WB/Legendary Still Showing their Poker Faces

"Everything is going excellent, we have no weaknesses, endless sequels and virgins will be ours, the comic-reading infidels will be crushed!"

As Vincent Chase learned recently on Entourage, people in the business of Hollywood, often say one thing and do another, and never EVER admit to anything that doesn't put them in the best possible light. We've heard the rhetoric from Lord Singer, Alan Horn, Jeff Robinov, and now the people that co-financed Singerman, Legendary Pictures, are joining the "everything is a-okay" fray. In a recent Variety article, the trade paper speculates:

"If Legendary is unnerved, it isn't showing. Like Warners, Legendary insists it will turn a profit on "Superman Returns," and has given all indications that it's on deck to co-finance a sequel."

Some comic movie sites around the web seem to be putting a lot of stock in this statement, that it's the smoking gun for a sequel. However, they're not taking into account that Legendary is on the hook for half the cost of Singerman like WB, which makes this just as much "fluff" as WB's earlier comments.

While the film is still in theaters both here (just a few) and abroad, and with the DVD a few months away, they're going to say whatever they can to try and salvage their investment. They're not exactly going to say they're not on board for a sequel right now, it would be counter-productive to say about a project they invested in with the inclination it was going to be a feature film franchise. What they do in the boardroom come next year after the film and DVD are nothing but a bad memory, will tell you how they truely feel about things.

And like we said earlier, Singerman in the long run will most likely be "profitable." However, that's a relative term. If your revenue exceeds your costs by $.01, techincally it's "profitable," but the key is just HOW profitable will the film be? Will the profit margin justify a continued investment in this project? These are the decisions made by the money people in Hollywood, not the PR reps and spin meisters.

"Like Legendary, all the funds argue that they won't be made, or broken, by just one pic. By investing in a slate of pics over the course of several years, they're virtually guaranteed a return of 10%."

And I agree with this 100%, its whats called "investment diversification." You cover yourself by having your "eggs" in multiple "baskets." Although I hope for Legendary's sake they haven't been invested in the rest of WB's Summer 2006 slate, because that portfolio would be getting kicked in the teeth right about now. That being said, if you invest in something and it blows up in your face, do you dump money back into another project managed by the same people just because in the end you'll come out 10% ahead? Would the Enron stockholders have invested in Ken Lay's next business venture? I think you know the answer to that. NO! People adjust portfolios all the time, especially if they've made a mistake, they seek to minimize their risk and cut their losses. Don't be surprised if Legendary wants a little more input in any potential sequel discussions.

Dave Poland has an interesing take on all this in his Hot Blog. Ironically enough he finds an interesting analogy in the Tom Cruise/Paramount fiasco:

"Mission:Impossible 3 cost a lot (at least $50 million) less than Superman Returns and made more at the box office and should do similar numbers in Home Entertainment.

Paramount won't re-up thier deal with Cruise/Wagner.

Warner Bros. is claiming that they will make $50 million in Superman Returns

The difference in gross point dollars being paid out is about $40 million.

Who do YOU thnk is lying?

Oh, but wait... it's about jumping on couches and arguing with Matt Lauer. My bad.

Or to put it in Anne Thompson terms... who would you rather have fronting your next $250 million (including P&A) investment, Tom Cruise or Bryan Singer?"

Is Tom Cruise available to direct? At least we'd get something "original."

Singerman blows, yet WB still ruminates a sequel?

Singerman is dropping theaters like prom dresses, yet Warner Bros. is still mulling sequel options?

variety.com
Posted: Sun., Aug. 13, 2006, 6:00am PT

WB mulls 'Superman' redux
Word is studio trying to lock down Singer for a sequel
By Pamela McClintock

Will "Superman Returns" return?

Warner Bros. Pictures execs are mulling whether to go ahead with a planned sequel and ink another deal with director Bryan Singer.

The film is not such a blockbuster that a follow-up is inevitable -- but not such a disappointment that a sequel would be ludicrous. After all, the first "Austin Powers" pic was a modest hit that begat two huge grossers.

Word on the Warners lot is that the studio is trying to lock down a deal with Singer for a sequel.

Many speculate that WB has invested too much time and money to walk away. What's more, the film fuels a number of Time Warner outlets, including homevid, ancillaries and merchandising -- even subsid DC Comics.

Warners and co-financing partner Legendary Pictures have a shot at breaking even (?!!!) on "Superman" once all the revenue streams are accounted for, but it's going to be a long, tough haul.

Warners and Legendary -- which splits all profits with the studio down the middle -- are counting on strong home entertainment sales to make up for slower-than-expected box office. (WB's 2005 "Batman Begins," whose B.O. was comparable to that of "Superman," earned $167 million in DVD sales, according to estimates by Variety sister pub Video Business.) Then there are the various TV windows.

