When your billion dollar grosser loses money.

A. "interest cost" is the premium Warner pays the BANK to borrow $315m for negative cost (production)
$315m x (18.2%) = $57m (reasonable rate considering film is a high risk investment)

Total to bank = $373m (of course this is inflated and part of the loop, but its on the books)

B. Where debt is held in check is on the 34% distribution fee. $211m

BTW, on tent-poles & Franchises Exhibiters splits are closer to:


Distributor / Exhibiter
week 1: 90% - 10%
week 2: 80% - 20%
week 3: 70% - 30%
week 4: 60% - 40%


Overview:

1. Bank = 18.2%
2. Distributer = 34%

Do you really believe you can get ahead and out of debt if someone took 52% of your paycheck ?

And last.... the killer is that this statement does not show the Tax subsidies:)
$315m @ 30%^ = $95m tax credit.


Lets have a bake sale and sing.
Cheers
 
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Lets not also forget you can practically cut any gross revenue in half...since theaters keep about that much. So when you gross a billion you REALLY only end up starting at 500 million when it comes to subtracting...
 
KyleProhaska said:
Lets not also forget you can practically cut any gross revenue in half...since theaters keep about that much. So when you gross a billion you REALLY only end up starting at 500 million when it comes to subtracting...
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yeah, but doesn't gross mean gross to the production company? (i. e. after the theaters get their 1/2?)
 
If you agree to take points, the only points you'll get are on the knives stuck in your back. I thought everyone already knew that.
 
Fahad said:
yeah, but doesn't gross mean gross to the production company? (i. e. after the theaters get their 1/2?)
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No...anytime you see what a film grossed on the internet, that's without any subtractions. It's called GROSS for a reason. You can go to Box Office Mojo right now and cut any gross numbers you see in half and start there with a lot of confidence. That's why I laugh when people go "It's over the 200million mark!" and it was a 200million dollar movie. You need to make FAR more than 200million to make that money back and cover all costs. Cost of Production, Marketing Costs, Prints that go to theaters...it's nuts.
 
KyleProhaska said:
..it's nuts.
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What I find particularly nuts is the fact that the movie theaters have to "lease" the movies from Hollywood just for the privilege to screen them. And, Hollywood gets a monumental slice of the ticket sales. The way the system is set up, Hollywood needs the theaters yet the theaters are being strong-armed. If Hollywood gave back just a bit to the theaters perhaps we wouldn't have to take out a second mortgage for popcorn and a coke.
 
Uh...we *are* all in business to make money, you know...

So long as people continue to pony up the $$$ to go to the theater - at least, on the big blockbuster opening weekends to which the studios seem to have gotten wired like an addiction - there will be zero impetus to 'give back' anything - a construction which I find problematic since in order to 'give back' you have to have first taken something away in the first place...

The studio->distro->exhibitor relationship has been fraught ever since studios were forced to divest themselves of their theater chains, anyway.
 
Sad Max said:
Uh...we *are* all in business to make money, you know...

So long as people continue to pony up the $$$ to go to the theater - at least, on the big blockbuster opening weekends to which the studios seem to have gotten wired like an addiction - there will be zero impetus to 'give back' anything - a construction which I find problematic since in order to 'give back' you have to have first taken something away in the first place...

The studio->distro->exhibitor relationship has been fraught ever since studios were forced to divest themselves of their theater chains, anyway.
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No, I completely agree with you. In fact, I hesitated when I used the word choices "give back" because its not really what I meant and isn't even plausible. If someone was willing to pay me $1 million dollars to paint their house, I'd take it. If I could get away with charging them $2 million, I'd do that. My point was that Hollywood has called the shots since the dawn of the industry (and that pretty much goes World Wide) and you see the result of that when you pay $90.00 dollars for a medium sized bucket of popcorn. Well, $90.25 if you want a large.

With a few exceptions, the onus is on those who are shelling out the dough to set the market-price.
 
The market dictates the market value of the thing, which effectively is its real value - since any given product or service's value is defined in a market by what the market will pay, for it.
 
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