Disney (and others) at the Box Office - Current State of Affairs

[BrianLo]

Individuals have said "we know its inaccurate," when in fact there is reasonable evidence that it's a useful tool. There might be outliers like Elemental that do not fit within the model, but that does not mean we throw the model out completely as useless or invalid.

Perfect, so let's tweak it to something slightly more accurate!

The 2023 loser films you mentioned (Indy, Wish, Marvels, etc.) likely have hundreds of millions more to amortized. Disney will be slowly paying down Indy 5 and Wish until the early 2030s. Unless they determined that those films were not going to make any “Ultimate Revenue” over the next decade, which they have not indicated. That’s where @TP2000’s missing hundreds of millions went.

Correct, so by your own understanding, the "Ultimate revenues" are accounted for. TP is and has misinterpreted this like there is another 600 million of loses yet to be reported, but really it's all reasonably accounted for. They know a very clear trajectory of all these films post-theatrical lifecycles at this juncture. The net results are a neutral amortization over a decade. The actual loses were front-loaded.

Anyways, I'll just re-iterate the figures also continue to not match the trades either. There's still an over-accounted for 600 million, because the calculations are in fact inaccurate and non-holistic. As you say.

It's really quite simple to fix, fortunately. We've got a ton of data now thanks to all their recent failures.

 

[erasure fan1]

Isn’t it more helpful to know accurately how much instead of a fake estimate?

But it's all fake estimates, that's the problem. And if there's no reported budget, that's when it's a more inaccurate estimate.

I’m not asking you to change that. I’m asking you to utilize the more accepted industry 2.5 rule of thumb. That one that actually calls loses better.

I'm a bit confused. The 2.5x rule of thumb is what has been used. Let's use the first omen like @TP2000 said. 2.5x the 30mil budget would be 75mil. That would be 24mil shy of profit. Every estimate I've given was that same formula. The problem I've seen is the ones who leave out a marketing budget. We saw that a lot with elemental and mermaid.

 

[Disney Irish]

But it's all fake estimates, that's the problem. And if there's no reported budget, that's when it's a more inaccurate estimate.

If its all fake estimates, and everyone agrees, then what's the point of posting any of it and talking about Disney's box office based on the same fake estimates then other than to air out some silly grievance against Disney?

 

[BrianLo]

I'm a bit confused. The 2.5x rule of thumb is what has been used. Let's use the first omen like @TP2000 said. 2.5x the 30mil budget would be 75mil. That would be 24mil shy of profit. Every estimate I've given was that same formula. The problem I've seen is the ones who leave out a marketing budget. We saw that a lot with elemental and mermaid.

It doesn't involve grossing down the box office figures. It's actually much simpler than you all think it is.

It's an estimate of how much the film made or loss on the Studio end, not an estimate of costs or revenues. Essentially it's always been a simple checkmark of what a film needs to clear in the box office to balance itself out. The 2.5 rule is really most applicable to a conversation of break even. A quick mental tally that if a film makes more than 2.5x the production cost in the box office, yes the film has broken even for the studio.

So if a film costs 30 million to make, it breaks even with a 75 million box office (NOT a 90 million box office as being mis-reported).

For the First Omens current 20 Million Domestic Take and 33 International Take

1) ((Production budget*2.5) - Box Office)/2=
- 30 x 2.5 = 75
- 75 - Box Office (53.6) = 21.4
- 21.4 / 2 = 10.7 Million in net Studio Loss


What we are left with for Revenues
1) The Production Budget was 30 million
2) The Marketing Budget we *think* was 15 million**
3) The Residuals are unknown
4) The Interest is unknown
5) The Participation should be zero since there is no profit

**This would be typical for a Disney movie that broke even, though marketing budgets are reduced if a film fails out of the gate or potentially doubled+ when they are extremely successful. The whole point is the marketing budget and additional costs are not fixed, the only anchor we have is the Production budget.

What we are left with for Costs
1) The film made 12 million at the Domestic Box Office
2) The film made 13.44 million at the International Box Office
3) The film has made some unknown post theatrical revenue - Usually about double the unknown additive costs

Similarly, the revenue are not really fixed, the only anchor we have is the Box office.

So the film cost perhaps 50 million dollars and made 39.3 (from post office and post theatrical) and will have lost 10.7 million for the studio. Or it cost 75 million and made 64.3 million, but lost 10.7 million for the studio.

It doesn't really matter, at least you have three accurate numbers to vacillate over. A production Cost, a Box Office and a better prediction on if the Studio made money.




I think where everyone is running afoul is that they are pretending like they accurately know the marketing costs - and we really don't. It's not that a 2.5X rule ignores that, it just comes out in the wash - it's baked into the presumption.

 

[Tony the Tigger]

If its all fake estimates, and everyone agrees, then what's the point of posting any of it and talking about Disney's box office based on the same fake estimates then other than to air out some silly grievance against Disney?

 

[erasure fan1]

If its all fake estimates, and everyone agrees, then what's the point of posting any of it and talking about Disney's box office based on the same fake estimates then other than to air out some silly grievance against Disney?

