Thursday, November 09, 2006

That's Some Funny Math There, WB

Just wanted to bring to your attention a great article put up on Dave Poland's always entertaining Hot Blog that takes a look at the financials for Singerman and just how WB may fudge the numbers in their favor in order to avoid the rath of their shareholders. That's the magic of accounting. If you know what you're doing you can make profits appear and disappear when it's convenient for you.

I was reading a Merrill Lynch study on equity funding of movies. And it finally occurred to me how Warner Bros could claim profitabilityfor Superman Returns without getting sued by Time-Warnerstockholders.
Superman Returns grosses $392 million worldwide. That’s
roughly $210 million in rentals.
WB takes roughly $130 million in worldwide
P&A and another $55 million in distribution off the top. That leaves $25
million for distribution toward participations and production.Ancillaries on
this movie look to be (generously) about $175 million net. That’s $200 million
.
WB takes half of that, $100 million… plus roughly $55 million in distribution
fees…
equals $155 million. Why, that would be a $5 million profit! And if you
accept WB’s acknowledged cost on the picture of $210 million, you’d be looking
at… taa dah!!!... a $50 million profit, as they claimed in the NY
Times.

Of course, you have to overlook the $60 million in failed development costs… also acknowledged by WB. And the $30 million or $40 million in additional production costs that are generally acknowledged inside the non-publicity side of the studio as real. And my figure of $130 for worldwide publicity is generous, especially considering the long push to crack $200 million domestic (it happened last week) and the big money spent on weeks two and three and four of the domestic run. And any participants who might have gotten paid (did Bryan Singer have gross points?) are not offered here. But studios are good at hiding costs when they so wish, just as they are good at hiding profits when they so wish.


Interesting. When you look at a film like that and add back things like distribution fees you can really enhance the look of the film's bottomline. But how much of that money does the studio actually ever really see?


Best of all, by this accounting method, Legendary Pictures took an
only-in-for-$105- million hit of $5 million and an it’s-really-$150-million hit
of $50 million.
In looking towards a second Singer Superman, there is the
obvious advantage of not carrying the load of failed development costs. And
keeping Singer to a $150 million budget is possible. But
Variety’s
story on the idea of this sequel
says that a financing partner is key for WB
to movie forward. Why, if the first film was allegedly profitable?


Yeah, I've been asking the same thing. If the film would've been profitable whether or not WB split the $200 million in revenue ($25M from theaters plus $175M in ancillaries) with those distribution fees added back, why DOES the financing partner matter???


Well, as you see, WB gets to triple dip, while an equity partner has only one
shot at breaking even or profiting. Recovered marketing costs also pay for
permanent WB staff on the picture. Distribution returns are mostly profit
. So if
Superman Returns Again did 20% less at the box office ($400 million is nothing
to sneeze at), the dollar flow looks like...
Production cost: $150 million

Total net: $310 million (on $315 million worldwide gross)
WB P&A - $120 million
WB Distribution – $40 million
WB Production - $75 million
Partner Production - $75 million

In other words, a breakeven movie, with $40 million in profit for WB, using this year’s SR calculation. And nothing for a partner. (Again, this is without profit participation.)


Yeah, I know that's enough to make your head spin, and there's even more figures on the blog page that details other scenarios for a sequel, but the point is pretty clear how you can make it look a lot better than it actually was.

The betting is that Superman Returns gets more love on DVD than it did in
theaters and that it is stronger going into another film, plus the idea that
Singer makes the movie that people really wanted to see the last time.
That said, Batman Returns was down 10% from Batman and Spider-Man II was off 7% from
Spider-Man.
Realistically, what will make the “deal with Singer” into an actual movie? It could be DVD revenues. Everyone involved will be waiting to see how SR sells on DVD. The margin for financial safety on another film in the series is that thin. And of course, this all becomes moot if the next film soars. And so it goes…

So like we said last week, even though Singer is "signed" to some form of a contract to do a sequel, just how and in what form that materializes will be dependent on what happens in the home video market and just what kind of profit margin goes on the books after that.

22 comments:

Anonymous said...

"but the point is pretty clear hwo you can make it look a lot better than it actually was."

You need to start proofreading better, GEEZ don't you have spell-check.

Anonymous said...

"You need to start proofreading better, GEEZ don't you have spell-check."

Oh, now this is RICH. The "Apologists" mis-spell things, and you are "lame" for pointing it out. The Blog-owner mis-spells ONE word, and he gets attacked? You fucking hypocrites are a SAD lot.

And questions usually end with a QUESTION MARK, you fucking idiot.

Anonymous said...

"Oh, now this is RICH. The "Apologists" mis-spell things, and you are "lame" for pointing it out. The Blog-owner mis-spells ONE word, and he gets attacked? You fucking hypocrites are a SAD lot."

No what is sad is a guy running an internet blog trying to come off as credible and misspelling shit. How many times do you see typos in a newspaper article you fucking retard?

Anonymous said...

"No what is sad is a guy running an internet blog trying to come off as credible and misspelling shit. How many times do you see typos in a newspaper article you fucking retard?'

More often than you think, you fucking dipshit.

At least spell your OWN shit right, before trying to bash someone else you walking abortion.

