

JUST THEATRICAL

 

Domestic Box Office	445.2631579
International Box Office	445.2631579
Worldwide Box Office	890.5263158
REVENUES
Theatrical Domestic	244.8947368
Theatrical International	178.1052632
Total Revenues	423
Expenses
Production Costs	200
Prints and Ads	135
Residuals	27
Interest and Overhead	36
Participations	25
Total Expenses	423
Studio Net	0

WITH STREAMING/HOME VIDEO

Domestic Box Office	266.315789
International Box Office	266.315789
Worldwide Box Office	532.631579
REVENUES
Theatrical Domestic	146.473684
Theatrical International	106.526316
Home Entertainment	130
Television/Streaming	75
Total Revenues	458
Expenses
Production Costs	200
Prints and Ads	135
Video Costs	35
Residuals	27
Interest and Overhead	36
Participations	25
Total Expenses	458
Studio Net	0

So the film needs around 530 to break even as a whole, and 800+ to break even just theatrically.

Source on Deadline's The Batman breakdown: ‘The Batman’ Box Office Numbers: Film Earns $177M In Profit – Deadline

 

 

 

 

Thanks for taking a deeper shot and sharing The Batman link too. I could nitpick and argue with some numbers but I think all that is covered in my take. Though for the incentive, those UK incentives should be marked separately since they are direct payments of the total expenditures under the UK entity like Quantumania which reported $194m in line with the reported budget costs and got exactly that 25% repay from the government. But otherwise, thanks for taking the time to do your estimate. I got between $475-500m in my estimate and you $530m. I think those are more fruitful ways to evaluate a film's profitability as it's the way studios also use and not expecting just the box office revenue to deliver the needed money to cover costs.

[SpiderByte]

The possibility that this opens under Rise of the Beasts...

[Johnny Tran]

$890M is definitely not the break even point Lol.  

[XXR vs XXR]

9 minutes ago, SpiderByte said:

The possibility that this opens under Rise of the Beasts...

 

It's a fairly low possibility. Should do something in the $70-85M range.

[Mulder]

11 minutes ago, SpiderByte said:

The possibility that this opens under Rise of the Beasts...

Rise is only doing in the high 50s. While there's a super slim possibility Flash does that bad, it's looking at the absolute worst to be in the 60s at least. So this feels borderline impossible honestly.

[BigBoxOfficeBucks]

Now that the cat is out of the bag and the hype around this movie has kind of died down. I think we can have a better grasp of its box office performance and make a much more realistic prediction. 

The chance of making over-100 OW is basically slim to zero. I will give it 80m. I absolutely have no idea about the word of mouth after the RT score dropped. The multiplier is probably 2.8 and makes the DOM total 224m.

The Flash ,just as the DCEU, is a brand that is favored more by the North America audience. The INT total should be a bit less than the DOM. 

So, all in all,  DOM+INT = 224 +200 =424m

Given than WB spends so much on the marketing, will this be another bomb? My fellow box office junkies, thoughts?  

 

[XXR vs XXR]

4 minutes ago, BigBoxOfficeBucks said:

So, all in all,  DOM+INT = 224 +200 =424m

 

My current prediction is 450-550 WW. It seems like the film is being well received which is what matters the most. Whether this is a "bomb" or not isn't that relevant since they're rebooting the DC universe after AM2.