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Showing posts with label studios. Show all posts
Showing posts with label studios. Show all posts
Wednesday, January 2, 2013
film bits
From ComingSoon.net
Sony Pictures No. 1 in Marketshare for 2012
January 2, 2013Sony Pictures Entertainment ended 2012 with the studio's biggest year ever as their films generated $4.440 billion. The studio ended the year #1 in domestic and worldwide marketshare industry wide. Twentieth Century Fox Film was #1 in 2012 internationally.
Sony Pictures hit all time highs with $1.768 billion in domestic ticket sales and $2.672 billion internationally. The 23rd James Bond film Skyfall was Sony's top film, earning over $1 billion worldwide. It was followed by The Amazing Spider-Man's $752.2 million and Men in Black 3's $624 million. Also performing well for the studio were Hotel Transylvania ($312.6 million worldwide), 21 Jump Street ($201.6 million), Total Recall ( $198.5 million) and The Vow ($196.1 million).
Second place in worldwide and domestic marketshare belonged to Warner Bros. Pictures, which earned $4.25 billion, while Fox came in at No. 3 with $3.7 billion. Of that, Fox's international take was $2.72 billion.
Walt Disney Pictures earned $3.6 billion worldwide for fourth place, Universal Pictures followed in fifth with $3 billion, and Paramount ended up in sixth with $2.4 billion.
Saturday, November 3, 2012
Box Office & Profits
From Columbia Journalism Review
Cover Story — November / December 2012
Gross misunderstanding
What journalists miss about the movie business
The vast preponderance of news reporting about Hollywood concerns the weekly box-office race. It is offered free to the media every Sunday afternoon by Nielsen EDI at a low point in its news cycle, packaged with punning headlines and quotes by industry sources, so it can be reported as if it were a high-stakes horse race. In fact, it is, to borrow Daniel Boorstin’s concept, a weekly pseudo-event whose sole purpose is to garner media attention.
Once upon a time, six decades ago, such box-office numbers were critical to the fortunes of Hollywood. The major studios then owned most of the large theater chains and made virtually all of their profits from ticket sales at their own theaters. But as of the late 1940s, antitrust rulings forced the Hollywood studios to divest their theaters, and the theater business evolved into multiplex chains that the studios did not control. As television, home video, pay cable, DVDs, and now streaming have become ubiquitous in American homes, the studios have radically changed their business model, moving their profit centers from the large to the small screen, making the box-office race less relevant.
Even the numbers themselves are misleading. The reported “grosses” are not those of the studios but the projected sales of tickets at the movie houses in the US and Canada (which is counted by Hollywood as part of the US). Whatever the amount actually is, movie houses remit about 50 percent to the movie distributor, which then deducts, off the top, its out-of-pocket costs, which includes advertising, prints, insurance, local taxes, and other logistical expenses. For an average big-studio movie, these costs now amount to about $40 million—so, just to stay in the black, a movie needs $74 million in ticket sales. Many films don’t make that much, and even those that do may not be profitable. For example, Disney, which hailed as a great success the nearly quarter-billion-dollar “gross” of its movie Gone In 60 Seconds (released in 2000), wound up with only $11.6 million from theaters, and since the movie cost $103.3 million to make, its theatrical run ended up in the red. This is not uncommon. Most Hollywood movies nowadays actually lose money at the American box office and make it from ancillary markets.
Meanwhile, the outcome of the box-office race has little importance to theater owners these days, because each of the major multiplex chains books all of the studios’ wide-release movies. Their only concern is the total number of people who show up and how much popcorn, candy, and soda they buy, since that’s where their real profit comes from. In numerical terms, the movie-going audience has been shrinking since 1948.
The studios focus on the cumulative revenue their movies take in over many platforms, including both domestic and foreign movie houses, DVD stores, pay-TV output deals, and TV licensing. Even though its ancillary benchmarks can be higher when a movie is No. 1 at the box office, the film can still fare very badly in its cumulative results. Consider Paramount’s 2005 adventure film Sahara (and here I should disclose that I served as an expert witness in a lawsuit involving its finances). Although it was No. 1 at the opening-weekend box office, it is one of the biggest money-losers in history. Based on a Clive Cussler best seller, the film cost $160 million to produce and $81 million to distribute, and wound up losing $78.3 million. On the other hand, some movies that finish at the bottom of the weekly pile, such as Woody Allen’s Midnight in Paris, Wes Anderson’s Moonrise Kingdom, and Darren Aronofsky’s Black Swan, can ultimately take in more money than movies that finish ahead of them.
It certainly helps to be first on a weekend, but not all weekends are equally valuable. There are holiday weekends that can produce as much as 10 times the revenue as those in the slack season (when teenagers return to school). A Fourth of July second- or third-place movie can take in far more than a first-place finisher in October, since the total pie is so much larger. And films that open in the summer, no matter where they finish, will also earn more than fall films from Christmas DVD sales—due to the usual four-to-five-month embargo on the release of movies on DVD, summer films become fresh product on the market at holiday time.
Even in the era of global marketing campaigns, the US box office does not necessarily affect foreign revenues, which now are more important than the domestic take. For major movies, such as Avatar, more than 70 percent of the theatrical revenue is now earned overseas.
Nor does the box-office race provide an accurate measure of popular taste, since it lumps together movies that open on thousands of screens with those that choose to open on a few dozen screens, hoping to build gradually, benefitting from good reviews and strong word-of-mouth. Take, for example, Moonrise Kingdom, which opened on May 25, 2012, in only four theaters in two cities, and finished in 15th place, while Men in Black 3, which was first, was booked on 4,248 screens. Indeed, when studio marketing departments want to know the actual audience appeal of a movie, they track the per-screen average, the drop-off between Friday night (when there is no word-of-mouth) and Sunday, and the percentage drop after the first and second week. MIB3 was all but dead after three weeks, while Moonrise Kingdom moved to 924 theaters, and was still drawing audiences in late September, the 19th week of its run.
What a box-office victory actually measures is the breadth of the opening and the efficacy of the studio’s marketing arm: In other words, based on a barrage of 30-second TV commercials containing snippets of the film, which most moviegoers will have seen an average of seven times that week, how many people will show up on Friday night? This is a job the studios do amazingly well, but it has little to say about the intrinsic appeal of the movie.
To be sure, the race produces bragging rights every week for the winning studio’s marketing department, which then exploits the “No. 1” title in newspaper ads (for which studios spend, on average, about $4 million per title). And of course the publicity derived from this game further enhances the studios’ revenue.
But why does the media play along in the promotion? Generally, it is the only “news” available in the entertainment news cycle surrounding the opening. Any real digging into the economics of a movie takes considerable time, since the studios tightly seal all relevant information, such as the terms of distribution deals, financing, subsidies, and stars’ compensation, through Non-Disclosure Agreements. Even extras at times must sign NDAs (as I found out when I was an extra in Wall Street: Money Never Sleeps). By the time the economic picture becomes clear, if indeed it ever does, the news value of the project has faded.
At the same time, the media’s fixation on the box-office race diverts its attention from the ongoing transformation of Hollywood’s business. It neglects the reality that today, the six major studios get less than 20 percent of their total revenue from showing their films in American movie houses. Most of their money comes from another, nearly invisible source: licensing their intellectual properties.
Each studio has a vast library of thousands of movies, animated shorts, and TV series it licenses out to worldwide cable networks, pay-per-view TV, and broadcast television. A top executive at Time Warner recently did the math for me, demonstrating that between 85 and 90 percent of its entertainment earnings comes from licensing its movie and TV titles to television; it is more or less the same story at the four other largest studios. (Paramount, because it ceded its television production arm to CBS when they split, is the only major studio without a television production arm.)
The reason that licensing is so immensely profitable is that studios do not have to pay advertising, print, or logistical costs, as they do when distributing a movie to theaters. Almost all money received—except for residuals paid to actors’ and others’ guild pension plans—goes to the bottom line. The same is true with the new business of licensing products to Internet companies, such as Hulu, Netflix, Apple’s iTunes Store, and Amazon, for streaming.
The continued cranking of this money machine depends on the studios’ retaining absolute control over these intellectual properties—a requisite that, given the threat of digital piracy, is reshaping strategies for how they release movies. For example, the studios’ entire system of “windows,” in which a film’s payoff is optimized by delaying for many months its release on video, pay television, and other platforms, may have to be compressed, if not entirely abandoned, to counter this threat. There is also new urgency to studios’ international diplomacy, since minimizing the availability of pirated copies requires the assistance of governments. No matter what political opinions their movie stars espouse, the corporate executives behind the scenes now must play nicely with those in power.
The screenwriter William Goldman famously explained the economics of Hollywood this way: Nobody knows anything. By focusing on the box-office race that is spoon-fed to them each week, journalists may entertain their audiences, but they are missing the real story. By neglecting the changing economics of Hollywood—and the politics that flow from it—they leave their audience, much like a movie audience, in the dark about what is really shaping Hollywood.
Tuesday, May 15, 2012
Fewer Big Studios at Cannes
Cannes: Few Hollywood Studios Marketing At Fest
The
Cannes Film Festival is often called the second most mediatized event
in the world, next to the Olympics. But you wouldn’t know it this year.
Cannes kicks off Wednesday night but it’ll be a low-key affair for most
of the major and minor Hollywood studios. Because it’s an expensive
place to set up shop with talent and teams in tow. I’ve heard estimates
that put the cost of a Cannes gala screening and fete from $1.5M to $3M.
So the studios think they get more bang for the, which is why Universal
staged a premiere in London Tuesday night for Snow White And The Huntsman, or Sony is holding several premieres in a host of territories for Men In Black III.
The feeling is that, if talent is available to go to a specific market,
a premiere there plus a press day will generate more publicity than a
similar event would at the Cannes fest. Then there’s the concern that
big movies can get buried in the Cannes cacophony. “It’s over in a day
and the next day they’re on to the next thing,” a top studio exec says.
Another explains, “There’s so much noise you can’t have a standalone
moment.”A few years back, if a big film’s release date fell anywhere from mid-May to mid-June, is was a safe bet it would pop up as a world premiere at the Palais. That’s changed. Sony Pictures Entertainment Chairman Amy Pascal was even in France for the Paris premiere of Men In Black III – and then flew to elsewhere in Europe instead of heading to Cannes with the film. Yet in 2006, Pascal and other studio bigwigs famously chartered a Eurostar train to bring the media junket from London to Cannes for The Da Vinci Code. The movie execs still shudder at the experience. ”It was a massive international hit as you know. But I can’t say the Cannes Festival experience was one we would be anxious to repeat,” one of the execs recalls.
In 2009, Disney made it snow on the Croisette for Robert Zemeckis’ A Christmas Carol. Expect no such extravagance this year. Universal’s Snow White And The Huntsman, Warners Bros’s Rock Of Ages and Magic Mike and The Dark Knight Rises, and Fox’s Prometheus won’t have any kind of promotional Cannes push. Instead there will be a big opening night party after Universal-owned Focus Features premieres Moonrise Kingdom on Wednesday. And DreamWorks Animation’s Madagascar 3: Europe’s Most Wanted is the only tentpole to have an official slot at the fest since the toon is set in Europe. Here’s a studio-by-studio look:
DREAMWORKS ANIMATION: The out-of-competition screening brings Jeffrey Katzenberg back to the Palais. So it’ll fall to DreamWorks Animation to bring the Hollywood hype. First thing in the morning on opening day, the global media will get a glimpse at footage from Rise Of The Guardians, a film not slated for release until November. A Q&A will also be held with cast members Alec Baldwin, Chris Pine, and Isla Fisher plus director Peter Ramsey as well as the author of the book in which the film is based, William Joyce. Later in the week, DWA is hosting a Hala Presentation of Madagascar 3L Escape to Europe with Katzenberg, the filmmakers, and cast in tow including Ben Stiller, Chris Rock, Jada Pinkett-Smith, David Schwimmer, Jessica Chastain, and Martin Short. The cast will also be completing international press while here, as well as a live interview with The Today Show on Friday. Fest general delegate Thierry Frémaux has been fond of calling DWA “a friend of the festival” ever since he scandalized Cannes traditionalists by including 2001’s Shrek in competition. He repeated the feat in 2004 with Shrek 2. In 2008, Frémaux gave Kung Fu Panda an official out of competition screening – and its sequel was screened last year. this year’s Cannes Film Festival.
PARAMOUNT: Paramount’s presence other than the DWA films it distributes will fall to The Dictator’s Admiral General Aladeen who’ll hold a press conference. Sacha Baron Cohen has been making the rounds as the eponymous character so he’s taking advantage of Cannes. Back in 2006, he caused a stir on the Croisette as Borat frolicking in the surf sporting his now infamous fluorescent mankini.
