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April 28, 2009

Hard Summer Questions, Part 1

There are issues that face journalists and editors every day. Some are expected. Some are surprises.

Every summer, for instance, the issue of the cost of mega-movies comes up. Invariably, studios spin those numbers down. As a journalist, you hear all kinds of things and then have to parse it all, get enough sources to feel sure – since actually being handed a hard budget by someone inside production is very rare – and do your best to find the truth. Along the way, you end up feeling as though you are calling people who you have known for year - and often like and respect thoroughly – liars. After all, if someone tells you that the budget is $X million and they are a senior executive and they have been told directly by the CFO what the number on a film is, they feel they know it to be true.

But this is Hollywood. And perception is reality, even inside the hallways of studios. Publicists know that lying is a part of what they sometimes have to do. But many of the best ones really, really don’t like doing it. They would rather work the truth into something that benefits their sell than to throw out lies, in no small part because it can come back to bite them on the ass.

This year’s first “How much does it really cost?” is, for the moment – another one or two will surely come up – is Star Trek. I have not heard a single number, going back months to when the film actually finished post-production, that was not $208 million or higher. The number has come from all kinds of directions via people who are close to the production and the studio.

Reports when the film was greenlit was that the greenlit budget was right around $150 million… high for a Star Trek film, but that number would have made it the cheapest or second cheapest (behind Angels & Demons?) major release of May 2009. Obviously a big sci-fi film with a lot of CG… not a shocking number at all.

Word was, as the picture hit some minor delays because of the WGA strike last year, that the budget was rising. They also pushed the release from Christmas ’08 to Summer ’09, which in an of itself meant 6 months of interest on the dollars spent on the film. In addition, JJ Abrams decided to enrich the product quite a bit and that he was getting the full support of the studio. Around then, Spyglass was brought on as a funding partner in addition to Level 1.

When the picture locked earlier this year, the number that was out there was anywhere between $208 million and $225 million. Some had it up at $250 million, but that was probably an exaggeration… and was taken as such as the reports in the low 2s kept piling up.

And then, last week, The Number became $130 million in the press. WSJ danced a little by making it $130m - $150m (aka, the greenlight budget).

Obviously, it is in the studio’s interest to look like it has a smaller mountain to climb to profitability. Obviously, there are people who are rooting for any studio’s big movie to fail.

Aesthetically, the cost of a movie means nothing. There are great cheap films and there are horrible mega-budget films. But it can mean a lot to a studio as it tries to wrangle the perception of how things are going in the media. Last summer, Paramount had 3 huge hits that grossed $2 billion ($851 million domestically and another $1.15 billion overseas). But that story was tamped down a bit by the fact that Paramount’s only financial upside in that $2 billion was about $200 million in distribution fees. Not bad… nothing to sneeze at… but not really what has traditionally been thought of as what a $2 billion summer means to a studio.

This summer, Paramount once again comes to the table with three mega-movies, two of which are well established franchises (Star Trek and Transformers) and one that they hope will take off, GI Joe: The Rise of Cobra. The budget floating around for Joe is $170 million. Inevitably, the number will be set by the studio much closer to $100 million. I don’t have much intel on that film, so I don’t have a strong opinion as to what the truth is… but I am pretty sure that what the studio tells newspapers will be low. Likewise, on Transformers: Revenge Of The Fallen, the number is in the low 2s… but I expect spin to put it in the $180m range… and someone to use the word “crazy” to explain estimates that crack $200 million.

Of course, studios are smarter than journalists and geeks tend to think they are. I would bet that Paramount has Star Trek estimated to open in the mid-60s about now, running to a gross of just under $200 million domestic… and that internationally, they are praying daily. But let’s say worldwide is being estimated at $300 million… then $130 million to produce and $100 million to market worldwide makes that a clear success, no? Yes, you don’t get out of red ink until DVD, but that’s expected these days. Even another $20 million in costs means that they need another $30 million in box office (plus ancillaries) to make it up… not quite a success at $150m. Throw in another $60 million on top of that and all of a sudden, Star Trek has to be a surprise runaway smash worldwide to break even.

