In a nutshell:
- "Mediawan buying a majority (60%) stake in (Plan B) now and the rest at a later stage."
- "will be paid half in shares of Mediawan and half in cash."
- "The payment in part in shares helped moderate the premium Mediawan paid for Plan B, which was valued at about 15 times its annual underlying profit of more than $10mn,"
- "The deal structure means Pitt and his partners Dede Gardner and Jeremy Kleiner, who run Plan B on a daily basis, are incentivised to remain with the group since they will share in any value creation."
Using the above figures, they received $45M in cash and $45M in Mediawan stock. FT also wrote that "people familiar with the matter told the FT that the deal valued Plan B in excess of $300mn." But the sale price valued Plan B at "
15 times its annual underlying profit of more than $10mn" which would be $150M. $300M would be 30X profit. If the proceeds are divided equally, Brad, Gardner and Kleiner will reach receive $15M in cash and $15M in stock.
Mediawan H1 2020 results:
Revenue of €115.7m over the first semester,
EBITDA of €17.7m
Shareholders’ equity – attributable to owners of the Company (€m) 209.6
"Mediawan’s Plan B investment will be made through a new entity, Mediawan US. Mediawan US’s board will be chaired by Atwater Capital’s founder and managing partner Vania Schlogel, while Mediawan’s co-founder Capton will act as CEO."
"Mediawan’s existing shareholders, which include private equity group KKR and France’s BPI state-backed investment fund, will all take part in a capital increase to avoid dilution" after it issues shares to Plan B. Brad, Gardner and Kleiner will be shareholders of the parent company. Mediawan US will be a wholly owned subsidiary.
The deal includes provisions for Mediawan to eventually purchase the rest of Plan B and be its sole owner. Brad & co.'s intent was to sell the company entirely. They did not plan on selling Plan B only to be tied up as minority shareholders in a privately held European content group and effectively remain as indirect stakeholders in Plan B. Mediawan structured the deal with the share portion so they would be "incentivised to remain with the group" at least through a transition phase. I think the cash portion is the true purchase price and the shares are a bonus to induce them to stay on for a while. It also serves to inflate the value of the deal. Plan B's main assets are its three principals. It does not have a library of valuable IP. Its Oscar winners were produced with other production companies listed ahead of it. It relies on Brad, Gardner and Kleiner's taste and relationships. Mediawan acquired a prestige name and an introduction to Hollywood.
Even if "the deal valued Plan B in excess of $300mn" was true, that would still be considerably below previous high profile deals: "Last year, Reese Witherspoon sold a majority stake in her Hello Sunshine operation to a Blackstone-backed media venture led by Walt Disney Co. veterans in a deal that valued the business at $900 million. A production company created by LeBron James was valued at $725 million in the sale of a minority stake to RedBird Capital Partners, Nike Inc. and Epic Games Inc." As Brad told FT, "I feel like the gold rush has stagnated to some extent. It has gone the other way. So many of those breathtaking deals still have to prove themselves. We wanted of course to be valued fairly. We felt Mediawan did that." In other words, they did not get anywhere near the premiums paid for Witherspoon's and LeBron's companies. What they got was "fair" -- a lot less than what they had hoped.
It doesn't appear as though there were any other serious buyers besides Mediawan. He met with the Mediawan principals in Paris in late September. In October, news circulated that Plan B was for sale -- an effort to get other potential buyers to step forward. Apparently, no other buyer offered a better deal.
Variety
“We’re seeing some huge acquisition prices for companies that are fronted by a very well known, bankable star, so this is part of a trend where the value is really always linked to the talent,” said Claire Enders at London-based Enders Analysis.
Enders says the deal “just shows that there is a huge prestige attached to a Hollywood star, and for a French company like Mediawan, this is the kind of blue chip marquee type acquisition which will make them feel that they can attract more talent in Hollywood,” Enders continues. That said, she says Mediawan is paying an “absurd price” to “buy something as nebulous and conceptual as the value of Pitt’s relationships and the attraction that he will hold to other bankable stars.” Some would argue, however, that the price paid by Mediawan is coherent with Plan B’s financial health.