DISNEY: Last year, Disney premiered Pirates Of The Caribbean 4: On Stranger Tides out of competition at Cannes. But don’t expect a screening of footage from Pixar’s Brave even though the French voice cast is led by The Artist’s Berenice Bejo. Even though the studio did just show 30 minutes of Brave at CinemaCon. And even though Pixar opened the festival in 2009 with Up, Walt Disney Company France chief Jean-François Camilleri confirms the studio is sitting this fest out. “We have no new films or footage to show.” Instead, Disney/Pixar is having a huge Brave junket in Scotland on June 1st. Then a huge premiere back in LA after that. “What would Cannes accomplish? Awards? We’ve only ever taken one Pixar film there – Up, balloons and all - and still managed 6 best animated Oscars and 2 Best Pic noms.”
FOX: Execs don’t think Fox has promo’d a summer film at Cannes for at least half a dozen years. In the run-up to the announcement of the official selection, folks thought Ridley Scott’s Prometheus would come to the fest in or out of competition since the director opened Cannes two years ago with Universal’s Robin Hood. But I’m told that the prospect of Prometheus going to Cannes never came up for discussion at Fox. “There’s just no reason to. We can’t get a screen in a big enough venue unless it was in competition,” an insider explains. Instead Fox will stage the world premiere post-Cannes in London where the film has deep ties because it was shot at Pinewood.
SONY: Sony Pictures Entertainment isn’t pushing anything new at Cannes this year. Not even Men In Black III, which Will Smith is currently promoting on a tour of 8 countries in 10 days, with a big event planned for each like Monday night’s premiere for 10,000 people at the O2 Centre. Not even Amazing Spider-Man which will enjoy a similar push next month. “That’s much more bang for our buck/euro,” an SPE exec explains. However, SPE’s home entertainment division has put together a Cannes event to celebrate the 50th anniversary of Lawrence Of Arabia.
UNIVERSAL: Wes Anderson’s Moonrise Kingdom competition premiere coincides with the 10th anniversary of Focus Features in what will be the only Universal-related film to have a high-profile presence at the Palais. (Not counting a re-mastered version of Jaws screening in Cannes Classics). I’m told the decision not to push upcoming Universal pics like Battleship and Snow White And The Huntsman came down to timing. “I really think our global promotional and talent travel plan was best served by going earlier,” a top exec says. Instead, Uni premiered Snow White in London Monday night 3 weeks before its release after a huge junket this past weekend. And Battleship has been playing overseas for a month before its U.S. release.
WARNER BROS: “None of our films are ready for a debut in Cannes, including The Dark Knight Rises,” an exec explains. “We have a very big campaign planned. It’s also very early in the rollout. Cannes works best if you’re opening your movie right after or if you are launching a very long lead critical campaign.” Warner Bros typically doesn’t do much promotion at Cannes, so it won’t be trotting out Steven Soderbergh’s Magic Mike or its Tom Cruise-starrer Rock Of Ages from New Line. A concert with Cruise as Stacee Jaxx or a Magic Mike-themed pole-dancing party on a yacht would have been perfectly ‘Cannoise’, as they say. Even the French media strongly believed TDKR would receive promotion from Cannes. Nope.
LIONSGATE: Lionsgate/Summit will be pushing titles at the market, primarily Dirty Dancing, Catching Fire, and Red 2. ”Apart from selling films, we’re not taking anything to Cannes this year to promote. No reason other than nothing we have coming up is a ‘fit’ for Cannes in terms of timing.”
Friday, March 23, 2012
Studio Financing News
Financiers target $1.2 bil for studio pics
Anton Capital, StormHarbour seek to co-finance; eyeing Sony, U
As
Relativity Media's billion-dollar co-financing deals at Sony and
Universal draw to a close, finance groups Anton Capital Entertainment
and StormHarbour are in the early stages of assembling a fund to back
studio films.
Their target: $1.2 billion to shop to the majors, with the most serious eye toward Sony and U.
Sources with direct knowledge of the potential fund caution that discussions are very preliminary: Anton and StormHarbour are in the fund-raising process, and neither Sony or Universal is in negotiations. Sony, Anton and Universal declined to comment; StormHarbour did not return emails.
Anton and StormHarbour made headlines at the end of last year by backing a $200 million fund with pan-European film group Studiocanal, coin that funded several pics including "Tinker Tailor Soldier Spy" and will contribute to the Coen brothers' "Inside Llewyn Davis."
For the past few years, most majors have opened their portfolios to potential partners, as pressure from corporate parents has pushed the studios to lessen their risk on big-budget fare. With the Relativity-arranged Beverly I and Beverly II vehicles either done or almost finished financing films at Sony and Universal, both studios have actively discussed bringing in new money.
And while fund talk may be early, many observers say that Anton and StormHarbour are closer than other groups that have come and gone through studio doors in recent months. Many investors have taken meetings, but few have materialized the cash to back up a big-budget partnership.
Chinese funds, for example, have made more headlines than movies in the past year. While Hollywood is aggressively looking to break into the mainland marketplace, few high-profile announcements have yielded tangible partnerships or films, especially at the major or mini-major level.
And while investors from all over the globe court Hollywood on a regular basis, co-financing deals at the studios look a lot different than they did a few years ago.
Lawsuits, the credit crunch and slipping home video numbers have made expensive slate arrangements less palatable. Instead of half-billion-dollar pacts to blindly fund dozens of pictures, many investors have put together smaller pacts with studios for select films.
In August, equity fund Hemisphere partnered with Sony for three of the studio's tentpoles (one of which was co-financed by Paramount as well), while David Elllison's Skydance Productions pacted with Paramount in 2009 for select big-ticket tenptoles.
That would make a $1.2 billion co-financing fund even more interesting.
Beverly II, which Relativity arranged at U in 2008 with backing from hedge fund Elliott Management, will fund films greenlit through the end of 2012, although the overall deal expires in 2014.
Under terms of the arrangement, Elliott funds about half the budgets of 75% of U's films each year. And while U had some home runs in 2011, like "Fast Five" and "Bridesmaids," Elliott smarted from a number of disappointments, including "Cowboys & Aliens." Beverly II also didn't participate in "Fast Five," which grossed more than $600 million worldwide.
Relativity arranged Beverly I at Sony in 2007. Funded more than 17 films, including hits like "Salt," "The Social Network" and "Grown Ups," through that arrangement, although the package also included misfires like "Did You Hear About the Morgans?"
Sources with direct knowledge of the potential fund caution that discussions are very preliminary: Anton and StormHarbour are in the fund-raising process, and neither Sony or Universal is in negotiations. Sony, Anton and Universal declined to comment; StormHarbour did not return emails.
Anton and StormHarbour made headlines at the end of last year by backing a $200 million fund with pan-European film group Studiocanal, coin that funded several pics including "Tinker Tailor Soldier Spy" and will contribute to the Coen brothers' "Inside Llewyn Davis."
For the past few years, most majors have opened their portfolios to potential partners, as pressure from corporate parents has pushed the studios to lessen their risk on big-budget fare. With the Relativity-arranged Beverly I and Beverly II vehicles either done or almost finished financing films at Sony and Universal, both studios have actively discussed bringing in new money.
And while fund talk may be early, many observers say that Anton and StormHarbour are closer than other groups that have come and gone through studio doors in recent months. Many investors have taken meetings, but few have materialized the cash to back up a big-budget partnership.
Chinese funds, for example, have made more headlines than movies in the past year. While Hollywood is aggressively looking to break into the mainland marketplace, few high-profile announcements have yielded tangible partnerships or films, especially at the major or mini-major level.
And while investors from all over the globe court Hollywood on a regular basis, co-financing deals at the studios look a lot different than they did a few years ago.
Lawsuits, the credit crunch and slipping home video numbers have made expensive slate arrangements less palatable. Instead of half-billion-dollar pacts to blindly fund dozens of pictures, many investors have put together smaller pacts with studios for select films.
In August, equity fund Hemisphere partnered with Sony for three of the studio's tentpoles (one of which was co-financed by Paramount as well), while David Elllison's Skydance Productions pacted with Paramount in 2009 for select big-ticket tenptoles.
That would make a $1.2 billion co-financing fund even more interesting.
Beverly II, which Relativity arranged at U in 2008 with backing from hedge fund Elliott Management, will fund films greenlit through the end of 2012, although the overall deal expires in 2014.
Under terms of the arrangement, Elliott funds about half the budgets of 75% of U's films each year. And while U had some home runs in 2011, like "Fast Five" and "Bridesmaids," Elliott smarted from a number of disappointments, including "Cowboys & Aliens." Beverly II also didn't participate in "Fast Five," which grossed more than $600 million worldwide.
Relativity arranged Beverly I at Sony in 2007. Funded more than 17 films, including hits like "Salt," "The Social Network" and "Grown Ups," through that arrangement, although the package also included misfires like "Did You Hear About the Morgans?"
Contact Rachel Abrams at
Rachel.Abrams@variety.com
Wednesday, March 14, 2012
Studio Math
John Scalzi on Scifi
Today's question, about last week's unfortunately-not-big science fiction film:
I read that in order for John Carter to turn a profit, it would have to make something like $600 million at the box office. But the movie only cost $250 million to make. Why does it have to take in so much more to make money?
I read that in order for John Carter to turn a profit, it would have to make something like $600 million at the box office. But the movie only cost $250 million to make. Why does it have to take in so much more to make money?
Leaving aside the amusing irony of the word "only" in regards to a film with a $250 million production budget, this is a fair question. To answer it, we need to follow the money. When you pay your $7.83 (on average in the U.S.) for your movie ticket to see a science fiction (or other type of) film, what happens to the money? Well:
1. Some of it stays with the theater -- although how much depends on what week it is. The first week a film comes out, a distributor will take up to 95% of the box office gross, minus a small flat fee to help cover the cost of running the theater. The second and additional weeks the theater is usually allowed to keep more of the ticket cost, but of course generally speaking each additional week a film is out, the less money comes through the door. That said, some rare films bring significant amounts of money week in and week out; it took Avatar nine weeks to take in less than $30 million a week at the box office.
For Hollywood, the perfect film would run one week in the theaters and makes $300 million; for theater owners, the perfect film would make the same amount of money over the course of three months. This slicing of first-weekend grosses explains a) why Hollywood spends so much to get you into the theater that very first week, and b) why movie concessions are so damn expensive -- because it's the popcorn and soda that keeps the theaters profitable, not the films.
2. After the theater takes its cut, you might think the rest of the money goes back to the film studio -- and sometimes it does, if the film studio is also the distributor of the film, i.e., the company that makes sure copies of the film get to the theater (and later, get out to physical and digital stores for home video sales). If the studio is not the distributor, however, the distributor gets a slice of the profits, the amount varying according to the deal the studio cuts with the distributor. For example, the studio behind the Star Wars prequel trilogy was LucasFilm; 20th Century Fox merely handled the distribution, for which it received a modest fee (relatively speaking).
To avoid this cut, most major studios also have distribution arms, particularly in the domestic market. They also often have international distribution companies, but that arena is complicated both by local laws (some countries require films to be distributed by local distributors) and by business -- studios might choose to sell distribution rights for upcoming films upfront in exchange for cash, which then gets funneled into the production cost. This lowers the studio's financial exposure but also means they'll lose out if the film is a big hit internationally.
3. In addition to the theaters and the distributors, studios also have to pay profit participants -- producers, directors, and actors whose payment is a percentage of the profit, not just a flat fee. This is sometimes "gross participation" -- in which payment is based on box office receipts, not what comes back to the studio -- but those deals are more rare today than they used to be. Nevertheless, these deals can scrape tens of millions off what the studio can claim for its own at the end of the day, particularly if a big star or director is involved. Steven Spielberg, for example, is rumored to have made a quarter billion dollars off of Jurassic Park, mostly through gross and profit participation.
Add it all up and movie studios, which bear most of the cost of producing a film, will see about half of the box office take come back to them, from which they will need to recoup production costs as well as marketing costs, which can run into the tens of millions of dollars. Bear in mind that the specific calculus on each film is going to be different -- the math on The Avengers, with its big budget, cast of stars, big-name director, and complicated back end (Marvel is owned by Disney), is going to be different than the math on The Hunger Games, which features no "A"-list stars or director, and a relatively modest $75 million budget -- but the studio getting half back is a decent rule of thumb.
Another decent rule of thumb: For a film to eventually be (financially) successful, it should probably make back its production cost in the domestic market, which will hopefully allow for the international markets (and then home video) to carry it into the black. This works especially well with science fiction and fantasy films, which now often make something like two-thirds of their box office overseas.
