Economics of the MCU

[jmc]

Studios make most of their money off of merchandising and home media sales these days anyway.

To put it in perspective Pixar made something like 5 billion a year on merchandising for Cars yet the film only made something like 500 million at the box office. Kinda puts the box office in a different light.

 

[jmc]

I will give credit to RDJ for going into bat for the other cast members, those guys were low balled and frankly deserve a huge pay raise for their services. Good to see that RDJ has their back because frankly he's the only one with power.

 

[Mr. Dent]

To put it in perspective Pixar made something like 5 billion a year on merchandising for Cars yet the film only made something like 500 million at the box office. Kinda puts the box office in a different light.

To put it more into perspective, Marvel made 6 billion off of merchandising in 2011...that's right, BEFORE the Avengers.

http://adage.com/article/media/avengers-bulking-6-billion-marvel-licensing-machine/234572/

I can only imagine how much they made in merchandising last year and what they stand to make this year.

And in 2010 they generated $5.6 billion from merchandising, and $4.9b the year before that.

http://www.thewrap.com/media/article/report-disney-made-286b-2010-licensed-merchandise-27526

With Avengers and TASM having come out last year, I have to imagine Marvel generated around $8-10 billion in merchandising in 2012.

 

[Bruce Malone]

The issue with downey and Iron Man is unlike other past actors who've played comic or iconic role, he literally defined the character for the audience.

I don't think anyone can even think of Iron Man without picturing RDJ, since the character at least on film was molded to fit his specific personality. I actually think the actor taking over for ledger as joker in a future film would have less pressure on him than an actor trying to take over for downey.

So he's pretty much got marvel by the pocket book assuming they want him to continue on.

 

[blalex620]

The issue with downey and Iron Man is unlike other past actors who've played comic or iconic role, he literally defined the character for the audience.

I don't think anyone can even think of Iron Man without picturing RDJ, since the character at least on film was molded to fit his specific personality. I actually think the actor taking over for ledger as joker in a future film would have less pressure on him than an actor trying to take over for downey.

So he's pretty much got marvel by the pocket book assuming they want him to continue on.

The character wasn't molded after him. He did add some quirks to the character that are distinctly him but Tony Stark has always been somewhat of an arrogant, narcissist, playboy. The one thing I can say RDJ brought was his style of humor and even then the runs on Stark in the earlier 2000s were making him funnier. I think RDJ is like Sean Connery. Everyone thought Connery was Bond and no one could play the character like him yet, there have been numerous actors who've played Bond just as well i.e. Daniel Craig. Stark can be portrayed by other actors because the character has existed before and will continue to exist after RDJ. He will just be the staple that every actor after him is compared to like Connery and Bond.

 

[jmc]

^ I know the Connery thing gets brought up but Connery leaving did have an adverse affect on Bond. George Lazenby's one and only run as Bond was more or less a disaster, it didn't flop by any means, but it remains the worst performing Bond film of all time, this in spite of the fact it's regarded as one of the best films in the series. When Connery did return he really wasn't committed to the film. Essentially the character was quasi-rebooted with Roger Moore even though it was technically the same continuity. Moore played Bond differently, the tone of the series changed, hell they even changed his favourite drink for a couple of movies, it took a few attempts to steer Bond back on coarse, plus he was essentially the only movie franchise at the time and had little competition so MGM could afford to have the occasional misfire because the film would be a hit regardless. In fact Bond has always had a quasi-reboot every time a new actor has taken over, it just wasn't until Casino Royale that is was officially rebooted. The thing with RDJ is that he is more comparable to Chris Reeve rather than Connery, he became so synonymous with the character that he essentially helped define the character. Look what happened with Superman Returns. It's not that Brandon Routh was bad, it's just he wasn't given the chance to do Superman his way because of the continuity his character was in, he was essentially playing his version of Chris Reeve's Superman. RDJ is in the same boat - he is to Iron Man what Chris Reeve was to Superman, to a lot of people they are the character.