There's no doubt that with Legendary as a partner, Warners has a far easier time justifying big-budget efforts like "Superman." At the same time, Legendary has investors to answer to.

Officially, Warners says it's premature to talk about any sequel, since "Superman" has yet to open in certain key international territories.

Last month at the fanboy gathering Comic-Con in San Diego, Singer enthusiastically predicted the second film would bow in 2009. He promised fans more action, saying he used the first pic to "lay the foundation" for the relaunch of the franchise.

Singer said he'll "go all 'Wrath of Kahn'" on the next installment -- a reference to the fact that Paramount's long-running "Star Trek" film franchise really kicked in with its second installment, which was tighter, faster and better received than the original "Star Trek: The Motion Picture."

Negotiations between Singer and the studio would get delicate if Warners wants to include over-budget penalties. Warners certainly can't wrest control away from a director like Singer, but it can try to make sure the budget stays under a certain level.

Word is that WB and Legendary will want to keep the budget of the next one at $200 million or below, but the studio denies any such cap.

Sequels are generally costlier than the original pics, since they need more action and more special effects to tempt auds. In theory, a "Superman" follow-up could be cheaper, since expensive sets are already built, and some CGI experimentation is out of the way (e.g., how does his cape look when he flies?).

On the other hand, Universal threw in the towel with the Hulk after the first pic in the potential franchise failed to wow.

But is the character too retro? While "Superman Returns" received better notices than nearly all of the other 2006 summer tentpoles, some reviewers questioned whether the superhero is too stolid for modern-day fans, who favor darker, more complicated characters, such as Batman or Spider-Man.

Warners had believed that Superman, because of his good-beats-evil mythology, would appeal to a broader audience than Batman.

WB's "Batman Begins" grossed $203.5 million domestically and $166.5 million overseas. "Superman Returns" could edge past its predecessor. It has grossed $190.5 million in the U.S. and $146.5 million overseas, where it has yet to open in several key territories. Conservative estimates are that the pic will gross at least $170 million overseas, bringing its worldwide total to about $360 million.

But "Superman" was far more expensive than "Batman," whose sequel, "The Dark Knight," was just announced by Warners. Pricetag for "Superman" included a production budget of at least $223 million, offset by $20 million in Australian tax breaks. The P&A budget was well north of $100 million.

There is an added $40 million in previous development costs for earlier aborted attempts to resurrect the superhero. The studio wrote off those costs in previous years.

Top studio execs, along with Legendary, insist they will make money on the pic when all is said and done.

But some have speculated that -- based on box office alone and just counting the production budget -- Warners and Legendary could each be out more than $20 million. Those losses could rise sharply when factoring in marketing costs.

Strong DVD sales could lessen the gap. In it deal with Legendary, Warners also gets a theatrical and home entertainment distribution fee.

In "Superman Returns," the question is posed: Does the world still need Superman?

The answer isn't clear, at least in the real world. But the world -- along with Warners, Legendary and Singer -- may have another chance to find out.

They're mad. MAD, I tell ya! Any company silly enough to think "sequel" and "profit" belong in the same sentence as applied to Singerman must be nuts. Somebody throw them one of those neoprene Singerman costumes before they drown in their own stupidity. We hear they make decent personal flotation devices.

With Great Budget, comes Great Expectations

Hot enough for ya?

Yesterday's L.A. Times has an interesting article that talks about how movies open at the box office and how they fare versus expectations in the industry. In the article, they explain why Singerman is viewed as a large disappointment in the Hollywood community.

"As much as studios say they don't like the expectations game, they play it like political strategists spinning poll numbers behind the scenes. That's because moviegoers often use box-office performance as a filter in deciding which movies to watch. Wall Street also pays close attention to perceived success on an opening weekend.

The Devil Wears Prada" opened to $27.5 million in June, the same weekend the more heavily hyped "Superman Returns" drummed up $52.5 million. The couture comedy was pronounced a surprise hit, but the latest superhero installment was labeled "unspectacular" and "disappointing" in articles.

"Prada," which cost a relatively modest $35 million to produce, was deemed a hit partly because it would yield a juicy return on investment for 20th Century Fox. But it quickly became clear that "Superman Returns," which cost $209 million, wouldn't bring the profit that Warner Bros. was hoping for in reviving the Man of Steel as a franchise.

This article just goes to prove our previous statements that while making $190 million at the US box office is nothing to really sneeze at, except when you spent $209-$260 million to make the film. We expected more from Singerman in quality as well as box office, Warner Bros. sure as heck expected a bigger box office, and obviously the movie industry did as well.