Anonymous said...

"No what is sad is a guy running an internet blog trying to come off as credible and misspelling shit. How many times do you see typos in a newspaper article you fucking retard?'

More often than you think, you fucking dipshit.

At least spell your OWN shit right, before trying to bash someone else you walking abortion."

Oh I’m sorry you must be in the process of sucking on SSS's cock right now. Either that or you are him. Hey boss look here is my article I misspelled a word but it is okay to publish right, get a clue Nazi.

Anonymous said...

"Oh I’m sorry you must be in the process of sucking on SSS's cock right now. Either that or you are him. Hey boss look here is my article I misspelled a word but it is okay to publish right, get a clue Nazi."

Nazi? How fucking pathetic is that? Way to prove what a fucking waste you are, you cum-stain.

And the ONLY cock-sucking going on is your mom on me. That snaggle-toothed whore REEKS at it though. It's ok, gives me an excuse to punch her in that ugly-ass face.

Anonymous said...

I tell you the intelligence level on this blog is astounding, we got dumb and dumber arguing here.

Anonymous said...

Why the hell can't anyone stay on topic on this blog anymore.

Anonymous said...

WB you fucks, listen to me. Take a break from Superman.

Don't follow this Donner fanboy into re-making donner's movies. If Singer says he wants zod, tell him to fuck off and read a comic once in his life. Please.

Anonymous said...

There is no way Singer is doing Zod, i do think he would get fired if he pushed for that villain. WB has to know they need a brand new Supervillain like Darkside or Brainiac for the movie to have any chance at being a hit.

Anonymous said...

Oh shut it. You sound like those dip shit apologists saying "There's no way Singer will give Superman a kid."

It's more than fucking obvious Singer DOESN'T GIVE A FUCK and will screw superman up as much as he pleases.

Anonymous said...

By WB even bringing this Moron back to supposedly direct another lame Superman film tells me they don't give a fuck either.

And judging by the ratio of shitty comicbook movies to good ones they've ever made, I know exactly what to expect from them.

To even think they give one shiny golden fuck about pleasing comic fans or even Superman fans, is laughable.

Anonymous said...

"I tell you the intelligence level on this blog is astounding, we got dumb and dumber arguing here."

Says the stupid cunt who added NOTHING resembling an intelligent statement.

Shut the fuck up, you whiney bitch.

Anonymous said...

"Oh shut it. You sound like those dip shit apologists saying "There's no way Singer will give Superman a kid."

It's more than fucking obvious Singer DOESN'T GIVE A FUCK and will screw superman up as much as he pleases."



You don't pay attention much do you. First off i did not like SR second off. If you have been paying attention you would know 2 things. 1, Singer had free reign to do whatever the fuck he wanted in SR and it did not work out. 2nd if and it is still a big IF he does the sequel he will have a short leash and not the right to do any movie he pleases. WB is not going to hand him another kings ransom so he can fuck it up and they can get back a lousy BO. He took a shitload of heat for making SR too much like the Donner films, which is why i say no way WB allows him to do Zod in the sequel and i think he would be fired if he tried.

Anonymous said...

OK THEN. Fuck. Sorry, but I'm just jaded from all this talk of doing a sequel to this crap.

Anonymous said...

"OK THEN. Fuck. Sorry, but I'm just jaded from all this talk of doing a sequel to this crap."

Hey i was pissed at SR, i did not hate all of it but most of it. I hope we get a great sequel because as a fan of Superman i really want a great Superman movie. Singer did a good job on X2 and i hated the original X-Men, maybe he can make a great sequel. If he can't then WB needs to fire him early on in the process and get in someone else to make a good Superman movie.

Anonymous said...

Me again, yes that's agreeable. I'm for hiring a new director to actually read the comic and do superman justice, but that's not seeming like it'll happen. I'm sorry I can't be the least optimistic for the sequel. Lower budget, same director. i don't think I should expect a brand new better everything, but more of the same plus an attempt to deliver more action with bombastic music in the background.

I felt x-men was good because Singer had respect for the comic. This time it's totally different and i doubt he'll change gears. I just don't see any hope left for superman.

Anonymous said...

"I felt x-men was good because Singer had respect for the comic. This time it's totally different and i doubt he'll change gears. I just don't see any hope left for superman."

Funny thing is Donner was not overly loyal to the comics either. I mean Superman 2 went way beyond anything in the comics with Lois and Superman with him giving up his powers. Yes he still does give up his powers in the Donner cut of the film. I just think Donner got Superman better from an entertainment persective than Singer seems to.

Anonymous said...

Okay, I'm just another anonymous guy who hasn't posted a comment yet, but I see howling grammatical and spelling mistakes in newspapers, magazines, professional news websites, you name it. One guy making one mistake on one day doesn't make him stupid. Frankly, I'd be more concerned about Mr. SSS if he was fawning all over Singerman, which obviously isn't happening.

Everybody, just chill.

Anonymous said...

I've waited 30 years for a new superman and all I got was an old one.

Anonymous said...

"I've waited 30 years for a new superman and all I got was an old one."

Actually you only waited 19 years.

Anonymous said...

Oh yeah that made me feel a lot better.