And now we see why $600 million is not actually an outrageous number for John Carter's profitability -- and won't be a bad number for The Avengers either, which apparently cost between $220 and $260 million. Those are crazy numbers, but when they pay off, they pay off big.
Friday, February 24, 2012
Variety on Film & Studio Financing
Posted: Fri., Feb. 24, 2012, 8:25am PT
Studios finding fewer slate deals
Moneymen bargin for more dough, more control
Slate financing has a PR problem.
Lawsuits, the credit crunch and a number of films that didn't return
the kind of money investors expected have all made studio slate deals
less palatable. And with the recent or near-end of several high-profile
arrangements, the question now is whether new money will be in place by
the time the old coin runs out -- and whether the majors really need
the capital at all.
Any new deal, however, will likely look a lot different than the majority of slate arrangements locked down between 2005 and 2008.
"The biggest challenge in getting a traditional slate financing deal done today is that significant losses were experienced (over the past decade), which has caused equity and subordinated capital providers to pull back," says Christa Thomas, managing director and senior film adviser in SunTrust's Private Wealth Management Sports & Entertainment Specialty Group. "The changing technology landscape, especially for home entertainment, has further eroded confidence around risk assessment and mitigation."
And that's caused financiers to demand more from Hollywood and to broker deals that add on many more layers and deal points.
In the past, many moneymen blindly financed slates of films they didn't pick themselves. Their cash often covered 50% of the budgets on dozens of pics that ranged in degree of risk. Now, many co-financing arrangements involve fewer films and allow studio partners like David Ellison's Skydance Prods. and Jeff Sagansky's Hemisphere, for example, to have more leverage in choosing which films to partner on -- especially among tentpoles.
"The old slate deals were just a blunderbuss," says Stroock & Stroock & Lavan partner Schuyler Moore. "The real story is, it's just not happening (anymore) … now what you're doing is identifying your films going in."
That's because investors want more safeguards. They often want the chance to recoup a portion of their investment before the studio takes its fees, or they want to get their money back before the talent gets it backend.
But the question of which concessions the majors will or won't make won't be answered until more slate arrangements are assembled -- something that seems much less likely than in years past.
Co-financing arrangements can take months to close, and the majors are always in discussions with investors to explore opportunities. While these deals aren't essential to keep the lights on, most studios prefer to mitigate risk on all but their highest-profile franchises.
But when one door closes, another opens. As studios produce fewer of their own films, that provides room for distribution agreements with companies that have financed commercial projects -- like the deals Universal inked with Cross Creek and MRC last year. Cross Creek's Ron Howard-helmed "Rush" will mark the former pact's first release, while MRC currently has Seth MacFarlane's "Ted" in post-production.
While banks may be willing to lend, many observers wonder when equity will come back into the film-financing market. As a result, funds have turned their eyes overseas, particularly to China, India and elsewhere in Asia. Hemisphere's coin, for example, came in large part from Japan's Toho-Towa Co. and Kadokawa Shoten, and Korea's Lotte Cinema.
Paramount, Warner Bros. and Fox all have co-financing deals in place, while Disney is the studio outlier. Credit Suisse First Boston arranged $500 million in funding for the Mouse House's Kingdom deal in 2005 (the studio's first co-financing arrangement in a decade), but that pact ended in 2009.
Sony was able to fund 18 films, including hits like "Salt," "The Social Network" and "Grown Ups," through its Beverly I slate-selection arrangement. While the package also included misfires like "Did You Hear About the Morgans?," the pics overall grossed more than $2.6 billion worldwide.
Prior to 2008, estimates for a pic's overall performance counted in large part on homevideo sales, which often matched or even doubled worldwide box office grosses. That set expectations high for slate performances, and those expectations have been difficult to meet in recent years because of the decline in DVD dollars.
Aramid Entertainment Fund, an investor in the Beverly I slate, sued Relativity and hedge fund Fortress in February over its stake in the deal. The suit didn't name Sony or accuse the studio of any wrongdoing, but Aramid's very public unhappiness with its deal adds to the negativity surrounding these types of arrangements.
But money is always knocking at the studio gates, some of it more real, some of it less. As Variety first reported in August, Sony secured financing for three of its tentpoles from Hemisphere ("The Smurfs," "Men in Black III" and "The Adventures of Tintin," the latter of which was also co-financed by Paramount), and the studio is always talking to investors about other potential opportunies.
Any discussions Universal is having with potential financiers comes in advance of the end of its own co-financing deal.
Beverly II, arranged by Ryan Kavanaugh's Relativity Media and backed by Elliott Management in 2008, will fund films greenlit through the end of 2012, although the overall deal expires in 2014.
Under terms of the arrangement, Elliott funds about half the budgets of 75% of U's films each year. And while U had some home runs in 2011, with hits like "Fast Five" and "Bridesmaids," and this year with "Safe House," the studio is still smarting from a string of modest to disappointing performers (including "Cowboys & Aliens," in which Relativity participated) over the past few years.
Relativity can select films for Elliott, but it's not clear whether U's whole slate is open to them. Either way, Beverly II did not participate in "Fast Five," which wound up grossing more than $600 million worldwide to become the "Fast and the Furious" franchise's top grosser -- one very big missed opportunity.
Across town, Paramount's major co-financing arrangement comes from Ellison's Skydance. The two partnered in 2009 for a four-year deal that would allow Skydance to co-finance four to six of the studio's pics per year, including "Mission: Impossible -- Ghost Protocol," "Star Trek 2," "World War Z" and "G.I. Joe: Retaliation" through Skydance's $350 million fund (with a $200 million credit line arranged by JPMorgan Chase). Melrose II, a $300 million slate deal arranged by Dresdner Bank in 2006, wrapped up in 2008, although it still enables Melrose II investors to put money into sequels whose originals they also financed -- provided that the studio releases those pics by 2016. Any new investors would not have access to films included in the Skydance or Melrose II deal.
In November, investors in Melrose II filed a suit against the studio over profits to more than 29 films (including "Mission: Impossible III," "Charlotte's Web," "Dreamgirls," "Blades of Glory," "Jackass 2" and all three "Transformers" films).
Fox's pact with Dune, renewed in 2010, marks one of the longest-standing co-financing relationships at any of the studios. Dune began funding Fox movies, including boffo pics like "Avatar" and "Live Free or Die Hard," in 2005, and the pact's longevity and multiple renewals suggest Dune's contentment with its deal. Additionally, Fox has capital coming in from partners including New Regency and Ingenious, the latter of which has been on the Fox lot since 1998.
Meanwhile, Warner Bros. is set for the near future. Its two major investors, Village Roadshow and Legendary Entertainment, both secured new credit lines within the past two years. Village Roadshow closed a $1 billion facility in 2010, while Legendary wrapped up a $600 million-plus facility last April.
Ultimately, whether they have co-financing coin or not, the studios are always in discussions with potential investors, and always considering new financing arrangements.
"All of the studios today are divisions of much larger conglomerates," says Lindsay Conner, partner at Manatt, Phelps & Phillips. "Gone are the days when one mogul owned a big share of a studio, and that was the main business of the company. Today, they're all part of larger businesses, and it's a common and appropriate corporate practice to spread the risk of all expensive new initiatives." What: Slate financiers demand more control over projects. The takeaway: As studios mitigate risk, they must cede some control to the moneymen.
Any new deal, however, will likely look a lot different than the majority of slate arrangements locked down between 2005 and 2008.
"The biggest challenge in getting a traditional slate financing deal done today is that significant losses were experienced (over the past decade), which has caused equity and subordinated capital providers to pull back," says Christa Thomas, managing director and senior film adviser in SunTrust's Private Wealth Management Sports & Entertainment Specialty Group. "The changing technology landscape, especially for home entertainment, has further eroded confidence around risk assessment and mitigation."
And that's caused financiers to demand more from Hollywood and to broker deals that add on many more layers and deal points.
In the past, many moneymen blindly financed slates of films they didn't pick themselves. Their cash often covered 50% of the budgets on dozens of pics that ranged in degree of risk. Now, many co-financing arrangements involve fewer films and allow studio partners like David Ellison's Skydance Prods. and Jeff Sagansky's Hemisphere, for example, to have more leverage in choosing which films to partner on -- especially among tentpoles.
"The old slate deals were just a blunderbuss," says Stroock & Stroock & Lavan partner Schuyler Moore. "The real story is, it's just not happening (anymore) … now what you're doing is identifying your films going in."
That's because investors want more safeguards. They often want the chance to recoup a portion of their investment before the studio takes its fees, or they want to get their money back before the talent gets it backend.
But the question of which concessions the majors will or won't make won't be answered until more slate arrangements are assembled -- something that seems much less likely than in years past.
Co-financing arrangements can take months to close, and the majors are always in discussions with investors to explore opportunities. While these deals aren't essential to keep the lights on, most studios prefer to mitigate risk on all but their highest-profile franchises.
But when one door closes, another opens. As studios produce fewer of their own films, that provides room for distribution agreements with companies that have financed commercial projects -- like the deals Universal inked with Cross Creek and MRC last year. Cross Creek's Ron Howard-helmed "Rush" will mark the former pact's first release, while MRC currently has Seth MacFarlane's "Ted" in post-production.
While banks may be willing to lend, many observers wonder when equity will come back into the film-financing market. As a result, funds have turned their eyes overseas, particularly to China, India and elsewhere in Asia. Hemisphere's coin, for example, came in large part from Japan's Toho-Towa Co. and Kadokawa Shoten, and Korea's Lotte Cinema.
Paramount, Warner Bros. and Fox all have co-financing deals in place, while Disney is the studio outlier. Credit Suisse First Boston arranged $500 million in funding for the Mouse House's Kingdom deal in 2005 (the studio's first co-financing arrangement in a decade), but that pact ended in 2009.
Sony was able to fund 18 films, including hits like "Salt," "The Social Network" and "Grown Ups," through its Beverly I slate-selection arrangement. While the package also included misfires like "Did You Hear About the Morgans?," the pics overall grossed more than $2.6 billion worldwide.
Prior to 2008, estimates for a pic's overall performance counted in large part on homevideo sales, which often matched or even doubled worldwide box office grosses. That set expectations high for slate performances, and those expectations have been difficult to meet in recent years because of the decline in DVD dollars.
Aramid Entertainment Fund, an investor in the Beverly I slate, sued Relativity and hedge fund Fortress in February over its stake in the deal. The suit didn't name Sony or accuse the studio of any wrongdoing, but Aramid's very public unhappiness with its deal adds to the negativity surrounding these types of arrangements.
But money is always knocking at the studio gates, some of it more real, some of it less. As Variety first reported in August, Sony secured financing for three of its tentpoles from Hemisphere ("The Smurfs," "Men in Black III" and "The Adventures of Tintin," the latter of which was also co-financed by Paramount), and the studio is always talking to investors about other potential opportunies.
Any discussions Universal is having with potential financiers comes in advance of the end of its own co-financing deal.
Beverly II, arranged by Ryan Kavanaugh's Relativity Media and backed by Elliott Management in 2008, will fund films greenlit through the end of 2012, although the overall deal expires in 2014.
Under terms of the arrangement, Elliott funds about half the budgets of 75% of U's films each year. And while U had some home runs in 2011, with hits like "Fast Five" and "Bridesmaids," and this year with "Safe House," the studio is still smarting from a string of modest to disappointing performers (including "Cowboys & Aliens," in which Relativity participated) over the past few years.
Relativity can select films for Elliott, but it's not clear whether U's whole slate is open to them. Either way, Beverly II did not participate in "Fast Five," which wound up grossing more than $600 million worldwide to become the "Fast and the Furious" franchise's top grosser -- one very big missed opportunity.
Across town, Paramount's major co-financing arrangement comes from Ellison's Skydance. The two partnered in 2009 for a four-year deal that would allow Skydance to co-finance four to six of the studio's pics per year, including "Mission: Impossible -- Ghost Protocol," "Star Trek 2," "World War Z" and "G.I. Joe: Retaliation" through Skydance's $350 million fund (with a $200 million credit line arranged by JPMorgan Chase). Melrose II, a $300 million slate deal arranged by Dresdner Bank in 2006, wrapped up in 2008, although it still enables Melrose II investors to put money into sequels whose originals they also financed -- provided that the studio releases those pics by 2016. Any new investors would not have access to films included in the Skydance or Melrose II deal.
In November, investors in Melrose II filed a suit against the studio over profits to more than 29 films (including "Mission: Impossible III," "Charlotte's Web," "Dreamgirls," "Blades of Glory," "Jackass 2" and all three "Transformers" films).
