So the world exploded, going by most of what is being written about the Dune box office weekend. The film did solid business overseas, if modest by the pre-COVID standard, and opened domestically to $9 million more than had been estimated by The Guessers last week.
Deep breath, folks.
As per my last column, this will improve the financials for Warners a bit, not much at all for Legendary, and will still leave Warners floating in red ink. Bumping up my prior guess of a worldwide total around $259 million to $350 million (which I think is generous)… well, I am redoing all the numbers since that last column. I still believe Warners is $175 million in the hole before you factor in the value of the 30 day HBO Max window.
And that may be okay for them. Has any one title been responsible for even 500k new subs on HBO Max? Probably not. But Warners will want to tell you that the day-n-date fiasco has been critical to their growth of 6.5 million subs at HBO Max this year. Who am I to argue with people so good at getting media to print what they desire?
But remember, when you hear about Netflix and Amazon buying or offering to buy studio films for $150 million or $200 million, they aren’t buying 30 days, day-n-date. They are buying the theatrical window, the physical media and streaming single-unit purchase and rental VOD window, and years of the film on their service exclusively. I don’t know what the math would be for one of these free-spenders if all they got was 30 days day-n-date. But it would be a LOT less.
In the case of Dune, I am valuing - for my estimations - the post-theatrical value of the movie to be $100 million. For those selling those movies, the financial benefit isn’t so much making a profit as that they aren’t risking the advertising spend, which could keep a “flop” in the red.
In a case like No Time To Die, if $250 million was on the table, it would make MGM and the producers whole. But it assured there would be no upside. In retrospect, the $525m worldwide gross, headed to over $550m, leaves them around even, given still existing post-theatrical income streams. COVID probably cost the worldwide gross between $150m and $250m… which would have been where the film could have been assured of significant profitability. As is, they will be scraping. But the plum also remains in the Amazon column after the merger happens. And that was probably what tipped it. Had a streamer been offereing $350 million, it would have been hard to resist.
But I digress…
For the Dune situation to have ended up in black ink for Warners, what would they have needed to happen at the box office? Well, that is a tale of 2 distinct situations. (And again… a lot of broad, but educated hypothesis on my part.)
In a straight theatrical situation, WB’s marketing costs and distribution fee gets paid first and Legendary needs to see a worldwide gross of about $650 million to break even, broadly estimating a $105 million return to Legendary from theatrical and their 75% of post-theatrical revenues kicking in.
In this company-wide day-n-date situation - negotiated under the duress of Warners not wanting to back off and before we really knew that theatrical was viable but stuck at somewhere around 70% of its “norm” for now - Legendary surely expected to be made whole and to score a small profit.
So what does that mean? As in the last column, a lot of this is guesswork. I don’t have a contract to read to you. But…
Assuming Legendary was $150 million in for their 75% of production, let’s guess that before their cut of the physical media and traditional post-theatrical exploitation, Legendary needed $125m to be comfortable with this arrangement (assuring them roughly $200m in returns and a decent profit). So the scale is going to slide.
Warners is paying themselves in a lot of this. So how they actually chop things up or prioritize where revenue goes to fit their accounting department’s (and perhaps publicity’s) priorities would all be more guess work. But on $350 million worldwide gross, Legendary’s 75% cut, with distribution but before marketing costs, would be about $86 million.
So let’s say that Warners is cutting Legendary a check for “just” $40 million, if the worldwide gross gets near $350 million. That gets Legendary to $125m of their $150m spend with more money to come. And Warners eating all of the marketing money. And their 25%/$50 million for production.
Warners gets $35m for distribution and $29m for their cut of the gross.
That leaves Warners about $175 million in the hole with the only financial benefit to be mined from the 30 days on HBO Max. The cost of the film’s 100-days-out appearance on HBO and HBO Max is another payment that traditionally has been pre-set based on gross, but is probably restructured during the pandemic to the benefit of the production company… but those differences are relatively small numbers in the big picture.
The box office success of Dune probably saved Warners almost $20 million more they would have had to pay out to Legendary. So congratulations on that.
++++
The bad news this weekend is that we went back under the $100m weekend overall mark for the first time in the last 4 weekends. Dune, the 4th best opening of the month, wasn’t strong enough. Ron’s Gone Wrong opened weak. The top 3 holdovers didn’t holdover well enough. This weekend in 2019 did $108 million.
Last Night in Soho and Antlers are the wide openers next weekend. It’s been 4 years since Baby Driver opened okay and then held for a multiple of 5+x opening. Buzz on this one, that doesn’t speak as clearly to Wright’s well-earned loyal following, isn’t as strong. Searchlight would like you to think Guillermo del Toro made Antlers, but Scott Cooper did… not that there’s anything wrong with that. But it doesn’t make it any easier to maintain the illusion when the glorious Nightmare Alley trailer, directed by GdT, is stacked up in the same group of trailers for adults with adult tastes. Team Searchlight is full of smarties… but this may be one of those that got away.
And thus, a likely 2nd weekend in a row under $100m for the weekend. Waiting on Eternals.
++++
I would love to be more excited about the opening of Wes Anderson’s The French Dispatch. Personally, I think it’s a masterwork. It has ebbs and flows, but I really can’t imagine more of a distillation of all things Wes than this film.
That said, $1.3 million on 52 screens is a lovely addition to the list of closer-to-normal releases as theatrical recovers. But, $1.6 million on 27 screens more than incrementally better… which is what his last film, Isle of Dogs, opened with.
Searchlight built the $60m+ worldwide/$32m+ domestic era of Wes Anderson since 2012. I would love to see the film play out on that level. Time will tell.
Until tomorrow…
THB #15: Box Office Monday