Backed by KKR and Atwater, the privately held company was launched seven years ago by Pierre Antoine Capton, telco billionaire Xavier Niel and financier Mathieu Pigasse, as a special-purpose acquisition vehicle listed on the Paris stock market. It rose in prominence through high-profile acquisitions of over 60 indie production labels with a track record of making both TV and films. These include Mon Voisin Productions (“Call My Agent!”), Chi-Fou-Mi (“November”), and Dimitri Rassam’s Chapter 2 (“The Three Musketeers”).
With Plan B, Mediawan will be looking to leverage Pitt and his partners Dede Gardner and Jeremy Kleiner’s relationships with agencies and high-pedigree talents to make more prestigious movies.
Still, Peter Newman, head of New York University’s MBA/MFA dual degree program, says “there’s never been such a profound disconnect between quality product and financial success.”
“The content industry is based on name brand relationships, taste and quality, and obviously Brad Pitt is a name brand,” says Newman. “He, Gardner and Kleiner have got great relationships with talent and with distributors around the world, and great taste which is exemplified by the amount of films they have that have either been nominated for or won Academy Awards and other major awards.”
Indeed, Plan B boasts a string of successful awards fare, with three of their films, “The Departed,” “Moonlight” and “12 Years a Slave,” all winning the Oscar for best picture.
“But their libraries are virtually non-existent…and if you look at the likely films that will win huge accolades at the next Academy Awards, it would take a miracle for them to become highly profitable,” Newman continues.
Case in point: Plan B’s latest film “She Said” has earned warm reviews and is being talked about as an Oscar contender, but it bombed at the box office. The movie about the New York Times reporters who broke the Harvey Weinstein story has only earned $10.3 million worldwide.
When asked about the commercial performance of Plan B movies, Capton said he wasn’t so concerned because “the demand for quality content is extremely strong. And ‘She Said’ is exactly that.”
Capton also suggested that Plan B will probably be less reliant on the U.S. under Mediwan’s helm. For one thing, Plan B will be able to tap into Europe’s wide-ranging financial resources, from the backing of French studios to lucrative soft-money schemes. They’ll also be diving into TV series, which Capton said was one of the strategic aspects that triggered Plan B’s interest in Mediawan, which is extremely well-connected within the European TV landscape. The French group is behind “Call My Agent!,” among other series and documentary hits.
As Enders notes, “France has a unique position in Europe because producers have a protected IP position” which she says isn’t the case elsewhere, including even the U.K. where producers increasingly “operate at very low margins with fewer and fewer rights.” France is the first country in Europe to have reached an agreement with streamers such as Netflix and Amazon to regulate domestic content investment and rights ownership as part of the E.U.’s Audiovisual Media Services Directive. Local TV groups such as Canal+ also have French and European content investment obligations, which Plan B titles could fit into if the financing comes from the continent.
Yet, unlike many film groups that have gone into TV, Plan B probably won’t have many options for spinoffs of its biggest movies since it doesn’t own the underlying intellectual property. Those remain with the studios that financed them. But even if they did, the movies they tend to make “don’t lend themselves to sequels or trilogies or remakes or anything of that sort,” points out Newman, adding that Plan B “doesn’t either have a huge reservoir of developed projects to make.”
But Plan B’s dearth of library titles and developed projects isn’t worrying Capton, either. He said the idea behind the deal was for Mediawan and Plan B to create value going forward.
“Once in a while we’ll look to finance content in order to keep 100% of their IP,” said Capton.
Several companies such as EuropaCorp and Vivendi tried and failed to make it in the U.S., mostly because their oversized ambitions. EuropaCorp attempted to get into the theatrical distribution business with a financially doomed banner, Relativity Media; while Jean-Marie Messier nearly bankrupted Vivendi with the $42 billion acquisition of Seagram, the owner of Universal Studios 20 years ago. But Capton says these two examples date back to a time when the content industry was strictly local.