They know this.

The math is not hard.

They also know that Transformers 2 is going to be huge… and that a big chunk of the profits will be siphoned over to Steven Spielberg and DreamWorks… and that their former partners will not be shy about touting the windfall, especially as they keep waiting for their own cash wave to crash onto their shores.

They also fear that GI Joe could be one of those films that tanks for real, whatever it costs.

Surprise, franchise-record-breaking box office for Star Trek with some perceived financial upside + lots of success with Transformers 2 + a write-down on GI Joe = a pretty good summer. Good + Great + Terrible still = Good-plus.

Obviously, greater success is a variable that everyone is thrilled to see and changes the overall math. It isn't too bad when the films are good also.

It’s funny… I just had a conversation with a magazine about breaking down the revenues of a summer movie, but they were interested in a smaller movie with a major star… making the math all the more convoluted… and forcing a lot more guessing about gross points. As you have one of those conversations, you realize how many pieces there are of the puzzle… how many variations that make breaking it down to “Actor X is making X% of your box office dollar” a bit of a reach. (This includes the constantly aggravating estimates of numbers of tickets sold… the single least important and impossible to estimate on any single movie statistic there is.) At the same time, some of this math is pretty basic.

Paramount and Fox have more cash on the table this summer than any other studios. At least $800 million per studio on just 3 movies each, including worldwide P&A. Fox is betting huge on three sequels. Paramount has two sequels and a launch.

WB is just the domestic distributor of Terminator Salvation, leaving their only mega-budget release being Harry Potter, fully funded by the studio… and one of just two mortal locks of the season to gross more than $700 million worldwide.

Angels & Demons is the only $100 million-plus movie from Sony this summer.

Land of the Lost and Public Enemies are as big as Universal is going this summer with $35 million for Bruno looking like the big bargain of the year.

And Disney’s only expensive film is Pixar’s Up.

Let the dancing begin…

Posted by dpoland at April 28, 2009 10:48 AM

Comments

Fine essay, Dave.

Posted by: Blackcloud [TypeKey Profile Page] at April 28, 2009 01:11 PM

I like reading this stuff way more than the endless ranting about other websites and their dodgy morals.

Posted by: matro [TypeKey Profile Page] at April 28, 2009 01:16 PM

While it is unlikely, I can see Universal going all summer without one reaching 100 million. They seem to have one of the cheaper slates, probably about 350 million before P&A, but they don't have a predestined hit like all the other studios.

Posted by: hcat [TypeKey Profile Page] at April 28, 2009 01:33 PM

GI Joe is going to lose a lot or money.

Posted by: Josh Massey [TypeKey Profile Page] at April 28, 2009 02:11 PM

"While it is unlikely, I can see Universal going all summer without one reaching 100 million. They seem to have one of the cheaper slates, probably about 350 million before P&A, but they don't have a predestined hit like all the other studios."

That's because they had the smarts to move their one predestined hit (Fast&Furious) out of the Summer derby.

Great article. The 'spinning down' of budgets isn't done just by studios though, but directors as well. Remember two years ago, when Bay was telling anyone and everyone that Transformers cost 'half' of Spidey 3 and Pirates 3, like it was some sort of artistic badge of honor?

Posted by: Dr Wally [TypeKey Profile Page] at April 28, 2009 02:30 PM

This is somewhat off the subject, but I'm amazed at how some movie geeks/writers don't seem to understand box office numbers, even now. For example, looking over joblo.com's most recent weekend box office report, the writer states that since Crank and Observe & Report will make slightly more at the BO than they cost to produce, they will be profitable. No mention of P&A costs, etc. It's that black and white; movie X cost $15 million to make and it grossed $20 million, therefore it made money. Just a random thought I had recently.

Posted by: Stella's Boy [TypeKey Profile Page] at April 28, 2009 02:52 PM

Part of what Michael Bay was bragging about was how much money his production received from Product Placement, which I've heard rumors was astronomical. hence, his "budge" was half of Spidey 3.