 

[blalex620]

^ I know the Connery thing gets brought up but Connery leaving did have an adverse affect on Bond. George Lazenby's one and only run as Bond was more or less a disaster, it didn't flop by any means, but it remains the worst performing Bond film of all time, this in spite of the fact it's regarded as one of the best films in the series. When Connery did return he really wasn't committed to the film. Essentially the character was quasi-rebooted with Roger Moore even though it was technically the same continuity. Moore played Bond differently, the tone of the series changed, hell they even changed his favourite drink for a couple of movies, it took a few attempts to steer Bond back on coarse, plus he was essentially the only movie franchise at the time and had little competition so MGM could afford to have the occasional misfire because the film would be a hit regardless. In fact Bond has always had a quasi-reboot every time a new actor has taken over, it just wasn't until Casino Royale that is was officially rebooted. The thing with RDJ is that he is more comparable to Chris Reeve rather than Connery, he became so synonymous with the character that he essentially helped define the character. Look what happened with Superman Returns. It's not that Brandon Routh was bad, it's just he wasn't given the chance to do Superman his way because of the continuity his character was in, he was essentially playing his version of Chris Reeve's Superman. RDJ is in the same boat - he is to Iron Man what Chris Reeve was to Superman, to a lot of people they are the character.

And we'll see how long that holds up when MoS comes out. If what everyone says hasn't just been all hype Cavill will prove that someone new can play the character just as well. However, I do concede that no matter when they recast the role of Stark it will be a hard sell in the beginning.

 

[Bruce Malone]

I'd say RDJ's impact on Iron-Man is even more tham Reeve's on supermans, because he made the character.

Superman was a pop-culture icon years before reeve took on the role, Iron-Man was essentially seen as a second rate character that the GA probably knew less about than aquaman.

RDJ's performance made the Iron-Man the Iron-Man we now know. I've actually thought he's one of the few comic characters that's worked better actually as a movie character than a comic one. When people saw Iron-Man 1 they wanted to see RDJ as a super-hero more so than to see Iron-Man. As opposed to the 1st superman where everybody wanted to see superman and had no idea who reeve was really.

 

[Silvermoth]

Gee some of those paycheques are nuts though. $50 million for a couple of months work and you want MORE!?!? Are you aware how many people out there now are desperate for work just for the basic costs of living?

This problem can only get worse really unless something is done. Otherwise everyone will be asking for $80 million for Avengers 3!

It's a shame the cast didn't follow the model of the original Star Trek series where they were quite happy to work together and do movies and television shows for decades because they were having fun. Completely different I know but it's just a shame that's all.

 

[blalex620]

I wouldn't say that it's outrageous at all. This is their job. They are getting paid for this. In this industry there's a respectable reasoning that if the movie is making more then the actors should be fairly compensated. Disney can strong-arm the movie theatres to get more money because they know their movies will make the big bucks so why shouldn't the actors do the same? I mean they are doing arguably the biggest part of the work. Without actors we would have nothing.

 

[Lightsplasher]

Gee some of those paycheques are nuts though. $50 million for a couple of months work and you want MORE!?!? Are you aware how many people out there now are desperate for work just for the basic costs of living?

This problem can only get worse really unless something is done. Otherwise everyone will be asking for $80 million for Avengers 3!

I totally agree ! But IMO , both sides are right . I mean like why RDJ's bonus ain't reduced so every actor gets his fair piece of the cake . Like this :
5$ millions dollars wow: Wow all that money !!) for each actor in bonus and no other "special" bonus for RDJ

But that's not all. IMO , I think this whole "Marvel-cheap-thing" is also a little bit because of Perlmutter (Boss of Marvel Entertainment) .

Whatever , here's a link to a translated French Blog's post (a blog about CBMs and other blockbusters movie) which explain a lot of things .

 

[jmc]

And we'll see how long that holds up when MoS comes out. If what everyone says hasn't just been all hype Cavill will prove that someone new can play the character just as well. However, I do concede that no matter when they recast the role of Stark it will be a hard sell in the beginning.