“Everybody’s talking about what we did because we set a foot in the U.S. with the biggest star in the world but the reality is that we’ve essentially brought together like-minded producers,” adds Capton.
Mediawan began its foray in the U.S. earlier this year with the launch of Blue Morning Pictures, along with Zeller, the French playwright-turned-filmmaker whose feature debut “The Father” won two Oscars, and former CAA agent Federica Sainte-Rose. And Capton suggested a project bringing together Zeller and Pitt could be in the cards.
“The team at Plan B has a lot of respect for his work, and it’s mutual,” he hints.
Brad Pitt’s Plan B Entertainment, the acclaimed Hollywood producer behind Moonlight and The Big Short, has been bought by France’s Mediawan in a rare transatlantic deal that values the US group at more than $300mn in cash and shares.
Pitt told the Financial Times that the Oscar-winning company he co-founded in the early 2000s was “already bulging out of the seams of our little garage” and was ready to expand with the backing of Mediawan, a content group backed by three of France’s most prominent media investors.
“We weren’t going to do this unless we found like-minded partners. We certainly feel that way with Mediawan,” Pitt said. “We have always just concentrated on the craft, the art, the artisans, and the opportunity to be able to do that in a grander and more global way is exciting for us.”
Mediwan’s acquisition of one of the most prized assets in Hollywood’s independent production sector represents the most significant French dealmaking foray into Hollywood since Vivendi’s acquisition of Universal Studios in 2001.
The privately held Mediawan, whose titles include Call My Agent and The Three Musketeers, was founded in 2015 by the telecoms billionaire Xavier Niel, investment banker Matthieu Pigasse and television executive Pierre-Antoine Capton. It has grown rapidly in Europe in recent years by snapping up small to mid-sized production houses in places from Spain to Germany, and is now making its first foray into the US.
Chief executive Pierre-Antoine Capton cast the deal as a strategic shift as Mediawan seeks to go global. “Plan B is the best independent producer in the US, so I wouldn’t have wanted anything else to help us grow,” he told the FT.
During a production boom when Hollywood has been awash with frothy takeover offers, Plan B has stood out as a much-envied asset with a consistent record of making high-quality, award-winning films, as well as television series for Amazon and Netflix.
Three of its movies — The Departed, 12 Years a Slave and Moonlight — won Oscars for Best Picture. Recent releases include the Marilyn Monroe biopic Blonde for Netflix and the drama She Said on the fall of Harvey Weinstein.
Asked whether the recent spate of high-valuation deals had persuaded him to sell, Pitt replied “yes and no”.
“I feel like the gold rush has stagnated to some extent. It has gone the other way,” he said. “So many of those breathtaking deals still have to prove themselves. We wanted of course to be valued fairly. We felt Mediawan did that.”
Neither Plan B nor Mediawan would disclose details of the transaction. But people familiar with the matter told the FT that the deal valued Plan B in excess of $300mn, with Mediawan buying a majority stake in the group now and the rest at a later stage.
The sellers will be paid half in shares of Mediawan and half in cash. Mediawan’s existing shareholders, which include private equity group KKR and France’s BPI state-backed investment fund, will all take part in a capital increase to avoid dilution.
The deal structure means Pitt and his partners Dede Gardner and Jeremy Kleiner, who run Plan B on a daily basis, are incentivised to remain with the group since they will share in any value creation.
The payment in part in shares helped moderate the premium Mediawan paid for Plan B, which was valued at about 15 times its annual underlying profit of more than $10mn, said one of the people.
Capton acknowledged it was important for Mediawan not to “jump in blindly”, given the chequered history European investors have had in Hollywood over the decades. But he noted the rise of non-English language content on streamers, including shows such as Lupin, had opened new opportunities for European players.
“The key to the success of Mediawan is leaving all producers independent to do their work. Plan B has excellent results, they make the best movies . . . it is really working well without me!” he said. “I’m not dreaming of having an office in a tower in Hollywood or to be some sort of mogul.”
Kleiner, who joined Plan B in 2003, said there was “a cultural fit and understanding”.