When I think of my favorite movies, how much they cost really doesn't mean I'll like them more or less. For that matter I didn't like Evan Almighty because it wasn't funny and pretty boring, not that it cost what it cost.

GI JOE - that superbowl TV spot just about killed any momentum for that movie. It feels bad, looks bad.... good god it looks bad.

Universal also has Funny People this summer. And that's gotta be expensive too for above-the-line talent.

Posted by: Hopscotch [TypeKey Profile Page] at April 28, 2009 03:48 PM

Only a New York Yankees fan would love this summer's slate.

Posted by: Chucky in Jersey [TypeKey Profile Page] at April 28, 2009 03:53 PM

In addition, JJ Abrams decided to enrich the product quite a bit and that he was getting the full support of the studio.

Was this after principle photography and, if so, what does this mean to the end product? Reshoots or additional scenes? Can you make effects better or more elaborate after they've already been planned and budgeted for? Just curious.

Posted by: Eric [TypeKey Profile Page] at April 28, 2009 04:02 PM

On another note: does it makes anyone suspicious when there's an addendum to the title of a non-sequel, a la G.I. Joe: Rise of Cobra? Like, why isn't it just G.I. Joe? It sets off a little alarm in my head that says "They're trying to start a franchise, avert your eyes!"

Posted by: Eric [TypeKey Profile Page] at April 28, 2009 04:05 PM

Eric, Rise of Cobra just sounds better than GI Joe alone. Lipstick on a swine.

The studio brass knows they will never have to even remotely use one collective neuron pertaining to a sequel or franchise or whatever.

Posted by: Aris P [TypeKey Profile Page] at April 28, 2009 04:14 PM

Excellent write-up, Dr. Poland.

Re: Stella's Boy

You're absolutely right and - to take it one step further - those same online box office prognosticators also disregard the percent split to the theater owners. There was a truly fine breakdown of how all these costs work in the opening pages of Edward Jay Epstein's "The Big Picture: Money and Power in Hollywood" breaking down the costs of the "Gone in Sixty Seconds" remake that explained just how hard it is for a movie to go into profits during a theatrical run.

Similarly, you often see those who DO make P&A estimations typically estimate down as a $15 to $20 million prints & advertising budget just isn't going to get you as far as it used to.

Posted by: SJRubinstein [TypeKey Profile Page] at April 28, 2009 04:15 PM

P&A has to be AT LEAST 33.3% of whatever the budget ends up being, and up to almost 50% on these summer mega movies. Star Trek has to be MINIMUM 200 million. And that's a conservative guess.

Posted by: Aris P [TypeKey Profile Page] at April 28, 2009 04:26 PM

GI JOE is going to COMMAND ALL. Get ready to BOW to Rachel Nichols, bringing hotness back.

JOE is the one movie of the summer, other than their own sure-to-be-masterpieces, that GOD1 (BAY) and GOD2 (Tony S.) would bestow their seal of approval upon.

AND THEN THERE WAS BOWING.

Posted by: LexG [TypeKey Profile Page] at April 28, 2009 04:27 PM

Even Lesher cant fuck this Paramount summer slate up

Will pay for The Soloist, Dance Flick, Nowhereland, The Goods: The Don Ready Story, and Carriers

Posted by: steamfreshmeals [TypeKey Profile Page] at April 28, 2009 07:34 PM

A few threads back there was moaning about summer 2001. Look back to that pre-9/11 summer and you'll see the original stuff outperformed the remakes and sequels.

@steam: "The Soloist" is a DreamWorks/Universal title.

Posted by: Chucky in Jersey [TypeKey Profile Page] at April 28, 2009 07:52 PM

I may be in the minority here but I liked the GI Joe superbowl ad. Have Snake Eyes fighting Matrix style and I get excited. I'm sure I'm not the only one. And for all the knocks it takes the first two Mummy movies were a lot of fun for me.