Cavil is in a better position because this is a new Superman with no ties to the previous films. Routh was hand cuffed because Singer made in hindsight the wrong decision to use the Donnerverse as a base for his film. This is why rebooting is the new fad, because it eliminates the issues of having to sell a new lead actor playing the same character from the previous film in the series, it's easier just to start from scratch.

 

[jmc]

Gee some of those paycheques are nuts though. $50 million for a couple of months work and you want MORE!?!? Are you aware how many people out there now are desperate for work just for the basic costs of living?

This problem can only get worse really unless something is done. Otherwise everyone will be asking for $80 million for Avengers 3!

It's a shame the cast didn't follow the model of the original Star Trek series where they were quite happy to work together and do movies and television shows for decades because they were having fun. Completely different I know but it's just a shame that's all.

Eh, that's not quite 100% true, Shatner mentioned in his autobiography that most of the cast actually didn't like working with him, he just didn't know it for decades.

 

[Zarex]

Gee some of those paycheques are nuts though. $50 million for a couple of months work and you want MORE!?!? Are you aware how many people out there now are desperate for work just for the basic costs of living?

This problem can only get worse really unless something is done. Otherwise everyone will be asking for $80 million for Avengers 3!

It's a shame the cast didn't follow the model of the original Star Trek series where they were quite happy to work together and do movies and television shows for decades because they were having fun. Completely different I know but it's just a shame that's all.

I would prefer not to hear how the "sausage" is made, and enjoy the remainder of Phase II. But the cast members have every right to ask for a bigger slice of the Avengers 2 box office take. The profits are going somewhere, and since most actors, like athletes, have a very short window in which they have major earning potential, the cast has to strike while the iron is hot.

I don't think the Star Trek cast is a very apt comparison. Shatner and Nimoy were the only original cast members that had directing and acting opportunities outside of the Star Trek Universe. All of the Avengers cast members have had success outside of the MCU.

 

[Mr.M]

This is really nothing new. Feige has been pretty resolute over the years. He will not **** around with people that can be replaced in a nanosecond. They will try to sign you on the cheap and lock you into multiple pictures. They also don't break the bank on big directors and rivaling egos. I think Feige and Whedon have a healthy working relationship so I wouldn't be too worried about those two falling out, but who knows if Whedon will be back for A3 and beyond.

I think RDJ is probably going to have to distribute some of the wealth. You can't give everyone a backend deal plus money up front. Doesn't work that way. But if I were RDJ, I'd consider taking a small pay cut if I was serious about helping out my fellow colleagues. He's not obligated to, but he is negotiating a brand new deal so appropriate adjustments can be made. Otherwise, if he really wasn't happy with Marvel's treatment of their employees, he should price himself out and force Marvel to recast. I would distribute the money as such:

RDJ: 60 million for A2-3 plus +1% of WW BO for every billion
Hemsworth: 15-20 million for A2-3
Evans: 10-15 million for A2-3
ScarJo: 17-20 million for A2-3
Renner: 5-7 million for A2-3
Ruffalo: 8-10 million for A2-3

All the deals should have bonuses for BO performance, but I don't think anyone else should be given a % or backend deal with the exception of RDJ.

 

[jmc]

If that's his attitude then it will come back to bite him in the arse. Marvel can't cry poor anymore, they've got Disney behind them now.

 

[catintheengine]

Marvel needs to just pay up. 10 years ago, they weren't even a studio, and now they're one of the biggest operations in Hollywood. They can't seriously believe that the cast that they've put together doesn't play a part in that.

They've found the chemistry for continued success - don't mess with that. Make the cast happy, lock them down for A2 and A3, and then just let that play itself out. Marvel will make the money back.

Seems right now that everyone involved is in a pissing contest. While Feige might believe he has the upper-hand (or he is bluffing), he doesn't. Not really anyway. They really need to play this smart.

But, I agree with others on these forums; The MCU can carry on, but The Avengers needs to wrap up after the third movie. Wrap it all up in a nice package and let it endure.