“We do want to grow and we do want to make more stuff but we need to do it in an environment that preserves our DNA,” he said. “Scale and quality is a challenging thing to manage and we like to think we have been decent at it in recent years.”
Like all independent movie producers, Plan B has been grappling with a more challenging market for independent films at the cinema. “Anyone looking at the box office this fall has to pay attention to what is happening,” said Gardner, the first woman to win two Oscars for Best Picture.
“We trained everyone to watch movies differently, from home, in order to get through the pandemic. It is natural that it will take some time for that to go back . . . I hope it will.”
Pitt played down the prospects of Plan B making French-language movies. While he owns a winery and château in Provence and has spoken French in some movies, he stressed that was thanks to the wonders of lip sync. “That required looping my friend,” he said. “A lot of loops.”
By Elsa Keslassy
Brad Pitt’s Plan B may have a new owner in Mediawan. But Pierre-Antoine Capton, the head of the conglomerate behind “Call My Agent!,” says he plans to take a hands-off approach to overseeing the Oscar-winning company he just bought.
“Plan B will continue to operate independently with the same leadership,” Capton told Variety shortly after the deal closed.
That doesn’t mean Capton isn’t looking to change some things. He says Plan B’s new chapter will include more TV and collaborations with Europe. Capton, a well-connected TV producer who launched Mediawan in 2015 with telco billionaire Xavier Niel and financier Matthieu Pigasse,
began talks with Plan B a year ago and engineered the deal which is expected to formally close in January. Under the pact, Plan B was paid half in shares of Mediawan and half in cash. The deal values Plan B at about $300 million.
Mediawan had already set a foot in the U.S. earlier this year with the launch of Blue Morning Pictures along with Osar-winning director Florian Zeller and Frederica Sainte-Rose.
Plan B Entertainment, which is run Dede Gardner, Jeremy Kleiner and Pitt, previously produced “The Departed,” “Moonlight” and “12 Years a Slave,” all of which won the Oscar for best picture. The company’s recent production credits include “She Said,” a look at the journalists and survivors behind breaking the Harvey Weinstein sexual abuse allegations, as well as Andrew Dominik’s “Blonde,” an off-beat drama about Marilyn Monroe.
What’s the starting point of this alliance between Plan B and Mediawan?
After consolidating in Europe for the last five years and bringing the best creative talents under the same banner we had to address an even bigger demand and have the possibility to export our European talents. A bit like Florian Zeller has done so successfully. The demand for premium global content has never been higher, especially from the U.S. Right now we have three series projects being developed with U.S. networks. We figured the timing was great to have a real presence in the U.S. But it only made sense if we could create a partnership with the best production company, one that matched the creative DNA of Mediawan and with whom we had a great fit on a personal level. Very quickly we thought of Plan B. The first talks between the Plan B team, Brad, and Mediawan began a year ago, and several meetings took place in Europe and California. Right away we had the desire to partner up at a time when things are moving very fast. Our common DNA, our desire to create, our need for independence made us think that we were meant to be working together.
Plan B is known for producing prestige movies that are often politically-minded. Will this editorial line continue at Plan B?
Yes it will. Like we’ve done with other production companies in Europe, Plan B will maintain a full editorial and artistic independence. The only things that Mediawan will bring them are the tools to create better together, as well as European talents and story ideas.
“She Said” flopped at the box office. How are you going to ensure that Plan B become more commercially profitable?
We’ll have the same strategy that we have in Europe with Mediawan, meaning that we’re going to focus on production and Plan B as well. So we’re working with all kinds of partners who buy our content and the demand for quality content is extremely strong. And “She Said” is exactly that.
What type of synergies do you envision between Plan B and Mediawan?
We’re going to open the doors of Europe to them and introduce them to European talents. More and more European filmmakers are now moving to Hollywood to work there and have the ambition to make bigger, more global films or TV series because it can be more complicated to achieve that in France. So we want to open that market for them, and also look at projects initiated by Plan B to see if some them would make more sense to produce out of Europe.