Posted by: tfresca [TypeKey Profile Page] at April 28, 2009 08:03 PM

"Only a New York Yankees fan would love this summer's slate."

(Bronx raspberry)

Posted by: Hallick [TypeKey Profile Page] at April 28, 2009 08:04 PM

Sienna Miller makes my cobra rise.

Posted by: LYT [TypeKey Profile Page] at April 28, 2009 09:53 PM

"Sienna Miller makes my cobra rise."

Then your motto's gotta be "Yo J.O.!"

Posted by: Hallick [TypeKey Profile Page] at April 28, 2009 10:33 PM

You are all terribly wrong about GI JOE. I mean... terribly wrong. The Superbowl spot was pretty damn awesome, but this is the hot blog. So many of you feeling this way is expected, but nothing new.

GI JOE will be a good-sized monster for Paramount. If you disagree. Go back to Summer of 2007, read the comments about Transformers, and realize this is a Daniel Faraday situation.

Posted by: IOIOIOI [TypeKey Profile Page] at April 28, 2009 11:08 PM

GI Joe will be much closer to Speed Racer than Transformers.

Posted by: Josh Massey [TypeKey Profile Page] at April 29, 2009 06:05 AM

Small Soldiers made $54 million in 1998. Adjusting for inflation and hot actresses, G. I Joe could make somewhere around $70-80 million.
http://www.youtube.com/watch?v=k-m4-0azxdM

Posted by: doug r [TypeKey Profile Page] at April 29, 2009 06:41 AM

Josh: if you think so, but I would disagree.

Comparing it to Small Soldiers is also really silly. Apparently you folks are some of the only on the net. Who have no idea who Conrad Hauser is. Good for you. Good for you.

Posted by: IOIOIOI [TypeKey Profile Page] at April 29, 2009 07:58 AM

you're right IO, I had to google the name, and even though I had quite a few GI Joes as a kid I never knew any of their real names.

I think Joe has the potential to break away from the pack toward 200 million if it gets the kids in to multiple showings(little boys love Ninjas and guns) but I don't see any way this is making Transformers money.

Posted by: hcat [TypeKey Profile Page] at April 29, 2009 09:17 AM

Like the average audience member would know who Conrad Hauser is either, or cares.

It's awesome that IO is condesending toward people who don't know the real name of a character from a child's toy line. As if that's something to be ashamed of.

Posted by: The Big Perm [TypeKey Profile Page] at April 29, 2009 09:31 AM

GI Joe is probably my favourite property from my childhood cartoon watching...I still enjoy a well told Joe story (it's the only new comic I still read now that it's been re-launched). The GI Joe: Resolute miniseries that was aired over the past week or so is more solid than anything the movie is going to bring us. It's how Joe should have ended up on the big screen - serious storytelling that would give old fans something to get excited about and new fans something to explore more.
GI Joe: Rise of Cobra will probably have a good opening weekend, but unless it's got some hidden charm, it's tanking soon after.
As a life long fan, I'm not even sure I'll see it. Oh hell, I will, but only so I can bitch and moan to any of my non-nerd friends about how terrible it is.

Posted by: Aladdin Sane [TypeKey Profile Page] at April 29, 2009 09:53 AM

Permish: there's the way hcat took it, then there's the way you took it. Much like someone else in these sort of situations. You took it the wrong way. No surprise really, but I never condescend to people. It's too passive aggressive for me.

So the point remains that many of the blog members are underselling this film's potential. I simply disagree. This is -- more or less -- GI Joe. This is something kids have passed on to their kids and to their kids. It will make some solid bank. If it's a solid film, that's another story.

Which seems to be the problem some members in this blog have had. Box office does not always dictate quality. So it could be a horrible freakin film, but this is a Daniel Faraday situation.

Many folks in here felt the same way about Transformers earning potential. I have a feeling it could work the same way with GI Joe.

Posted by: IOIOIOI [TypeKey Profile Page] at April 29, 2009 12:05 PM

I feel strongly both ways. I think IO tends to see a lot of things through his own eyes and anyone who disagrees is an idiot to him.