Fox's pact with Dune, renewed in 2010, marks one of the longest-standing co-financing relationships at any of the studios. Dune began funding Fox movies, including boffo pics like "Avatar" and "Live Free or Die Hard," in 2005, and the pact's longevity and multiple renewals suggest Dune's contentment with its deal. Additionally, Fox has capital coming in from partners including New Regency and Ingenious, the latter of which has been on the Fox lot since 1998.
Meanwhile, Warner Bros. is set for the near future. Its two major investors, Village Roadshow and Legendary Entertainment, both secured new credit lines within the past two years. Village Roadshow closed a $1 billion facility in 2010, while Legendary wrapped up a $600 million-plus facility last April.
Ultimately, whether they have co-financing coin or not, the studios are always in discussions with potential investors, and always considering new financing arrangements.
"All of the studios today are divisions of much larger conglomerates," says Lindsay Conner, partner at Manatt, Phelps & Phillips. "Gone are the days when one mogul owned a big share of a studio, and that was the main business of the company. Today, they're all part of larger businesses, and it's a common and appropriate corporate practice to spread the risk of all expensive new initiatives." What: Slate financiers demand more control over projects. The takeaway: As studios mitigate risk, they must cede some control to the moneymen.
Moneymen pick up studio's slack
Financiers make mark in creative developement
Before
Ryan Kavanaugh set up shop in Hollywood a decade ago, film financing
was a mostly anonymous affair. There was nothing notable about funds
named Gun Hill, Beverly or Melrose, other than the Hollywood streets the
latter two are named after; and lenders like JPMorgan Chase, Merrill
Lynch and Bank of America were faceless financial institutions. With
Kavanaugh, there was now a colorful personality attached to the
pursestrings of many pics playing at the megaplex.
These days, Kavanaugh is hardly the only deep-pocketed moneyman on the scene.
A new crop of investors boasting their own rich bank accounts has recently gone from Hollywood outsiders to the top of executives' call sheets.
Their increased involvement in the film biz comes as the media congloms demand more profits from their studio divisions, scaring off execs from greenlighting films unless they can spawn sequels or an eventual reboot, generate piles of merchandise and sell millions of theme-park tickets.
"At the end of the day, Hollywood is all about making money," says one major studio boss. "That sounds cynical, but it's true. My hands are tied having to come up with big franchises. I can't make certain movies anymore, no matter how profitable they might become. I make movies that turn into toys."
While the majors devote their attention to tentpoles, they still need additional movies to fill their distribution pipelines. And that's where Hollywood's new bankrollers come in.
A year ago, David and Megan Ellison, the offspring of Oracle's billionaire chief Larry Ellison, were unknowns before pairing up with Paramount to make tentpoles like "Mission: Impossible -- Ghost Protocol" and high-profile indies like "True Grit." So were the five Thompson brothers, a Louisiana oil-and-gas family whose Cross Creek banner struck it rich with "Black Swan."
Tim Headington ("Hugo," "Rango") is a Texas oil and real estate baron who now co-owns FilmDistrict with Graham King (with whom he funded GK Films). "Warrior" producers Jordan Schur and David Mimran made their millions running record labels and a Monaco-based food processing firm. And Richard Branson was a high flyer, not a filmmaker, until launching the Virgin Produced banner.
Before them, Reliance Group's Amit Khanna was a player in Bollywood prior to backing DreamWorks with $325 million. Jeff Skoll (Participant), Fred Smith (Alcon), Sidney Kimmel (SKE), Bill Pohlad (River Road) and Philip Anschutz (Walden) earned their wealth from eBay, Federal Express, apparel brands like Nine West and Anne Klein, the Minnesota Twins baseball team and L.A. real estate, respectively.
And Thomas Tull, part owner of the Pittsburgh Steelers, was a rich fanboy with a soft spot for comicbooks, toys and videogames before forming Legendary Entertainment and co-financing Warner Bros.' bigger tentpoles.
In the past, outside financiers were lumped under one disparaging label: "dumb money." When one well was tapped dry by studios, another would come along.
The cycle is under way once again. Only this time, Hollywood's new moneymen are savvier and getting more involved in the creative process. Financiers aren't just writing checks in exchange for premiere tickets, they're actively helping develop and produce the films in which they invest.
Pohlad has said he's "attracted to the (film) business because of filmmaking" and not how much coin he can collect from a pic's success. He also "wants creative involvement." And David Ellison says he never wants Skydance to be viewed as "just a checkbook."
These newcomers also are signing on to support films they actually want to see.
Given Tull's fanboy interests, it's no surprise that Legendary has established itself as a key banner behind the Batman and Superman actioners; the giant robots-vs.-monster epic "Pacific Rim"; fantasy tales "Seventh Son," "Paradise Lost" and "Jack the Giant Killer"; a reboot of "Godzilla" and adaptations of videogames "World of Warcraft" and "Mass Effect."
Anschutz's Walden ("The Chronicles of Narnia") has focused on family fare with messages that align with the mogul's religious and conservative values, while Skoll's Participant makes movies with sociopolitical themes like education and healthcare that jive with his philanthropic causes.
The choices of the Ellison siblings also reflect their tastes: David's Skydance gravitates toward actioners like the fourth "Mission: Impossible," the "G.I. Joe" sequel, a reboot of the Jack Ryan series, zombie pic "World War Z," the Tom Cruise vehicle "One Shot," and a disaster epic from scribes Zack Stentz and Ashley Miller ("X-Men: First Class" and "Thor"), who are also tackling a reboot of "Top Gun," which Skydance is producing with Jerry Bruckheimer. Megan Ellison's Annapurna Pictures has become the darling of indie filmmakers like the Coen brothers ("True Grit"), Doug Wick ("Wettest County," bought by the Weinstein Co. at Cannes), and Spike Jonze, Kathryn Bigelow, Andrew Dominik ("Cogan's Trade"), Gore Verbinski ("Bitterroot") and Paul Thomas Anderson, although her buy-up of the "Terminator" rights signals more of a move to tentpole territory.
It's a busy group.
•Tull's Legendary launched with a $500 million fund in 2004, and raised a credit line of about $700 million last year, making it a major pic producer through 2016, even after its seven-year pact to co-finance and produce films with Warner Bros. ends in 2013.
It established itself by laying claim to genre fare, with co-productions including WB's Superman and Batman films, the "Hangover" comedies, "300," "Watchmen," "Clash of the Titans" and "Inception." Tull also has launched Legendary East, a Chinese studio set up to self-finance pics in that country through a $220.5 million fund (and another $225 million credit facility), with Ed Zwick's "The Great Wall" as its first project.
• David Ellison's Skydance oversees a $350 million fund to co-finance films with Paramount, with the shingle getting first look at the studio's projects through a four-year deal, an unusual pact for any first-time financier.
• Megan Ellison has yet to disclose just how much money she's working with, but her company ponied up $20 million to land rights to the "Terminator" franchise.
• Timmy, Tommy, Todd, Tyler and Bobby Thompson bought their way into Hollywood with $40 million through their Cross Creek Pictures banner, run by Brian Oliver (former topper at Arthaus Pictures and a Propaganda Films exec), and found a gusher at the B.O. with "Black Swan," a $13 million pic that danced its way to $329 million worldwide. The company has since enticed backers to raise another $260 million.
• Randall Emmett and George Furla's Emmett/Furla Films teamed with Stepan Martirosyan and Remington William Chase's Envision Entertainment in September to establish a $250 million equity and debt fund, with initial dollars coming in part from the Russian oil biz and real estate ventures.
• Media Rights Capital's Modi Wiczyk and Asif Satchu closed a five-year, $350 million revolving credit facility with five banks, also in September, to replace a similar three-year fund secured in 2008.
• India's Reliance Big Entertainment backed half of DreamWorks in 2009, for $325 million, essentially giving the company a second life. It's also ponied up development coin for projects developed by shingles run by Tom Hanks, Brad Pitt, Nicolas Cage, George Clooney, Jim Carrey, Jay Roach, Chris Columbus and Brett Ratner.
• Last summer, former CBS and Sony exec Jeff Sagansky launched Hemisphere Tentpole Co-Financing Fund with Jean-Luc De Fanti and Eli Baker (also behind Winchester Capital Partners) to back 12 to 16 studio pics that it believes will play well in growing foreign moviegoing markets. The first $200 million went into Sony's "The Smurfs" and "Men in Black III," Paramount's "The Adventures of Tintin: The Secret of the Unicorn" and "World War Z."
• And flying high with funds from his Virgin-branded airlines, Branson launched Virgin Produced in July 2010, through a pair-up with Kavanaugh's Relativity. Run by former J2TV/J2 Pictures producers Jason Felts and Justin Berfield, the shingle landed a hit with "Limitless," a $27 million pic that starred Bradley Cooper and has scored $162 million worldwide. It also backed "Immortals," a co-production with Relativity, that is now its biggest hit. Relativity quickly paired up with Virgin after the shingle offered to provide some valuable marketing muscle by tubthumping films across Branson's airlines, including Virgin America and Virgin Atlantic, and cell phones, through Virgin Mobile.
These new producers are keeping midrange-budgeted pics afloat -- something New Regency (the "Alvin and the Chipmunks" franchise, "In Time," "What's Your Number?") has long done at Fox. (The banner closed a $500 million credit line in September to fund more pics.)
Similarly, Emmett/Furla Films is expected to produce nine pics this year through its new fund that will benefit studios and mini-majors. The company recently financed Stephen Frears' comedy "Lay the Favorite," with Bruce Willis, Rebecca Hall and Catherine Zeta-Jones and Lionsgate-Summit's upcoming "The Tomb," with Sylvester Stallone and Arnold Schwarzenegger. .
And, after speciality labels Warner Independent, Fox Atomic and Par Vantage shuttered, companies like Norm Waitt's Gold Circle Films ("Life as We Know It"), Bill Pohlad's River Road ("Tree of Life," "Brokeback Mountain"), James Stern's Endgame Entertainment ("An Education") and Steven Rales' Indian Paintbrush ("Like Crazy") are breathing new life into the indie biz with titles that are praised by critics but are never going to lead to action figures or videogames.
As Pitt recently told Variety, "There are a few very strong independent financiers that are more interested in content than profit. These guys like Bill Pohlad, who did "Tree of Life," and Tim Headington and Megan Ellison are so important to what we do in the structure we are in right now. (Without them), harder-sell risk-taking films might not make it to the screen."
Even Lionsgate is looking for partners, teaming up with "Warrior" producers Schur and Mimran, whose credits include the Edward Norton-Robert De Niro psychological thriller "Stone" and the Malcolm Venville-directed "Henry's Crime," with Keanu Reeves, to co-finance a yet-to-be disclosed slate of films.
Universal, especially, is relying on outside partners for pics. MRC (Seth MacFarlane's "Ted," "The Adjustment Bureau," "Bruno") has a five-year distribution deal with U. And the studio recently inked a three-year deal to release at least six films from Cross Creek, the first being Formula One racing biopic "Rush," steered by Ron Howard. CBS Films released Cross Creek's Daniel Radcliffe starrer "The Woman in Black."
Cross Creek is focused on films with budgets that fall in the $15 million-$65 million range, with an average cost of $25 million to $35 million. Its Clooney pic "The Ides of March" had a $23 million budget. The film has since lobbied $34 million from the domestic B.O. In development at the shingle are Todd Field's "The Creed of Violence"; "Black Mass," a Boston Irish mob tale about James "Whitey" Bulger; and a biopic of actor Steve McQueen that Jeremy Renner is circling.
If there's anything that ties these moneymen (and women) together, it's that they've managed to largely stay out of the spotlight. In fact, most avoid the Hollywood party scene, attending premieres for their own pics only. They give few interviews. With the exception of Legendary, the shingles are small operations, requiring little overhead (Megan Ellison's Annapurna is essentially the 25-year-old and her lawyer).
Some are looking to boost their presence, however.
Tull is making moves to turn Legendary into a full-fledged studio, self-financing more films in the U.S., rather than as co-productions with Warners, and abroad through his Hong Kong-based Legendary East, the entity that will produce English-language tentpoles designed for Chinese auds. WB will distribute those films.
Legendary already has successfully become a brand among the Comic-Con crowd, with the company's panel at this year's confab for pics that had yet to start production attracting more than 2,000.
And while there has been some internal friction between Legendary and WB over credit, and a falling out between Relativity and U (especially over their dueling Snow White films), most studio chiefs aren't objecting to the inroads made by this crop of Hollywood newcomers. In fact, some are outright envious.
"These other guys, they've got the freedom to make whatever they want," the major studio head told Variety. "They can take the risks we (studios) can't anymore."