Who are some European filmmakers that Plan B is interested in working with?
It’s too soon to discuss it since the closing of the deal will happen in January, but clearly someone like Florian Zeller – with whom we created Blue Morning Pictures in the U.S. — is enormously talented and I know that the team at Plan B has a lot of respect for his work, and it’s mutual. So there will undoubtedly be things to put in place on that front. What I would like is that in the next months, or weeks,
to introduce them to new filmmakers, talents, screenwriters from Europe and also from Africa where we’re present, to see how we can all work together. That’s my priority today, to go find tomorrow’s talents and give them the access to create global content.
What’s the stake of Mediawan in Plan B and what’s stake of Plan B in Mediawan?
We didn’t give figures but what’s certain is that we are taking a majority stake in Plan B and Plan B shareholders now have a stake in Mediawan. So it’s not a financial deal. I think Plan B could have made plenty more money if they had sold to a studio or an investment fund, and I think we could welcomed many other shareholders into Mediawan. The idea with this deal was really to build a creative alliance so that in the years to come we will create value through content. That’s an interesting challenge, one that is based on creativity, not on money.
When you talk about content that would like to make with Plan B, can you give some examples?
For instance the way Plan B made the movie “Blonde” and gave the keys to Andrew Dominick from the start to follow his vision all the way is very inspiring. It made want to say that we’re also capable of supporting and championing talents in the same way. That’s what we’re building with Florian Zeller and with others, for instance Christophe Charrier who made his first series with us and won a prize at La Rochelle Fiction festival and directed his first film for Arte and Netflix, and ranks among the platform’s global hits. So we’re not thinking in terms of how can we make the biggest budgeted movies and make the most money, but rather how can we work with the most promising and the best filmmakers to create films that will mark us and stay. And I’d like to add that Plan B is the independent production company with the most Oscar nominations and wins.
Plan B has an impressive track record. But even though they make great films,
they don’t own the underlying intellectual property. Will that change?
That’s one of the strategic aspects that we’re going to pursue, meaning that
once in a while we’ll look to finance content in order to keep 100% of their IP.
Is Brad Pitt and the leadership of Plan B going to stay in place?
What will change is that we’re going to launch a dedicated U.S. division that will be chaired by Vania Schlogel (the managing partner and founder of Atwater Capital which backs Mediawan along with KKR), and I will be the CEO to pursue our development in the U.S. and make sure that we’re doing much more than being a stakeholder. We want to do in the U.S. what we’ve done in Europe: aggregate the most exciting independent talents while keeping our European DNA.
Brad Pitt is currently being sued by Angelina Jolie, who is accusing him of physical and emotional abuse during a trip on a private plane in 2016. Do you have any comment?
I have no comment to make on this.
Few French companies have succeeded in breaking through in the U.S. — Gaumont made it, but others like EuropaCorp and Canal Plus Group failed.
It’s funny because before we made this deal everybody reminded me what happened with EuropaCorp and Canal Plus. But we’re talking about an era that people under 20 have not even heard of. Today, the content market is global, and 15 or 20 years ago the content market was local so it was a very different world. Now we have French talents like Omar Sy, Florian Zeller or Louis Letterier who are behind huge machines in the U.S. So what I’m focusing on now is a strategy for the years to come, for the future, in order to allow my group to grow and thrive. And I’m not a theatrical distributor like EuropaCorp was at some point, and I didn’t buy Universal like Jean-Marie Messier (the former boss of Canal+ parent company Vivendi) did at the time. I’m not making a deal with a company who hires 4,000 people. I’m in business with Plan B and its three founders. We’re doing something where we’ll be able to talk to each others regularly and keep our respective DNA. Everybody’s talking about what we did because we set a foot in the U.S. with the biggest star in the world but the reality is that we’ve essentially brought together like-minded producers.
Is Plan B going to produce more TV going forward?
They’ll certainly produce more series, that was part of their strategic ambition.
Are you going to move to Los Angeles?
Over the next couple years I’m going to be spending much more time there to build solid bridges between Europe and the U.S.
