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September 19, 2008

Doing The ParaWorks Math

There are still some movies coming down the pike, but it seems like today is a good day to do that math on DreamAmount/ParaWorks.

DREAMWORKS MOVIES UNDER PARAMOUNT

15 movies in the last 3 years : Dreamgirls, Perfume, Flags of Our Fathers, She's the Man, The Last Kiss, Transformers, Norbit, Sweeney Todd, Blades of Glory, The Heartbreak Kid, Disturbia, Things We Lost in the Fire, Tropic Thunder, The Ruins

Worldwide Theatrical Gross; $1.996 billion
Worldwide Rentals: $1.098 billion

Estimated Post-Theatrical Gross Returns To Par: $950 million

Estimated SS Cut On Transformers: $75 million
Estimated Gross Points Out (Murphy, Depp, Ferrell, Stiller): $25 million

Total Estimated Income To Par: $1.948 billion


DREAMWORKS ANIMATION AT PARAMOUNT

5 movies: Shrek the Third, Over the Hedge, Flushed Away, Bee Movie, Kung Fu Panda

Worldwide Theatrical Gross; $2.219 billion
Worldwide Rentals: $1.220 billion
Total Theatrical Return to Paramount (10% distribution deal):$ 122 million
Estimate Fees To Par For Home Video Distribution: $100 million
Initial Cost of Deal: $75 million
Par Net On DWA over 3 years: $147 million


TOTALING
Estimated Revenue Created For Paramount via DW & DWA: $2.1 billion
Unrecoverable Cost of DreamWorks Deal: $900 million

This leaves $1.2 billion against the marketing and production costs of the 15 movies listed above.

My estimate on production costs? Just under $800 million. (This takes into account nothing but release costs on Perfume, a split on Flags, and a split on Sweeney.)

A conservative estimate on marketing on these films is $450 million.

POST-SCRIPT

Yes, Paramount owns the non-DWA films and they go into the Par library. That more than makes up for what seems to be an overall loss on the deal.

On the DreamWorks side? Nothing but a mountain slot machine. Win. Win. Win.

If AIG/USA ends up this way, with America coming out about even and AIG recovering from its troubles to be stronger than ever, I would consider that a win.

But Paramount didn’t get into this deal to bail out and enrich DreamWorks. And as I have said from early on, the biggest problem for Paramount is that they spent 3 years dogpaddling instead of rebuilding. So here they are, after huge gross numbers for three years, with very little to show for it, aside from the profits of the Transformers sequel to come, which they would have had at least 50% of as co-funder and distributor as laid out before the DW temp-merger was done.

THE REST OF THE DW/PAR PRODUCT
Eagle Eye 9/26/08
The Soloist 11/21/08
I Love You Man 1/16/09
Hotel for Dogs 1/23/09
Uninvited 1/30/09
The Lovely Bones 3/13/09
Transformers 2 6/26/09
Master of Time and Space 2009
How to Train Your Dragon 3/26/10
Master Mind 11/15/10

DWA’s NEXT 3
Madagascar: Escape 2 Africa 11/7/08
Monsters and Aliens 3/27/09
Shrek Goes Fourth 5/21/10

A Note From The Author: Whenever I throw one of these together, I find that there is stuff that people point out as flawed, in detail or concept. I will monitor both the e-mail and the blog comments for anything that seems like a misstep in my calculations and I will happily, in a clearly marked edit, make corrections if they are called for. This is not an attack on Paramount or a kiss for DreamWorks. It’s just mathematics, folks.

Posted by dpoland at September 19, 2008 04:28 PM

Comments

David, where did you your calculate the worldwide rental figures yourself or got them from somewhere?

It seems like DW purchase would have been quite protiable for Paramount too if only the studio stayed with them for a couple of years longer.

Posted by: Roman [TypeKey Profile Page] at September 20, 2008 07:36 PM

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