A new crop of investors boasting their own rich bank accounts has recently gone from Hollywood outsiders to the top of executives' call sheets.
Their increased involvement in the film biz comes as the media congloms demand more profits from their studio divisions, scaring off execs from greenlighting films unless they can spawn sequels or an eventual reboot, generate piles of merchandise and sell millions of theme-park tickets.
"At the end of the day, Hollywood is all about making money," says one major studio boss. "That sounds cynical, but it's true. My hands are tied having to come up with big franchises. I can't make certain movies anymore, no matter how profitable they might become. I make movies that turn into toys."
While the majors devote their attention to tentpoles, they still need additional movies to fill their distribution pipelines. And that's where Hollywood's new bankrollers come in.
A year ago, David and Megan Ellison, the offspring of Oracle's billionaire chief Larry Ellison, were unknowns before pairing up with Paramount to make tentpoles like "Mission: Impossible -- Ghost Protocol" and high-profile indies like "True Grit." So were the five Thompson brothers, a Louisiana oil-and-gas family whose Cross Creek banner struck it rich with "Black Swan."
Tim Headington ("Hugo," "Rango") is a Texas oil and real estate baron who now co-owns FilmDistrict with Graham King (with whom he funded GK Films). "Warrior" producers Jordan Schur and David Mimran made their millions running record labels and a Monaco-based food processing firm. And Richard Branson was a high flyer, not a filmmaker, until launching the Virgin Produced banner.
Before them, Reliance Group's Amit Khanna was a player in Bollywood prior to backing DreamWorks with $325 million. Jeff Skoll (Participant), Fred Smith (Alcon), Sidney Kimmel (SKE), Bill Pohlad (River Road) and Philip Anschutz (Walden) earned their wealth from eBay, Federal Express, apparel brands like Nine West and Anne Klein, the Minnesota Twins baseball team and L.A. real estate, respectively.
And Thomas Tull, part owner of the Pittsburgh Steelers, was a rich fanboy with a soft spot for comicbooks, toys and videogames before forming Legendary Entertainment and co-financing Warner Bros.' bigger tentpoles.
In the past, outside financiers were lumped under one disparaging label: "dumb money." When one well was tapped dry by studios, another would come along.
The cycle is under way once again. Only this time, Hollywood's new moneymen are savvier and getting more involved in the creative process. Financiers aren't just writing checks in exchange for premiere tickets, they're actively helping develop and produce the films in which they invest.
Pohlad has said he's "attracted to the (film) business because of filmmaking" and not how much coin he can collect from a pic's success. He also "wants creative involvement." And David Ellison says he never wants Skydance to be viewed as "just a checkbook."
These newcomers also are signing on to support films they actually want to see.
Given Tull's fanboy interests, it's no surprise that Legendary has established itself as a key banner behind the Batman and Superman actioners; the giant robots-vs.-monster epic "Pacific Rim"; fantasy tales "Seventh Son," "Paradise Lost" and "Jack the Giant Killer"; a reboot of "Godzilla" and adaptations of videogames "World of Warcraft" and "Mass Effect."
Anschutz's Walden ("The Chronicles of Narnia") has focused on family fare with messages that align with the mogul's religious and conservative values, while Skoll's Participant makes movies with sociopolitical themes like education and healthcare that jive with his philanthropic causes.
The choices of the Ellison siblings also reflect their tastes: David's Skydance gravitates toward actioners like the fourth "Mission: Impossible," the "G.I. Joe" sequel, a reboot of the Jack Ryan series, zombie pic "World War Z," the Tom Cruise vehicle "One Shot," and a disaster epic from scribes Zack Stentz and Ashley Miller ("X-Men: First Class" and "Thor"), who are also tackling a reboot of "Top Gun," which Skydance is producing with Jerry Bruckheimer. Megan Ellison's Annapurna Pictures has become the darling of indie filmmakers like the Coen brothers ("True Grit"), Doug Wick ("Wettest County," bought by the Weinstein Co. at Cannes), and Spike Jonze, Kathryn Bigelow, Andrew Dominik ("Cogan's Trade"), Gore Verbinski ("Bitterroot") and Paul Thomas Anderson, although her buy-up of the "Terminator" rights signals more of a move to tentpole territory.
It's a busy group.
•Tull's Legendary launched with a $500 million fund in 2004, and raised a credit line of about $700 million last year, making it a major pic producer through 2016, even after its seven-year pact to co-finance and produce films with Warner Bros. ends in 2013.
It established itself by laying claim to genre fare, with co-productions including WB's Superman and Batman films, the "Hangover" comedies, "300," "Watchmen," "Clash of the Titans" and "Inception." Tull also has launched Legendary East, a Chinese studio set up to self-finance pics in that country through a $220.5 million fund (and another $225 million credit facility), with Ed Zwick's "The Great Wall" as its first project.
• David Ellison's Skydance oversees a $350 million fund to co-finance films with Paramount, with the shingle getting first look at the studio's projects through a four-year deal, an unusual pact for any first-time financier.
• Megan Ellison has yet to disclose just how much money she's working with, but her company ponied up $20 million to land rights to the "Terminator" franchise.
• Timmy, Tommy, Todd, Tyler and Bobby Thompson bought their way into Hollywood with $40 million through their Cross Creek Pictures banner, run by Brian Oliver (former topper at Arthaus Pictures and a Propaganda Films exec), and found a gusher at the B.O. with "Black Swan," a $13 million pic that danced its way to $329 million worldwide. The company has since enticed backers to raise another $260 million.
• Randall Emmett and George Furla's Emmett/Furla Films teamed with Stepan Martirosyan and Remington William Chase's Envision Entertainment in September to establish a $250 million equity and debt fund, with initial dollars coming in part from the Russian oil biz and real estate ventures.
• Media Rights Capital's Modi Wiczyk and Asif Satchu closed a five-year, $350 million revolving credit facility with five banks, also in September, to replace a similar three-year fund secured in 2008.
• India's Reliance Big Entertainment backed half of DreamWorks in 2009, for $325 million, essentially giving the company a second life. It's also ponied up development coin for projects developed by shingles run by Tom Hanks, Brad Pitt, Nicolas Cage, George Clooney, Jim Carrey, Jay Roach, Chris Columbus and Brett Ratner.
• Last summer, former CBS and Sony exec Jeff Sagansky launched Hemisphere Tentpole Co-Financing Fund with Jean-Luc De Fanti and Eli Baker (also behind Winchester Capital Partners) to back 12 to 16 studio pics that it believes will play well in growing foreign moviegoing markets. The first $200 million went into Sony's "The Smurfs" and "Men in Black III," Paramount's "The Adventures of Tintin: The Secret of the Unicorn" and "World War Z."
• And flying high with funds from his Virgin-branded airlines, Branson launched Virgin Produced in July 2010, through a pair-up with Kavanaugh's Relativity. Run by former J2TV/J2 Pictures producers Jason Felts and Justin Berfield, the shingle landed a hit with "Limitless," a $27 million pic that starred Bradley Cooper and has scored $162 million worldwide. It also backed "Immortals," a co-production with Relativity, that is now its biggest hit. Relativity quickly paired up with Virgin after the shingle offered to provide some valuable marketing muscle by tubthumping films across Branson's airlines, including Virgin America and Virgin Atlantic, and cell phones, through Virgin Mobile.
These new producers are keeping midrange-budgeted pics afloat -- something New Regency (the "Alvin and the Chipmunks" franchise, "In Time," "What's Your Number?") has long done at Fox. (The banner closed a $500 million credit line in September to fund more pics.)
Similarly, Emmett/Furla Films is expected to produce nine pics this year through its new fund that will benefit studios and mini-majors. The company recently financed Stephen Frears' comedy "Lay the Favorite," with Bruce Willis, Rebecca Hall and Catherine Zeta-Jones and Lionsgate-Summit's upcoming "The Tomb," with Sylvester Stallone and Arnold Schwarzenegger. .
And, after speciality labels Warner Independent, Fox Atomic and Par Vantage shuttered, companies like Norm Waitt's Gold Circle Films ("Life as We Know It"), Bill Pohlad's River Road ("Tree of Life," "Brokeback Mountain"), James Stern's Endgame Entertainment ("An Education") and Steven Rales' Indian Paintbrush ("Like Crazy") are breathing new life into the indie biz with titles that are praised by critics but are never going to lead to action figures or videogames.
As Pitt recently told Variety, "There are a few very strong independent financiers that are more interested in content than profit. These guys like Bill Pohlad, who did "Tree of Life," and Tim Headington and Megan Ellison are so important to what we do in the structure we are in right now. (Without them), harder-sell risk-taking films might not make it to the screen."
Even Lionsgate is looking for partners, teaming up with "Warrior" producers Schur and Mimran, whose credits include the Edward Norton-Robert De Niro psychological thriller "Stone" and the Malcolm Venville-directed "Henry's Crime," with Keanu Reeves, to co-finance a yet-to-be disclosed slate of films.
Universal, especially, is relying on outside partners for pics. MRC (Seth MacFarlane's "Ted," "The Adjustment Bureau," "Bruno") has a five-year distribution deal with U. And the studio recently inked a three-year deal to release at least six films from Cross Creek, the first being Formula One racing biopic "Rush," steered by Ron Howard. CBS Films released Cross Creek's Daniel Radcliffe starrer "The Woman in Black."
Cross Creek is focused on films with budgets that fall in the $15 million-$65 million range, with an average cost of $25 million to $35 million. Its Clooney pic "The Ides of March" had a $23 million budget. The film has since lobbied $34 million from the domestic B.O. In development at the shingle are Todd Field's "The Creed of Violence"; "Black Mass," a Boston Irish mob tale about James "Whitey" Bulger; and a biopic of actor Steve McQueen that Jeremy Renner is circling.
If there's anything that ties these moneymen (and women) together, it's that they've managed to largely stay out of the spotlight. In fact, most avoid the Hollywood party scene, attending premieres for their own pics only. They give few interviews. With the exception of Legendary, the shingles are small operations, requiring little overhead (Megan Ellison's Annapurna is essentially the 25-year-old and her lawyer).
Some are looking to boost their presence, however.
Tull is making moves to turn Legendary into a full-fledged studio, self-financing more films in the U.S., rather than as co-productions with Warners, and abroad through his Hong Kong-based Legendary East, the entity that will produce English-language tentpoles designed for Chinese auds. WB will distribute those films.
Legendary already has successfully become a brand among the Comic-Con crowd, with the company's panel at this year's confab for pics that had yet to start production attracting more than 2,000.
And while there has been some internal friction between Legendary and WB over credit, and a falling out between Relativity and U (especially over their dueling Snow White films), most studio chiefs aren't objecting to the inroads made by this crop of Hollywood newcomers. In fact, some are outright envious.
"These other guys, they've got the freedom to make whatever they want," the major studio head told Variety. "They can take the risks we (studios) can't anymore."
Contact Marc Graser at
marc.graser@variety.com
Posted: Fri., Feb. 24, 2012, 8:25am PT
Thinking outside the studio lot
Independent producers help majors fill pipelines
"Other
people's money" has become the mantra of the Hollywood majors as they
make fewer films themselves, and look to outside producers to keep their
distribution pipelines full.
According to the Motion Picture Assn. of America, releases from
Disney, Fox, Paramount, Sony, Universal and Warner Bros. dipped 4%
between 2001-2010, while product from studio specialty arms fell 51%,
largely because of the shuttering of speciality labels like Warner
Independent, Paramount Vantage, Fox Atomic, and Disney's sale of
Miramax.
Non-MPAA members, which includes everyone but the six majors, showed a 55% increase in pic production during those nine years.
In 2010, MPAA members produced 98 films, compared with 652 films from non-MPAA members, according to data from the org. That's a 19% drop in pics for the majors from the prior year's total of 121 (non-MPAA members produced 613 in 2009).
Last year, the majors produced 104 pics, according to Rentrak -- close to the 10-year average of 110. And the studios already have 94 films slated for release in 2012.
These figures can be a little misleading.
Studios may be distributing the films, but they aren't fully financing most of them. As budgets get bigger, studios want to mitigate their risk on pricey pics. The credit crunch, diminishing homevideo dollars and the tightening of purse strings by corporate parents have also contributed to the studios' production slate cutbacks.
With the rare exception of a "Harry Potter," or Disney's family tentpoles, studios increasingly are turning to an expanding list of moneymen with sizable personal wealth, control of hedge funds, credit lines and other sources of equity with whom they're making big-budget pics.
While mitigating risk on production budgets, the studios, acting as distribution entities, can take advantage of the growing box office overseas -- especially in China, Russia and Brazil -- and new digital distribution platforms.
