Superman Returns The Business of Superman Returns

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How Superman “Made Money”

http://www.mcnblogs.com/thehotblog/archives/2006/11/how_superman_ma.html
http://www.slashfilm.com/article.php/20061105221450505

I was reading a Merrill Lynch study on equity funding of movies. And it finally occurred to me how Warner Bros could claim profitability for Superman Returns without getting sued by Time-Warner stockholders.
Here is the chart... Click here to see it
And here is the math...

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.
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?
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 is 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.)
If SuperSinger II did the same business as the first, assuming costs are stable, you’re looking at:
Production cost: $150 million
Total net: $385 million (on $390 million worldwide gross)
WB P&A - $120 million
WB Distribution – $55 million
WB Production - $105 million
Partner Production - $105 million
That would be an $85 million profit for WB and a $30 million profit for a partner.

However… if the film ends up at $200 million cost and the same gross as this one…
Total net: $385 million (on $390 million worldwide gross)
WB P&A - $120 million
WB Distribution – $55 million
WB Production - $105 million
Partner Production - $105 million
$60 million profit for WB and $5 million profit for partner… on a $100 million investment. And if the film grossed less than SR… another loss for the investor.

Now, recent history has been of sequels going up, not down. But then again, the only sequels coming out of a major franchise picture that was this soft at the box office was X-Men. And obviously, that has worked out. The sequel to Singer’s first film did about a third better that the original. On the other hand… X-Men was well liked and the film audience expanded on DVD… the sequel had a great release date, especially compared to the original... and that sequel did about as much as SR did this time.

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…
 
Why are people still debating this BS?
Do you think that people at Warner are stupid? Do you think that Poseidon was really a loss of money for Warner?
These kind of movies break even before being released, thanks to pre-sales to televisions.
The ancillaries that this guy has at 175 million $ are far from the reality of things.
 
Antonello Blueberry said:
Why are people still debating this BS?
Do you think that people at Warner are stupid? Do you think that Poseidon was really a loss of money for Warner?
These kind of movies break even before being released, thanks to pre-sales to televisions.
The ancillaries that this guy has at 175 million $ are far from the reality of things.

Not sure if you are addressing me or it's just a rhetorical, but I just thought it was an interesting read, not that it was factual. I know alot of people on these boards love to debate this so I thought it was a jumping point.
 

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