Founded in 2015 as a SPAC by French TV producer Pierre-Antoine Capton, telecom billionaire Xavier Niel and Centerview Partners banker Matthieu Pigasse, Mediawan’s businesses range from TV to cinema production and content distribution. The deal with Plan B allows the firm to expand beyond its core European market.
“As we enter the next chapter in our evolution, we are excited at the possibilities this partnership affords as we maximize our reach toward an increasingly global audience with a broad range of films and television series across all platforms, genres, and mediums,” Pitt, Gardner and Kleiner said in the statement.
Last year, Reese Witherspoon sold a majority stake in her Hello Sunshine operation to a Blackstone-backed media venture led by Walt Disney Co. veterans in a deal that valued the business at $900 million. A production company created by LeBron James was valued at $725 million in the sale of a minority stake to RedBird Capital Partners, Nike Inc. and Epic Games Inc.
A year ago, Hollywood watched in despair as Oscar-oriented films like “Licorice Pizza” and “Nightmare Alley” flatlined at the box office. The day seemed to have finally arrived when prestige films were no longer viable in theaters and streaming had forever altered cinema.
But studios held out hope, deciding that November 2022 would give a more accurate reading of the marketplace. By then, the coronavirus would not be such a complicating factor. This fall would be a “last stand,” as some put it, a chance to show that more than superheroes and sequels could succeed.
It has been carnage.
One after another, films for grown-ups have failed to find an audience big enough to justify their cost. “Armageddon Time” cost roughly $30 million to make and market and collected $1.9 million at the North American box office. “Tár” cost at least $35 million, including marketing; ticket sales total $5.3 million. Universal spent around $55 million to make and market “She Said,” which also took in $5.3 million. “Devotion” cost well over $100 million and has generated $14 million in ticket sales.
Even a charmer from the box office king, Steven Spielberg, has gotten off to a humdrum start. “The Fabelmans,” based on Mr. Spielberg’s adolescence, has collected $5.7 million in four weeks of limited play. Its budget was $40 million, not including marketing.
What is going on?
The problem is not quality: Reviews have been exceptional. Rather, “people have grown comfortable watching these movies at home,” said David A. Gross, a film consultant who publishes a newsletter on box office numbers.
Ever since Oscar-oriented films began showing up on streaming services in the late 2010s, Hollywood has worried that such movies would someday vanish from multiplexes. The diminishing importance of big screens was accentuated in March, when, for the first time, a streaming film, “CODA” from Apple TV+, won the Academy Award for best picture.
This is about more than money: Hollywood sees the shift as an affront to its identity. Film power players have long clung to the fantasy that the cultural world revolves around them, as if it were 1940. But that delusion is hard to sustain when their lone measuring stick — bodies in seats — reveals that the masses can’t be bothered to come watch the films that they prize most. Hollywood equates this with cultural irrelevancy.
Sure, a core crowd of cinephiles is still turning out. “Till,” focused on Mamie Till-Mobley, whose son, Emmett Till, was murdered in Mississippi in 1955, has collected $8.9 million in the United States and Canada. That’s not nothing for an emotionally challenging film. “The Banshees of Inisherin,” a dark comedy with heavily accented dialogue, has also brought in $8 million, with overseas ticket buyers contributing an additional $20 million.
“While it is clear the theatrical specialty market hasn’t fully rebounded, we’ve seen ‘The Banshees of Inisherin’ continue to perform strongly and drive conversation among moviegoers,” Searchlight Pictures said in a statement. “We firmly believe there’s a place in theaters for films that can offer audiences a broad range of cinematic experiences.”
Still, crossover attention is almost always the goal, as underlined by how much film companies are spending on some of these productions. “Till,” for instance, cost at least $33 million to make and market.
And remember: Theaters keep roughly half of any ticket revenue.
The hope is for results more in line with “The Woman King.” Starring Viola Davis as the leader of an all-female group of African warriors, “The Woman King” collected nearly $70 million at domestic theaters ($92 million worldwide). It cost $50 million to produce and tens of millions more to market.