As Disney reduces its inhouse productions to a half-dozen live-action family films, it's filling out the rest of its distribution pipeline with films from Marvel Studios, Pixar and DreamWorks.
"We feel we're better off by reducing the size of the slate and making films that are bigger and increasingly more risky," Disney chief Robert Iger told investors last year. Those films include "Oz: The Great and Powerful" and "John Carter," each of which cost more than $200 million.
The Mouse House isn't alone in that shift.
Paramount wound up with "Iron Man," "Thor" and "Captain America" through a distribution deal with Marvel Studios when the comicbook giant was self-financing its slate of superhero fare. Par also releases DreamWorks Animation's toons, and landed "Transformers" and "G.I. Joe" through a pair-up with Hasbro, and the "Indiana Jones" films from a long relationship with Lucasfilm. "Star Trek," "G.I. Joe" and the remake of "Footloose" were backed by Spyglass (now in charge of MGM). And the studio now has David Ellison's Skydance reinvigorating the "Mission: Impossible" franchise and backing the "Star Trek" series, which was rebooted in 2009.
The deals let Paramount collect a lucrative distribution fee while touting tie-ins with high-profile tentpoles.
Another factor aiding the rise of outside-studio producers is the recent slow defrosting of the credit market, which has helped investors to raise enough capital to buy Miramax, MGM to refinance its debt with $500 million and return as a player, New Regency to close a $500 million credit line and Dune Capital Management to extend its deal with Fox to back 35% of the studio's slate.
At the same time, the hunt for profits during the economic downturn has put pressure on the majors to make safer bets: four-quadrant franchises that play globally and perform across divisions. The downside: Those films are expensive, with $100 million-plus pricetags that are quickly ballooning past the $200 million mark.
"People still want to see movies," says one studio chief. "Unless you're Disney, moviegoers don't really care who makes them."
MGM, which was once the embodiment of the studio system, is emerging from bankruptcy as a producer of pics for other studios, focusing heavily on remakes like "RoboCop," "Death Wish," "WarGames," "Mr. Mom" and "Carrie."
And aside from the creative aspects, studios are outsourcing their funding. Sony and Universal relied on Relativity Media before seeking other sources as Relativity moved to become more of a mini-major. India's Reliance Big Entertainment kept DreamWorks alive. Universal has brought Cross Creek onto the lot. Warner Bros. has a longtime deal with Legendary Pictures for its Batman, Superman and "The Hangover" films, while it also has deals with Alcon Entertainment and Village Roadshow for other tentpole fare.
These financiers-turned-filmmakers are helping take the weight off studios having to fully fund their slates as cost-cutting congloms demand more profits from their film divisions.
Participant Media, which co-finances pics with Imagenation Abu Dhabi, had two of the top films at the B.O. this past fall, with Warner Bros.' "Contagion" and "The Help," a DreamWorks production that Disney distributed. Participant on average backs two films per year, Legendary co-finances three high-profile tentpoles annually with Warner, while Spyglass averages three, including "The Dilemma" (U), "No Strings Attached" and "Footloose" (both Par) in 2011.
The biggest player is still Relativity, which has co-financed 20-30 films a year since 2005, spread out mostly between Sony and Universal, ponying up to 50% of each film's budget. In 2011, however, it pulled back to around 11, including Sony's "Battle: Los Angeles"; U's "Bridesmaids" and "Hop"; and U, DreamWorks and Imagine's "Cowboys & Aliens," as it shifts gears to become a mini-major in its own right. Its solo releases in 2011 included "Season of the Witch," "Limitless" and "Immortals."
What's more, with each hit under a financier's belt, there's even more incentive to fund additional films. Just look at Cross Creek activities after its investment in "Black Swan," which made a strong showing at the worldwide B.O. The shingle moved to back Imagine Entertainment and Universal's "Rush," and signed on to back a slate of films for U.
But having co-financing partners also means sharing the upside, often on films that the majors would have been more hesitant to offer up 10 years ago. That's especially true when it comes to sequel-worthy franchises, which new funds like Hemisphere Capital are now being offered, like "The Smurfs" and "Men in Black III." While its "Harry Potter" franchise was off-limits to partners, Warner Bros. enabled Legendary to back its high-profile DC Entertainment properties starring Superman and Batman. Whether that continues remains to be seen now that WB is taking more control of DC's characters.
"The studios are still navigating through a period where there's pressure on margins. … They're certainly not overinvesting and making more films," says John Nendick, global media and entertainment leader at Ernst & Young.
Until growing forms of digital distribution compensate for a decline in DVD sales -- which doesn't seem likely to happen anytime soon -- that won't change. Alternate suppliers The number of releases by non-studios and studio subsidiaries grew over the past decade from 270 in 2002 to a high-water mark of 466 in 2008. The recession and a crowded marketplace yielded fewer releases in recent years, though the trend suggests tallies are again on the rise. YearNon-studio releases201041920093972008466200742020063902005308200430920032752002270 Data for 2011 not available. Source: MPAA What: The major studios have trimmed the number of films they produce. The takeaway: Outside investors now fund, co-finance or supply many big studio pics.
Non-MPAA members, which includes everyone but the six majors, showed a 55% increase in pic production during those nine years.
In 2010, MPAA members produced 98 films, compared with 652 films from non-MPAA members, according to data from the org. That's a 19% drop in pics for the majors from the prior year's total of 121 (non-MPAA members produced 613 in 2009).
Last year, the majors produced 104 pics, according to Rentrak -- close to the 10-year average of 110. And the studios already have 94 films slated for release in 2012.
These figures can be a little misleading.
Studios may be distributing the films, but they aren't fully financing most of them. As budgets get bigger, studios want to mitigate their risk on pricey pics. The credit crunch, diminishing homevideo dollars and the tightening of purse strings by corporate parents have also contributed to the studios' production slate cutbacks.
With the rare exception of a "Harry Potter," or Disney's family tentpoles, studios increasingly are turning to an expanding list of moneymen with sizable personal wealth, control of hedge funds, credit lines and other sources of equity with whom they're making big-budget pics.
While mitigating risk on production budgets, the studios, acting as distribution entities, can take advantage of the growing box office overseas -- especially in China, Russia and Brazil -- and new digital distribution platforms.
As Disney reduces its inhouse productions to a half-dozen live-action family films, it's filling out the rest of its distribution pipeline with films from Marvel Studios, Pixar and DreamWorks.
"We feel we're better off by reducing the size of the slate and making films that are bigger and increasingly more risky," Disney chief Robert Iger told investors last year. Those films include "Oz: The Great and Powerful" and "John Carter," each of which cost more than $200 million.
The Mouse House isn't alone in that shift.
Paramount wound up with "Iron Man," "Thor" and "Captain America" through a distribution deal with Marvel Studios when the comicbook giant was self-financing its slate of superhero fare. Par also releases DreamWorks Animation's toons, and landed "Transformers" and "G.I. Joe" through a pair-up with Hasbro, and the "Indiana Jones" films from a long relationship with Lucasfilm. "Star Trek," "G.I. Joe" and the remake of "Footloose" were backed by Spyglass (now in charge of MGM). And the studio now has David Ellison's Skydance reinvigorating the "Mission: Impossible" franchise and backing the "Star Trek" series, which was rebooted in 2009.
The deals let Paramount collect a lucrative distribution fee while touting tie-ins with high-profile tentpoles.
Another factor aiding the rise of outside-studio producers is the recent slow defrosting of the credit market, which has helped investors to raise enough capital to buy Miramax, MGM to refinance its debt with $500 million and return as a player, New Regency to close a $500 million credit line and Dune Capital Management to extend its deal with Fox to back 35% of the studio's slate.
At the same time, the hunt for profits during the economic downturn has put pressure on the majors to make safer bets: four-quadrant franchises that play globally and perform across divisions. The downside: Those films are expensive, with $100 million-plus pricetags that are quickly ballooning past the $200 million mark.
"People still want to see movies," says one studio chief. "Unless you're Disney, moviegoers don't really care who makes them."
MGM, which was once the embodiment of the studio system, is emerging from bankruptcy as a producer of pics for other studios, focusing heavily on remakes like "RoboCop," "Death Wish," "WarGames," "Mr. Mom" and "Carrie."
And aside from the creative aspects, studios are outsourcing their funding. Sony and Universal relied on Relativity Media before seeking other sources as Relativity moved to become more of a mini-major. India's Reliance Big Entertainment kept DreamWorks alive. Universal has brought Cross Creek onto the lot. Warner Bros. has a longtime deal with Legendary Pictures for its Batman, Superman and "The Hangover" films, while it also has deals with Alcon Entertainment and Village Roadshow for other tentpole fare.
These financiers-turned-filmmakers are helping take the weight off studios having to fully fund their slates as cost-cutting congloms demand more profits from their film divisions.
Participant Media, which co-finances pics with Imagenation Abu Dhabi, had two of the top films at the B.O. this past fall, with Warner Bros.' "Contagion" and "The Help," a DreamWorks production that Disney distributed. Participant on average backs two films per year, Legendary co-finances three high-profile tentpoles annually with Warner, while Spyglass averages three, including "The Dilemma" (U), "No Strings Attached" and "Footloose" (both Par) in 2011.
The biggest player is still Relativity, which has co-financed 20-30 films a year since 2005, spread out mostly between Sony and Universal, ponying up to 50% of each film's budget. In 2011, however, it pulled back to around 11, including Sony's "Battle: Los Angeles"; U's "Bridesmaids" and "Hop"; and U, DreamWorks and Imagine's "Cowboys & Aliens," as it shifts gears to become a mini-major in its own right. Its solo releases in 2011 included "Season of the Witch," "Limitless" and "Immortals."
What's more, with each hit under a financier's belt, there's even more incentive to fund additional films. Just look at Cross Creek activities after its investment in "Black Swan," which made a strong showing at the worldwide B.O. The shingle moved to back Imagine Entertainment and Universal's "Rush," and signed on to back a slate of films for U.
But having co-financing partners also means sharing the upside, often on films that the majors would have been more hesitant to offer up 10 years ago. That's especially true when it comes to sequel-worthy franchises, which new funds like Hemisphere Capital are now being offered, like "The Smurfs" and "Men in Black III." While its "Harry Potter" franchise was off-limits to partners, Warner Bros. enabled Legendary to back its high-profile DC Entertainment properties starring Superman and Batman. Whether that continues remains to be seen now that WB is taking more control of DC's characters.
"The studios are still navigating through a period where there's pressure on margins. … They're certainly not overinvesting and making more films," says John Nendick, global media and entertainment leader at Ernst & Young.
Until growing forms of digital distribution compensate for a decline in DVD sales -- which doesn't seem likely to happen anytime soon -- that won't change. Alternate suppliers The number of releases by non-studios and studio subsidiaries grew over the past decade from 270 in 2002 to a high-water mark of 466 in 2008. The recession and a crowded marketplace yielded fewer releases in recent years, though the trend suggests tallies are again on the rise. YearNon-studio releases201041920093972008466200742020063902005308200430920032752002270 Data for 2011 not available. Source: MPAA What: The major studios have trimmed the number of films they produce. The takeaway: Outside investors now fund, co-finance or supply many big studio pics.
Contact Variety Staff at
news@variety.com
Steve
Carell’s involvement with 'Crazy Stupid Love' helped sell it to
studios, which are increasingly emphasizing tentpoles, like
'Transformers — Dark of the Moon.'
Hollywood's obsession
with franchises and recognizable brands has caused a quiet power shift
in the film biz, with the decline in development budgets at the major
studios whetting appetites for prepackaged, ready-to-shoot projects. The
result: Producers and filmmakers now have more control at the mid- and
small-budget levels.With faster greenlights as the prize, filmmakers
have new incentives to fully develop their ideas before taking them to
the studios. Agents and managers, meanwhile, are attaching talent to
projects earlier in the process -- a shift that, as any one of those
players will attest, beats fighting with studios for approval.
"It's really more about making (movies) and less about developing them in today's marketplace," says one lit agent.
As one manager puts it: "Companies like Relativity only want packages they can pull the trigger on. They don't have the time or attention span to develop something from scratch. They assume that's your job, and it's why you're bringing a script to them in the first place."
None of that is expected to change, as the corporatization of Hollywood has made studios less likely to take risks on unproven projects, and instead turned their attention to big-budget tentpoles that can perform as franchises at the box office and in retail aisles.
Since the 2007 writers' strike and the 2008 recession, the studios have felt more pressure to appease parent companies that have become more cost-conscious and profit-hungry. They increasingly need to produce content that moviegoers will instantly recognize and embrace. Last summer alone saw the studios focused on familiar properties like the Transformers, the Smurfs, Thor, Green Lantern, Captain America and Planet of the Apes.