On the other hand, while his enthusiasm may be excessive, the idea that any of us who don't know what the film really looks like or how they will start marketing it next month and want to argue that we have The Answer about its success or failure is a reach as well.

The date on the movie pretty much tells you that it won't be Transformers... and that Par doesn't expect it to be Transformers. But $150 million-plus domestic in that slot is certainly viable. And maybe Sommers will bring the kitsch that made The Mummy perform better than expected... to the degree that the utter piece of shit sequel last year did $400m worldwide. Or maybe it really is Dungeons & Dragons.

But Sommers, since The Mummy launched a decade ago, has had disappointments, but hasn't directed a film that grossed less than $300m worldwide.

It certainly won't be a smash just because it's G.I. Joe. But if it's a fun summer movie - he certainly hired a bunch of actors that may not be big stars, but that people like to watch - you never know...

Posted by: David Poland [TypeKey Profile Page] at April 29, 2009 12:05 PM

I think GI Joe could make money too, but I also tend to think that if it does, it has less to do with people caring about GI Joe specificially...if anything the group that would have gone to see the movie specifically because it's GI Joe were probably turned off by the cartoon soldiers flipping around in slo-mo from the commercials.

Transformers looked like a huge hit from the first commercial...huge robots and Michael Bay. This is kitchy soldiers most likely doing campy things by the director of Van Helsing. I wouldn't be surprised if it does okay, but I'd be really surprised if it was HUGE, and I wouldn't be surprised at all if it was a disappointment.

Posted by: The Big Perm [TypeKey Profile Page] at April 29, 2009 12:49 PM

"I would bet that Paramount has Star Trek estimated to open in the mid-60s about now."

Where can I take you up on that bet?

Posted by: gradystiles [TypeKey Profile Page] at April 29, 2009 01:34 PM

"On another note: does it makes anyone suspicious when there's an addendum to the title of a non-sequel, a la G.I. Joe: Rise of Cobra? Like, why isn't it just G.I. Joe?"

Also remember, that this incarnation of GI Joe, based in the 80's cartoon was actually a reboot in itself of the Joe franchise. The original GI Joe line of toys, comics and records, featured an actual character named GI Joe that was based out of Adventure Team Headquarters. I had much more of a 40's WW II feel to it. It isn't remembered much by younger fans of the cartoon but for those of us born in the 70's it is still pretty iconic.

They may want to make sure people know which version they are getting. I remember getting a GI Joe comic in the 80's and wondering where the hell the actual character of GI Joe was.

Posted by: Nicol D [TypeKey Profile Page] at April 29, 2009 02:07 PM

I don't know, Grady... maybe the same place where you choose to say something instead of asking smug rhetorical questions...

Posted by: David Poland [TypeKey Profile Page] at April 29, 2009 04:35 PM

David Poland, you really do make a guy scratch his head. You post a statement like this about me; "feel strongly both ways. I think IO tends to see a lot of things through his own eyes and anyone who disagrees is an idiot to him." While any one doing the same to you over the past weeks, is a grandiose asshole. You see the problem David? Do you see it? I hope you see it. Nevertheless; you discounting a tri-generational toyline's movie as if it's nothing, is about as silly as what you did above. It's GI JOE. It's a part of the fabric. Never knock the fabric man.

Posted by: IOIOIOI [TypeKey Profile Page] at April 30, 2009 01:34 AM

The toy may be tri-generational, but I can't see a 50 year old guy watching that trailer and being too interested in see the movie. The American Godzilla was also based on a tri-generational icon and that was seen as a disappointment.

Posted by: The Big Perm [TypeKey Profile Page] at April 30, 2009 06:19 AM

I agree with Perm but would actually go farther. Remembering Lex's Up rant from a few weeks ago about 12 year old's deserving a beatdown from their peers for watching a animated movie, if you were between the ages of 15 and 22 would you go to see a G.I. Joe movie? This would be like highschoolers seeing a live action ballerina barbie movie. Paramount is counting on a lot of kids and geeks to show up for this and they could come out in force and make it successful, but I think the 'have actually touched a woman's breast' demographic will probably skip it.

