Dragon Tattoo leads to a loss?

MGM Takes A Loss On ‘Dragon Tattoo’ And Seeks Better Terms For Sequels

By DAVID LIEBERMAN, Executive Editor | Thursday March 22, 2012 @ 5:21pm EDT

If you think that The Girl With The Dragon Tattoo was a hit, then talk to MGM Holdings CEO Gary Barber. His company co-financed the film, and although it has generated about $231M at worldwide box offices he tells investors who own MGM’s unlisted shares that “it is below our expectations and we booked a modest loss.” The company wouldn’t say how much it wrote down, but Barber notes that execs ”were hoping we’d do 10% more than we did.” MGM has an option to co-finance the other two films in the trilogy and is talking to Sony about following through “assuming we can achieve better economics.” He was much more upbeat about the early performance of 21 Jump Street, which MGM also co-financed. “We expect it to be profitable,” Barber says. He adds that ”MGM has entered 2012 as a revitalized company.” He declined to describe MGM’s strategy but says it is “evaluating all options.”
The call followed the release of the company’s annual report which dropped a few interesting tidbits about the company that emerged from bankruptcy protection toward the end of December 2010. Last year MGM spent $30.3M to repurchase about 1.5M shares, and ended the year with net income of $37.8M on revenues of $699.1M. The company disclosed that it acquired 100% of United Artists late last year, giving it the rights to Hot Tub Time Machine, Fame, Valkyrie, and Lions for Lambs. MGM says that it “may resume using the United Artists banner to develop and produce new films.” Meanwhile, MGM is co-financing New Line’s two films based on The Hobbit. It also appears to be tight with several studios including Viacom as a financing partner for Paramount’s G.I. Joe: Retaliation and Hansel & Gretel: Witch Hunters, and MTV Networks’ TV series Teen Wolf. MGM also names the members of its board, a lot of people with the word “former” in their titles. Former Fox and Discovery exec Peter Liguori’s on it. The lead director is Ann Mather, who was Pixar’s CFO and now also sits on the boards of Google and Netflix. There’s also former MySpace co-president Jason Hirschhorn and former CBS CFO Fredric Reynolds, as well representatives of major backers including Anchorage Capital, Highland Capital and Icahn Capital.

MGM Takes A Loss On 'Dragon Tattoo': Does This Mean David Fincher Is Out?

News by Kevin Jagernauth | March 22, 2012 6:36 PM |

Well, it's not quite "John Carter," but today MGM revealed in a call with investors (via Deadline) that though "The Girl With The Dragon Tattoo" took in $231 million worldwide (not bad for a hard-R crime drama that runs 2 1/2 hours long) it still didn't meet the numbers honchos thought they would get out of a fanbase that snapped up 18 million copies of the book. “...it is below our expectations and we booked a modest loss,” exec Gary Barber said, adding that they ”were hoping we’d do 10% more than we did.” But what does this mean about the proposed sequels? Back in January, it was announced that Sony (who has a co-financing and distribution deal with MGM) would be moving ahead with "The Girl Who Played With Fire" and "The Girl Who Kicked The Hornet's Nest." However, with the numbers now in and finalized, Barber cautions that sequels will only happen “assuming we can achieve better economics.” So what does this mean?
Well, we presume that studio executives are now looking long and hard at whether or not they want to keep director David Fincher on board. Now, he does have an option on 'Fire' -- said to be his favorite book of the series -- and his pay-or-play deal stipulates that he gets $5 million whether they move ahead with him or not. It's a pretty penny to pay, but studio heads might be ready to cut the cord. By most accounts, the production of 'Dragon Tattoo' featured a lot of head-butting between the director and the studio, starting with the casting of Rooney Mara, a decision that Fincher had to fight for. There were also concerns about the running time, which at one point was closer to three hours, something that Sony was not happy about (a movie that long usually means a sharp drop in how many times during the day it can screen at the multiplex). If a movie is a big success, that kind of friction is easily forgiven, but when a picture underperforms, it isn't so easily forgotten.
We're guessing a couple things will happen here: Firstly, MGM will probably watch the numbers of the recently released BluRay/DVD to see how it does (oh yeah, that DVD disc is pretty cool -- see below). Next, you can expect the budget on 'Fire' to be lower than the reported $90 million (which doesn't include the extensive P&A campaign, and we wonder if that number includes the late-stage reshoots on the movie) and as for Fincher? We think MGM may try to renegotiate their deal, and perhaps keep him on as an executive producer (keep the fanboys happy), give him a taste of the box office on the sequels and avoid paying out $5 million for him to walk.
But again, who knows. With Fincher apparently battling Netflix over "House Of Cards," perhaps the 'Dragon Tattoo' franchise is at least a fight he's been through already and is familiar with, and he'll be willing to bend a bit to return. But it'll be interesting to see how it plays out.