But even as they devote their development dollars largely to tentpoles, studios still have distribution pipelines to fill. They need to feed the megaplexes year-round, even if they're not directly creating that product.
That's opened the doors for producers to put together the rest of the studios' slates with original fare.
"Ten years ago, studios would take a package, but they weren't necessarily looking for them," one top agent at a tenpercentery tells Variety. "Now it's more of a priority. Studios see them as an opportunity to put money into something that they know is going to happen instead of paying a couple million on developing something that will never happen."
That doesn't necessarily mean it's easier to get a greenlight.
Tenpercenteries need to assemble packages that grab the attention of studios bosses and are easily marketable to moviegoers.
The packaging process, in fact, is now being discussed before scripts are shopped to the studios, and agents and managers are being trained to do the extra legwork to make projects salable.
Warner Bros.' "Crazy Stupid Love" was a spec that several studios were high on when it was put on the auction block a couple years ago. What helped attract attention to the romantic comedy wasn't just its scribe, Dan Fogelman -- hot off Disney's "Cars" and "Tangled" -- but the attachment of Steve Carell as its star.
Having set up a number of high-profile videogame and comicbook adaptations at the studios, Adrian Askarieh has moved to take the independent route to package his own projects, such as "Alien Sleeper Cell," an alien invasion pic that Morgan Davis Foehl will write and Bill Block ("District 9") will produce through QED Intl. Askarieh is taking a similar approach with "Just Cause," an adaptation of Eidos' hit vidgame -- with Michael Ross ("Turistas") scripting and Eric Eisner's L+E Pictures co-producing -- in order to retain more creative control and speed up the development process.
Most recently, even the music industry has gotten involved: ICM has begun packaging a narrative-style pic revolving around music by the Grateful Dead, after being granted unlimited access to the band's music catalog.
Another package that drew attention was Universal's deal to buy an R-rated college-based comedy that will star Seth Rogen and Zac Efron, based on a script by Andrew Cohen and Brendan O'Brien. Rogen will produce with Evan Goldberg through their Point Grey Pictures shingle.
The commitment of additional talent early in the process has helped boost the pricetag of such deals, reps say, doubling or even tripling what they might have landed for a traditional spec sale in the past.
In the Rogen-Efron deal, the scribes pulled in seven figures and the thesps pocketed higher-than-usual quotes along with backend fees after a bidding war took place to secure the project. Rogen will earn $8 million on top of a seven-figure producing fee.
Locking down talent, however, can prove just as difficult as selling a project to a studio.
Just getting talent to read the material can hold back a package, reps say. But it doesn't stop there.
"It's one thing to get the right talent to like the material and come onboard. It's a completely other thing to get that director or actor to read it," says one lit agent. "Sometimes it takes three days, other times it takes them three months, so a lot of the issues we run into come down to timing."
The involvement of multiple agencies can also cause delays, considering that each has its own idea regarding who is right to topline a particular piece of material.
For the raunchy college comedy set up at Universal, UTA and Principal repped Rogen. The tenpercentery also repped Goldberg. Efron's deal was handled by CAA and Alchemy, while the scribes are also repped by CAA.
Financing is a key factor that often comes into play when packaging such projects before they get their footing at a studio.
A handful of auteurs got their projects up and running thanks to the Annapurna Pictures banner, headed by Megan Ellison.
Over the past year, Ellison has come onboard to finance pictures such as Paul Thomas Anderson's "The Master," "The Wettest County" and Kathryn Bigelow and Mark Boal's untitled project about the hunt for Osama bin Laden. And last May, Creative Artists Agency attached "Fast Five" helmer Justin Lin and producer Robert Cort to the two-picture "Terminator" package that sold to Annapurna for around $20 million in an auction at the Cannes Film Festival.
In almost every case, Annapurna has come onboard as part of the packaging process before any of these projects were brought to a studio. (Ellison's brother David, by contrast, has made a name for himself by boarding studio tentpoles, such as "Mission: Impossible -- Ghost Protocol" and the "Star Trek" sequel, at the financing stage.)
Outside financing has fostered other nontraditional development.
India's Reliance Group invested $325 million in DreamWorks, and gave CAA clients Brad Pitt, Jim Carrey, Brett Ratner, Jay Roach and Julia Roberts $2 million each to develop films. It provided $5 million to Imagine Entertainment to launch an inhouse writers lab to produce scripts. These development funds, however, have yet to yield any projects.
Though it may feel like fewer specs are being sold to studios these days, some reps believe the majors are still willing to take on such work if the material feels right, as it was with Fox's "Chronicle," a low-budget horror pic that's already passed $50 million at the domestic box office.
And at least one lit agent is adamant that spec sales aren't dead, and that the reason so many go unnoticed is because a simple pitch with no one attached doesn't arrive with the same fanfare that a pedigreed package typically does.
"Packages just jump out more in the media because of the talent attached," the rep says. "Let's say I sell a pitch for $375,000 but then someone else sells a pitch with Tom Cruise attached. That just makes a bigger splash." What: Studios see pre-packaged projects as more efficient, less costly.
The takeaway: Packaging gives filmmakers more control over mid-range budget pics.
Pre-packaged films find greenlight
Producers get go-ahead for medium-budget pics
Steve
Carell’s involvement with 'Crazy Stupid Love' helped sell it to
studios, which are increasingly emphasizing tentpoles, like
'Transformers — Dark of the Moon.'"It's really more about making (movies) and less about developing them in today's marketplace," says one lit agent.
As one manager puts it: "Companies like Relativity only want packages they can pull the trigger on. They don't have the time or attention span to develop something from scratch. They assume that's your job, and it's why you're bringing a script to them in the first place."
None of that is expected to change, as the corporatization of Hollywood has made studios less likely to take risks on unproven projects, and instead turned their attention to big-budget tentpoles that can perform as franchises at the box office and in retail aisles.
Since the 2007 writers' strike and the 2008 recession, the studios have felt more pressure to appease parent companies that have become more cost-conscious and profit-hungry. They increasingly need to produce content that moviegoers will instantly recognize and embrace. Last summer alone saw the studios focused on familiar properties like the Transformers, the Smurfs, Thor, Green Lantern, Captain America and Planet of the Apes.
But even as they devote their development dollars largely to tentpoles, studios still have distribution pipelines to fill. They need to feed the megaplexes year-round, even if they're not directly creating that product.
That's opened the doors for producers to put together the rest of the studios' slates with original fare.
"Ten years ago, studios would take a package, but they weren't necessarily looking for them," one top agent at a tenpercentery tells Variety. "Now it's more of a priority. Studios see them as an opportunity to put money into something that they know is going to happen instead of paying a couple million on developing something that will never happen."
That doesn't necessarily mean it's easier to get a greenlight.
Tenpercenteries need to assemble packages that grab the attention of studios bosses and are easily marketable to moviegoers.
The packaging process, in fact, is now being discussed before scripts are shopped to the studios, and agents and managers are being trained to do the extra legwork to make projects salable.
Warner Bros.' "Crazy Stupid Love" was a spec that several studios were high on when it was put on the auction block a couple years ago. What helped attract attention to the romantic comedy wasn't just its scribe, Dan Fogelman -- hot off Disney's "Cars" and "Tangled" -- but the attachment of Steve Carell as its star.
Having set up a number of high-profile videogame and comicbook adaptations at the studios, Adrian Askarieh has moved to take the independent route to package his own projects, such as "Alien Sleeper Cell," an alien invasion pic that Morgan Davis Foehl will write and Bill Block ("District 9") will produce through QED Intl. Askarieh is taking a similar approach with "Just Cause," an adaptation of Eidos' hit vidgame -- with Michael Ross ("Turistas") scripting and Eric Eisner's L+E Pictures co-producing -- in order to retain more creative control and speed up the development process.
Most recently, even the music industry has gotten involved: ICM has begun packaging a narrative-style pic revolving around music by the Grateful Dead, after being granted unlimited access to the band's music catalog.
Another package that drew attention was Universal's deal to buy an R-rated college-based comedy that will star Seth Rogen and Zac Efron, based on a script by Andrew Cohen and Brendan O'Brien. Rogen will produce with Evan Goldberg through their Point Grey Pictures shingle.
The commitment of additional talent early in the process has helped boost the pricetag of such deals, reps say, doubling or even tripling what they might have landed for a traditional spec sale in the past.
In the Rogen-Efron deal, the scribes pulled in seven figures and the thesps pocketed higher-than-usual quotes along with backend fees after a bidding war took place to secure the project. Rogen will earn $8 million on top of a seven-figure producing fee.
Locking down talent, however, can prove just as difficult as selling a project to a studio.
Just getting talent to read the material can hold back a package, reps say. But it doesn't stop there.
"It's one thing to get the right talent to like the material and come onboard. It's a completely other thing to get that director or actor to read it," says one lit agent. "Sometimes it takes three days, other times it takes them three months, so a lot of the issues we run into come down to timing."
The involvement of multiple agencies can also cause delays, considering that each has its own idea regarding who is right to topline a particular piece of material.
For the raunchy college comedy set up at Universal, UTA and Principal repped Rogen. The tenpercentery also repped Goldberg. Efron's deal was handled by CAA and Alchemy, while the scribes are also repped by CAA.
Financing is a key factor that often comes into play when packaging such projects before they get their footing at a studio.
A handful of auteurs got their projects up and running thanks to the Annapurna Pictures banner, headed by Megan Ellison.
Over the past year, Ellison has come onboard to finance pictures such as Paul Thomas Anderson's "The Master," "The Wettest County" and Kathryn Bigelow and Mark Boal's untitled project about the hunt for Osama bin Laden. And last May, Creative Artists Agency attached "Fast Five" helmer Justin Lin and producer Robert Cort to the two-picture "Terminator" package that sold to Annapurna for around $20 million in an auction at the Cannes Film Festival.
In almost every case, Annapurna has come onboard as part of the packaging process before any of these projects were brought to a studio. (Ellison's brother David, by contrast, has made a name for himself by boarding studio tentpoles, such as "Mission: Impossible -- Ghost Protocol" and the "Star Trek" sequel, at the financing stage.)
Outside financing has fostered other nontraditional development.
India's Reliance Group invested $325 million in DreamWorks, and gave CAA clients Brad Pitt, Jim Carrey, Brett Ratner, Jay Roach and Julia Roberts $2 million each to develop films. It provided $5 million to Imagine Entertainment to launch an inhouse writers lab to produce scripts. These development funds, however, have yet to yield any projects.
Though it may feel like fewer specs are being sold to studios these days, some reps believe the majors are still willing to take on such work if the material feels right, as it was with Fox's "Chronicle," a low-budget horror pic that's already passed $50 million at the domestic box office.
And at least one lit agent is adamant that spec sales aren't dead, and that the reason so many go unnoticed is because a simple pitch with no one attached doesn't arrive with the same fanfare that a pedigreed package typically does.
"Packages just jump out more in the media because of the talent attached," the rep says. "Let's say I sell a pitch for $375,000 but then someone else sells a pitch with Tom Cruise attached. That just makes a bigger splash." What: Studios see pre-packaged projects as more efficient, less costly.
The takeaway: Packaging gives filmmakers more control over mid-range budget pics.
Friday, December 30, 2011
THR: Foreign Box Office
Major Hollywood Studios Set Foreign Box Office Record in 2011
Warner Bros.
"Harry Potter and the Deathly Hallows Part 2"
Paramount leads the way with $3.19 billion, a company and industry overseas record; Warners and Disney follow No. 2 and No. 3.
Another year, another foreign box office record.
While the major U.S. Hollywood studios faced a fair share of hurdles in the domestic market, offshore box office for “big six” notched a record $13.6 billion in 2011, according to preliminary studio figures.
That’s a seven percent increase from 2010’s record take of $12.7 billion, which marked a 20 percent leap from the 2010 figure thanks largely to the astonishing $1.476 billion offshore take last year of Avatar. While the percentage gain this year is comparatively modest, a new record is still a new record.
“Overall, admissions in 2011 remained constant with 2010,” said Veronika Kwan-Rubinek, Warner Bros.’ president of international distribution. She noted that the appeal of films exhibited in 3D has not diminished overseas, and that six of the year’s top 10 foreign grossers were presented in that format.
PHOTOS: Top 15 Grossing Threequels of All Time
The year’s biggest title, Warner’s Harry Potter and the Deathly Hallows Part 2 drew 54 percent of its total $953 million in foreign box office from 3D venues. Anthony Marcoly, president of Paramount Pictures International, said his studio’s top grosser, Transformers: Dark of the Moon (which grossed $771 million in the year), “saw 74 percent of the international grosses come from 3D.”