Posted by: hcat [TypeKey Profile Page] at April 30, 2009 07:06 AM

Hcat: what the fuck? Really? A guy goes away for a bit, and this is the type of discourse found on the board? Really? Really? Seriously? Just come on!

Posted by: IOIOIOI [TypeKey Profile Page] at April 30, 2009 02:29 PM

The guy who got banned because he kept going apeshit when people were the least bit critical of the movies he loved is complaining about my level of discourse?

Is there an arguement you would like to make against my statement. Do you think GI Joe is going to be a date movie? Or is it more likely that the audience will be young boys and single men who spend a large number of hours each week playing video games. I am not saying Paramount can not turn a profit with this audience, i am simply saying despite the August release date the over 18 audience for this movie will still have pasty white skin.

Posted by: hcat [TypeKey Profile Page] at May 1, 2009 06:29 AM

We were just fine without you, IO.

It's been pretty civil since you stopped commenting.

Posted by: David Poland [TypeKey Profile Page] at May 1, 2009 11:08 AM

No; it's been pretty dead. Dead. Dead. Dead. If you like having a dead blog, David. You should go and give Lex a column. Hold on. Wait. You did give Lex a column, and got you some RESPONSES!

That's the thing David: you just don't get. Not as bad as Hcat who missed the reason as to why I did not post for a couple of days: I chose not to do so.

Poland did not ban me. He could not stop me if he tried. I simply agreed to go along with him. Your response is also bullshit, but this is the hot blog. Where this group of posters are confound -- simply confound -- by movies that come out from April to August.

Seriously; people take their dates to see movies that feature people their own age getting murdered for an hour and half, and you are wondering if GI JOE is a date movie? Do you even pay attention to pop-culture, or do you just like spouting off about it online? Seriously, again, get a fucking clue with your lame ass responses about who will see this film.

You see David. Hcat is why you need me. You need me on that wall, and you want me on that wall. Without me there, you ain't got shit. So please... your civility line is bullshit, giving Lex is bullshit, and it just feels so empty without me.

Posted by: IOIOIOI [TypeKey Profile Page] at May 2, 2009 11:17 PM

IO: You actually have a legitimate point. Seriously. I mean, if couples will go see Black Christmas, why wouldn't they go see G.I. Joe?

http://movingpictureblog.blogspot.com/2006/12/not-very-merry.html


Posted by: Joe Leydon [TypeKey Profile Page] at May 2, 2009 11:58 PM

for a moment i thought you meant the original 'black x-mas' (legend), i nearly had a coronary to hear it mentioned in the same breath as 'g.i.jane'

(i think boys take girls to 'horror movies' because they think their dates will jump into their laps and cling to them in fear like in the movies and on tv, thus almost getting to first base in the theatre without even having to make a move)

Posted by: leahnz [TypeKey Profile Page] at May 3, 2009 01:13 AM

Yeah, that's silly. Everyone knows that horror movies - maybe not all of them, but a huge number of them - are date movies. And have been since the days of Lugosi and Karloff.

Posted by: jeffmcm [TypeKey Profile Page] at May 3, 2009 01:58 AM

No; it's not silly. Couples go to countless films together. Hcat is being another one of those CLEVER INTERNET PEOPLE, that likes to assume he knows what's going on. When he's just another guy making references to pasty face guys, that have never seen a boob. Seriously; it's fucking bullshit, and ignores the fact there are countless girls/women who know about the Real American hero.

Again; this is another bullshit response one can only find on this blog. If it were find anywhere. The poster would be run out on a rail, or given a column! HIYOOOOO!!!!

Civility David? You mean the whole Roger Friedman post you made a week or so back? Is that civility? Doubtful, but it did feel so empty without me.

Posted by: IOIOIOI [TypeKey Profile Page] at May 3, 2009 10:58 AM

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