Oscar-oriented dramas rarely become blockbusters. Even so, these movies used to do quite well at the box office. The World War I film “1917” generated $159 million in North America in 2019 and $385 million worldwide. In 2010, “Black Swan,” starring Natalie Portman as a demented ballerina, collected $107 million ($329 million worldwide).
Most studios either declined to comment for this article or provided anodyne statements about being proud of the prestige dramas they have recently released, regardless of ticket sales.
The unwillingness to engage publicly on the matter may reflect the annual awards race. Having a contender labeled a box office misfire is not great for vote gathering. (Oscar nominations will be announced on Jan. 24.) Or it may be because, behind the scenes, studios still seem to be grasping for answers.
Ask 10 different specialty film executives to explain the box office and you will get 10 different answers. There have been too many dramas in theaters lately, resulting in cannibalization; there have been too few, leaving audiences to look for options on streaming services. Everyone has been busy watching the World Cup on television. No, it’s television dramas like “The Crown” that have undercut these films.
Some are still blaming the coronavirus. But that doesn’t hold water. While initially reluctant to return to theaters, older audiences, for the most part, have come to see theaters as a virus-safe activity, according to box office analysts, citing surveys. Nearly 60 percent of “Woman King” ticket buyers were over the age of 35, according to Sony Pictures Entertainment.
Hollywood considers anyone over 35 to be “old,” and this is who typically comes to see dramas.
Maybe it is more nuanced? Older audiences are back, one longtime studio executive suggested, but sophisticated older audiences are not — in part because some of their favorite art house theaters have closed and they don’t want to mix with the multiplex masses. (He was serious. “Too many people, too likely to encounter a sticky floor.”)
Others see a problem with the content. Most of the movies that are struggling at the box office are downbeat, coming at a time when audiences want escape. Consider the successful spring release of the rollicking “Everything, Everywhere All at Once,” which collected $70 million in North America. Baz Luhrmann’s bedazzled “Elvis” delivered $151 million in domestic ticket sales.
“People like to call it ‘escape,’ but that’s not actually what it is,” Jeanine Basinger, the film scholar, said. “It’s entertainment. It can be a serious topic, by the way. But when films are too introspective, as many of these Oscar ones now are, the audience gets forgotten about.
“Give us a laugh or two in there! When I think about going out to see misery and degradation and racism and all the other things that are wrong with our lives, I’m too depressed to put on my coat,” continued Ms. Basinger, whose latest book, “Hollywood: The Oral History,” co-written with Sam Wasson, arrived last month.
Some studio executives insist that box office totals are an outdated way of assessing whether a film will generate a financial return. Focus Features, for instance, has evolved its business model in the last two years. The company’s films, which include “Tár” and “Armageddon Time,” are now made available for video-on-demand rental — for a premium price — after as little as three weeks in theaters. (Before, theaters got an exclusive window of about 90 days.) The money generated by premium in-home rentals is substantial, Focus has said, although it has declined to provide financial information to support that assertion.
The worry in Hollywood is that such efforts will still fall short — that the conglomerates that own specialty film studios will decide there is not enough return on prestige films in theaters to continue releasing them that way. Disney owns Searchlight. Comcast owns Focus. Amazon owns United Artists. The chief executives of these companies like being invited to the Oscars. But they like profit even more.
“The good news is we’ve now got a very large streaming business that we can go ahead and redirect that content toward those channels,” Bob Chapek, Disney’s former chief executive, said at a public event on Nov. 8, referring to prestige films. (Robert A. Iger, who has since returned to run Disney, may feel differently.)
Others continue to advocate patience. Mr. Gross pointed out that “The Fabelmans” will roll into more theaters over the next month, hoping to capitalize on awards buzz — it is a front-runner for the 2023 best picture Oscar — and the end-of-year holidays. Damien Chazelle’s “Babylon,” a drug-and-sex induced fever dream about early Hollywood, is scheduled for wide release on Dec. 23.
“I think movies are going to come back,” Mr. Spielberg recently told The New York Times. “I really do.”