Then there was the China factor. Marcoly said the market “proved to be [Paramount's] highest grossing international territory for the first time,” generating for the distributor’s films $303 million in box office this year.
Said Warner’s Kwan-Rubinek, “The biggest growth story came from China, which increased more than 30% to gross nearly $2 billion for the year. China remains the biggest digital and 3D footprint outside the United States, with over 3,000 3D screens.”
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The bad news is that the import quota imposed by the Chinese State Administration of Radio, Film and Television limiting foreign-made films to 20 titles yearly remains firmly in place despite pleas from the World Trade Organization. As important, the extremely low rate of rentals return to foreign distributors – on average 15 cents of each box office dollar – also remains the practice.
Said one major studio international exec, who asked anonymity, “China is still a boom town (if you get your films in), but there is no movement relative to quantity of titles accepted or revenue share.”
Paramount was easily the year’s top studio in terms of foreign box office, notching a company record of $3.19 billion – the first time any Hollywood major has exceeded $3 billion in foreign box office in a single year. Paramount’s take was 60 percent higher than its comparable 2010 figure, and 56 percent ahead of the company’s previous box office record established in 2008.
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Besides director Michael Bay’s Transformers, Paramount released Kung Fu Panda 2 ($501 million), Thor ($268 million) and Captain America: First Avenger ($192 million). Still in release are Mission: Impossible – Ghost Protocol and DreamWorks Animation’s Puss in Boots, which are expected to notch $201 million and $260 million, respectively, by the end of the week.
Warner Bros., last year’s top-grossing studio beating 20th Century Fox by a whisker, finished a firm second this year with $2.860 billion in foreign box office. It marked the company’s second biggest offshore year ever, down 2 percent from the $2.93 billion grossed in 2010.
Other Warner’s gross generators beside the latest Harry Potter sequel were The Hangover Part II ($330 million), Final Destination 5 ($120 million) and Green Lantern ($118 million). Still in release is Sherlock Homes: A Game of Shadows, which has captured $88 million overseas thus far.
No. 3 of the big six was Disney, which projects 2011 foreign box office of $2.2 billion, down 5 percent from the $2.3 gathered last year, which set the company’s overseas record. Top title by far for the year was Pirates of the Caribbean: On Stranger Tides, which tallied $802.6 in offshore box office, more than three times its domestic gross. Cars 2 came in with $368.3 million, nearly twice what it grossed in the U.S. and Canada.
Fourth in box office rankingswas Fox, which while it lacked an Avatar this year, boasted of a range of titles that performed at least reasonably well offshore. The studio reported $2.150 billion in foreign box office, down from the $2.92 billion reported in 2010. Top titles were Rio ($343.9 million, nearly twice its domestic gross), Rise of the Planet of the Apes ($306 million) and Black Swan ($222.5 million).
Sony came up with $1.830 billion for the year with live-action/animation title The Smurfs leading the list of winners ($416.6, nearly three times its domestic gross), and Steven Spielberg’s The Aventures of Tintin: The Secret of the Unicorn – which Sony co-distributed with Paramount offshore months before its Dec. 21 domestic opening ($265 million). The Tourist starring Angelina Jolie and Johnny Depp scored well foreign, drawing $221.1 offshore of which $140.7 derived from Sony-handled territories in 2011.
Universal reported $1.3 billion in 2011 foreign box office, 9 percent ahead of the comparable 2010 figure. Its biggest title by far was the latest in the turbo-charge fast car franchise, Fast Five, which grossed $419 million offshore. The latest Roman Atkinson comedy, Johnny English 2, did well foreign grossing $154 million while surprise comedy hit Bridesmaids took in an impressive (comedies often don’t travel well overseas) $119 million.
Key independent Summit Entertainment says it grossed $753.7 million on the foreign theatrical circuit this year, with the latest in its girl-loves-vampire sequel, The Twilight Saga: Breaking Dawn Part 1, generating an estimated $410 million of the total. Summit also said that Cannes Festival top prize-winner, Tree of Life, has grossed $48 million offshore to date (including territories handled by Fox and other distributors.)
An interesting aspect of the 2011 overseas was the accelerated pace of major studio acquisitions of local-language product playing in various offshore markets. Notably successful in this regard was Universal release of Office Romance in Russia, which grossed $12 million; and Sony’s handling in the same market of Vysotsky: Thank God I’m Alive, a biopic of a legendary Russian figure, which has drawn $27 million so far in Russia alone.
2011’S TOP 10 FILMS OVERSEAS
TITLE FOREIGN B.O. DOMESTIC B.O.
(Distributor)
(In
Millions) (In Millions)
Harry Potter and the Deathly Hallows – Part 2 (Warner Bros.) $953 $381Pirates of the Caribbean: On Stranger Tides (Disney) $802.6 $241.1
Transformers: Dark of the Moon (Paramount) $771 $352.4
Kung Fu Panda 2 (Paramount) $501 $165.3
Fast Five (Universal) $419 $267.7
The Smurfs (Sony) $416.6 $142.6 million
The Twight Saga: Breaking Dawn – Part I (Summit) $410 $267.7
Cars 2 (Pixar/Disney) $368.3 $191.5
Rio (20th Century Fox) $343 $143.6
Rise of the Planet of the Apes (Fox) $306 $176.7
SOURCE: Studio figures.
Thursday, December 29, 2011
Studio spending in 2011
2011: The Year The Big Projects Died & Studios Discovered (A Little) Fiscal Responsibility
It was also finally the year where the reckless spending of Hollywood seemed to finally slow and the bean-counters took charge. In a year with high-profile flops like "Mars Needs Moms" and "Cowboys And Aliens," when the domestic box office provided few smash hits, most of the major studios started to get cold feet about some of their most riskiest, most expensive projects, and more importantly, the dwindling possibility of the return on their investment. It was, seemingly, the year when Hollywood stopped spending like there was no tomorrow and put on the breaks to some big-time projects, with almost every major studio rethinking their in-development pictures to some degree or another. Who were the biggest spend-thrifts in Hollywood in 2011?
No one trimmed more fat this year than Universal, who've famously taken a bath on a number of expensive pictures in recent years. Few other companies would have backed a stoner comedy take on "Land of the Lost," Michael Mann's hugely expensive digital gangster epic "Public Enemies," an R-rated period horror flick starring Benicio Del Toro, an Iraq war drama from Paul Greengrass, or the unlike-anything-else "Scott Pilgrim Vs. The World," with all but the last costing well over $100 million, and none doing gangbusters at the box office; some might have drawn even eventually, but not all. With "Your Highness," "Dream House" and "Cowboys & Aliens" continuing the trend in 2011 by tanking, and tanking hard, the studio has clearly rethought their plans. as the year developed. It began in March, when despite Tom Cruise in the lead role, one of the most highly sought-after directors in town, and King Midas James Cameron in the producer's chair, Universal pulled the plug on Guillermo Del Toro's $150 million dream project, H.P. Lovecraft adaptation "At The Mountains Of Madness," after the filmmaker refused to budge on his desired R-rating. A disappointment for film fans? Absolutely. The smart move for the studio to take? Absolutely; given "The Wolf Man" failed to make its budget back despite much better-known source material, why would Universal make the same mistake twice?
And it seemingly gave them lack of confidence across the year, with several giant projects falling under the axe at the company. Paul Greengrass' "Memphis," following the last days of Martin Luther King's life, was gearing up for a shoot in the early summer, with a February 2012 release planned, but in April, the film was scrapped, the public line blaming a lack of approval from the King estate, who were very critical of depictions of infidelity in the Greengrass script. We're sure that didn't help, but we imagine that the idea of Universal getting back into bed with the man who went wildly over schedule and budget on "Green Zone" was never the most appealing for the company. It wasn't just auteurs who got screwed; commercially-minded helmer McG was set to adapt board game "Ouija" into a family-friendly tentpole, but the studio elected to pay a whopping $5 million penalty to Hasbro rather than actually make the damn thing.
In all fairness, everyone's been tightening their belts in the last twelve months. Despite "Pirates of the Caribbean: On Stranger Tides" making over a billion dollars worldwide, the company flinched when it came to greenlighting "The Lone Ranger," which came from the producer, director, writers and star of the first three 'Pirates' movies, at a $250 million budget. With Westerns not especially popular, and Disney hurting from the under-performing "Tron: Legacy," the outright disaster of "Mars Needs Moms" and the spiraling costs on "John Carter," the company shut down pre-production on the Johnny Depp/Armie Hammer vehicle. Unlike the films above, however, it did move on forward; producer Jerry Bruckheimer trimmed the budget by about $35 million, managed to keep director Gore Verbinski and all the original cast, on board, but it's another sign that, short of "Avatar 2," no single project or talent is above the cost-cutting that's becoming more and more commonplace.
It wasn't the only film the studio (who famously switched to a four-quadrant tentpole-only strategy a couple of years ago) put on the scrap heap; they'd signed their new boy wonder Joseph Kosinski up to direct a version of his own graphic novel "Oblivion" when "Tron: Legacy" was still in post-production. But after quite some development, the film was dumped by Disney in March, perhaps because it was darker than their usual remit, or perhaps because 'Tron' didn't live up to expectations, commercially or artistically. Still, there was a happy ending, with, as we've seen, the otherwise greenlight-shy Universal stepping up the $100 million budget with 'Mountains of Madness' refugee Tom Cruise in the lead.
Warners meanwhile, have been taking a slightly different tack with their new tentpoles, now that megafranchises Harry Potter and Batman are wrapping up; like everyone from Marvel to J.J. Abrams, they're mostly eschewing big stars for cheaper, rising names (with certain exceptions; Clint Eastwood's "A Star Is Born" chose to wait for Beyonce when she got pregnant, rather than recasting). "Akira" is perhaps the best example; originally set to be a $150 million+ tentpole with Albert Hughes directing, and A-listers like Brad Pitt and Keanu Reeves courted for the lead, the film was shut down and retooled when it couldn't land a star, with the budget shrunk down to a mere $90 million, new director Jaume Collet-Serra put in place, and Garret Hedlund given the lead. Meanwhile, relative unknowns Joel Kinnaman and Kit Harington got the title roles in "Arthur & Lancelot," but even in that case, saving on above-the-line fees wasn't enough to get it made; only a few weeks ago, with the budget soaring to $130 million ($40 million more than originally intended), the studio put the film into turnaround, letting Dobkin take it to other suitors.
Indeed, it seems that having an A-lister on board isn't even enough to get it done at Warners. Bradley Cooper was going to play Lucifer in "Paradise Lost," but Alex Proyas' film was also postponed for budgetary reasons earlier in the month. Whether it sees the light of day again remains to be seen. And when George Clooney dropped out of "The Man From U.N.C.L.E," Steven Soderbergh and the studio couldn't agree on a star who could take on the project within the $60 million budget earmarked, so the director walked, although Warners have since hired Guy Ritchie to try and carry on the project.
It seems like every studio around had similar issues about one project or another. 20th Century Fox decided that letting Darren Aronofsky get his hands on (a likely R-rated) "The Wolverine" might not be the most commercial of takes on the X-Men franchise, and mutually parted ways with the "Black Swan" director, with the much safer James Mangold stepping in, although the film still seems to be without a firm start date. Paramount were gearing up to make Doug Liman's long-in-the-offing moon-set actioner "Luna," with Andrew Garfield, Chris Evans and Zoe Saldana all involved, but the studio's financing partner Skydance (headed up by David Ellison) withdrew, and Liman moved on. Sony had it worse than anyone, arguably; they got cold feet on a film they were halfway through shooting, with a production hiatus on "Men In Black 3" extended by several months in order to sort out script problems, with at least two A-list scribes being brought on, as the budget headed towards the $250 million mark. We'd be surprised if they made the same mistakes again.
The fact is, $200 million tentpoles aren't going anywhere. But everyone in town has been burnt by something recently, and 2011 was the year when the credit crunch finally seemed to catch up to studio executives. Does this mean that the era of risk-taking in mainstream cinema is over? Well, perhaps not. Annapurna Pictures, headed up by Megan Ellison, have made a habit of stepping in to finance films once thought left for dead like John Hillcoat's "The Wettest County" and Paul Thomas Anderson's "The Master," when others have dropped out, and it's become a home for people like Kathryn Bigelow, Wong Kar-Wai, Andrew Dominik, Spike Jonze, Charlie Kaufman and Bennett Miller. These films are likely not PG-13 tentpoles, but Ellison clearly thinks there's money to be made in backing her favorite filmmakers. With any luck, there'll be more like her, and fewer mid-budgeted versions of "Akira," on the way in 2012.
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