By then they will be able to lead into the other franchises: Daredevil, Heroes for Hire, Doctor Strange, a new Blade, a new Ghost Rider.

Speaking on those last three: Perhaps we could even, eventually, see a Marvel Dark film? Something dealing with the dark mystical arts and those three heroes teaming up to deal with it?

 

[Spider-Fan]

It's Hollywood. Contract negotiations are long, hard, and polarizing. This isn't uncommon for any studio. Like most contract negotiations, I expect a certain level of heat with a compromise at the end. Likely, Marvel will start offering them more back-end money for these films, which will effectively give them their raises.

I think Marvel will be able to manage the solo trilogies plus A2 & A3. They have too much money at stake.

 

[Mrs. Sawyer]

It's Hollywood accounting. It's all ******** and loopholes. Gotta love it

Harry Potter 5 lost WB $167M
http://www.slashfilm.com/insane-stu...er-harry-potter-and-the-order-of-the-phoenix/

Pretty much. There are plenty of ways a studio cheats with accounting, especially considering how much bigger the international market is, and how much merchandising money a brand like Marvel makes.

Some of the things Marvel probably could have alreayd done:

- Delayed declaration of revenues (waiting for complete international numbers to come in or profits from another revenue stream). This goes hand in hand with:

- Cross-Collateralization - Charging loses from one revenue stream against profits from another:

Let's say Marvel has one revenue stream, like Novelizations that aren't doing so well. They could charge the losses against that or another business venture that is associated with the movie against profits from that revenue stream, making it look like they have less money than they really do.

They could also do this with the international box office with the Avengers, which they could have done to produce that $1.1 billion tag. They could charge loses in other ventures with the Avengers and added that to the budget for The Avengers because it's all branded under Avengers. In addition, they could wait to reveal certain revenue streams.

Don't fully take my word on it though. My film business side is pretty rusty.

 

[Mrs. Sawyer]

It's Hollywood. Contract negotiations are long, hard, and polarizing. This isn't uncommon for any studio. Like most contract negotiations, I expect a certain level of heat with a compromise at the end. Likely, Marvel will start offering them more back-end money for these films, which will effectively give them their raises.

I think Marvel will be able to manage the solo trilogies plus A2 & A3. They have too much money at stake.

It's probably going to be back-end money. I guess the big deal sticking point in negotiations is whether it will be gross money (getting some of box office money no matter what) or profit money (getting money only when the movie has made a profit). My guess is Marvel will be looking to go after the latter, though they may have to give some of them gross money for back end rather than profit.

 

[metaphysician]

I honestly hope that 1.1 billion number is false. Because there is something seriously wrong with the system when u need the combined GDP of a few small countries to break even on a movie production.

Don't worry, I am 100% sure it is. Somebody probably came up with the number themselves after stacking several different misunderstandings on top of each other. Note the "and the CEO hasn't even told the company about it yet" bit. That reeks of conspiracy theorizing.

 

[Spider-Fan]

It's probably going to be back-end money. I guess the big deal sticking point in negotiations is whether it will be gross money (getting some of box office money no matter what) or profit money (getting money only when the movie has made a profit). My guess is Marvel will be looking to go after the latter, though they may have to give some of them gross money for back end rather than profit.

Agreed. This as well as the % number are probably the issues at hand. My guess is they will end up coming up with some kind of percentage paid both on total gross and profit seperately.

 

[jmc]

Don't worry, I am 100% sure it is. Somebody probably came up with the number themselves after stacking several different misunderstandings on top of each other. Note the "and the CEO hasn't even told the company about it yet" bit. That reeks of conspiracy theorizing.

Why would somebody make that up?

 

[blalex620]

If the 1.1b number is true it probably comes from the extreme marketing of the film. Marketing tends to break the pockets of many industries not just the film industry.

 

[jmc]

I was always under the assumption the general rule of thumb is box office return of 2 1/2 x production cost = break even.