The point is, it will always be off. No one can say their way is more accurate than someone else. If you know the estimated budget, and we know the domestic and foreign box-office, it's not that hard to figure out when something underperforms. So what's the point of talking about any of this? The problem I see is, too many are so invested in Disney that they can't see the problems. If we were talking about Disney killing it at the box office, you or anyone else trying to defend Disneys performance wouldn't be saying a word. There wouldn't be any issues, just a bunch of, yea Disneys doing great.

 

[BrianLo]

If its all fake estimates, and everyone agrees, then what's the point of posting any of it and talking about Disney's box office based on the same fake estimates then other than to air out some silly grievance against Disney?

Because this all really started as people being upset with the notion that TLM, a movie with a 2.3X multiplier and an unusually generous domestic split, was probably within the band of break even a lot earlier than assumed. It was too much to handle for largely ideological reasons.

So the goalposts were shifted that it needed 3X (750 million) in the box office and they've been eagerly running with that misdirect for over a year. The trouble is the math is not mathing - anyone who tries to imply otherwise just has some weird mental hang up that there were a couple of disappointing movies that also probably (not probably, we know they did from the trades and company comments) broke even.

TLM would have made a generous amount of money at 750m, with lots of participation for its actress to boot.

BUT good news, the company followed it up with four massive stinkers - that if the goalposts weren't moved we'd all just more accurately talk about how much those ones really lost instead of playing with the faked goalpost.

 

[BrianLo]

The point is, it will always be off. No one can say their way is more accurate than someone else.

I have vigorously defended and demonstrated a well known rule of thumb. I'm not claiming it's perfect.

I've demonstrably shown it to be more accurate than the one we've had to listen to here for a year - which missed the data we do have quite spectacularly.

Why do we all have a problem with using something demonstrably more accurate...?

 

[erasure fan1]

So if a film costs 30 million to make, it breaks even with a 75 million box office (NOT a 90 million box office as being mis-reported).

I haven't seen that 90mil break even being reported. Of course I'm not online 100% of the time so I could have missed it. And if that's true, yea it's wrong. Almost everything I've seen follows the same formula that you're using. Again, it's an estimated break even point. Is it the end all be all? No absolutely not. It's just funny how it wasn't a problem when talking about Avatar or guardians 3.

 

[Wendy Pleakley]

5) The Participation should be zero since there is no profit

I think that profit sharing deals on movies are a thing of the past.

Forrest Gump was just one high profile example that went to court when the studio claimed it didn't make money, despite being a colossal hit.

Anyone with the clout to get a share of revenue today isn't going to play that game. They'll just negotiate a flat percentage to avoid any such issues. Harrison Ford got 0.5% for The Force Awakens for example, just straight from the box office, no mention of profit.

For what that's worth. Still part of the equation, but a movie that loses money could still pay a percentage to talent.

 

[BrianLo]

I haven't seen that 90mil break even being reported. Of course I'm not online 100% of the time so I could have missed it. And if that's true, yea it's wrong. Almost everything I've seen follows the same formula that you're using. Again, it's an estimated break even point. Is it the end all be all? No absolutely not. It's just funny how it wasn't a problem when talking about Avatar or guardians 3.

I started with this when TP said the break even for Apes 9 was 460 million or 3x its production cost. Or that Deadpool 3 would have a break even of 750 million or 3x its production cost.

That's kind of how we got here as a woah-woah, those movies would actually be quite successful in those ranges.

I actually did take issue with Guardians 3 a few pages back and said the profit on that was also being miscalculated. As I did Barbie. The threshold for the films starting to break even was way too high, so their take home profits were also significant underestimated. Even after paying their actors handsomely.

 

[BrianLo]

I think that profit sharing deals on movies are a thing of the past.

Forrest Gump was just one high profile example that went to court when the studio claimed it didn't make money, despite being a colossal hit.

Anyone with the clout to get a share of revenue today isn't going to play that game. They'll just negotiate a flat percentage to avoid any such issues. Harrison Ford got 0.5% for The Force Awakens for example, just straight from the box office, no mention of profit.

For what that's worth. Still part of the equation, but a movie that loses money could still pay a percentage to talent.

Ya that's fair, I think there are still thresholds too. The movies that tank don't seem to pay participation generally though (Harrison got none for Indy 5). Nothing for Marvels, Flash, Wish or Haunted Mansion. Big payouts for Guardians 3, Mario and a massive one for Barbie though.

I have a suspicion the deal Harrison made with Force Awakens was more on the exception than the rule end of things. Probably why it was talked about.

 

[Tony the Tigger]

Here’s the thing: we don’t know; we won’t know. None of us are in the biz. None of our numbers or multipliers matter at all.

If you try to figure out my business, I’ll be quick to tell you: you’re not in my business. You’re wrong. You’ll never know all the intricacies and nuances. Guess all you want, it makes no difference.

None of us are in the business of making movies. The end.

Either numbers are announced or not. If not, we don’t know them.

Nope. We don’t.

Nope. Still don’t.

 

[TP2000]

I started with this when TP said the break even for Apes 9 was 460 million or 3x its production cost. Or that Deadpool 3 would have a break even of 750 million or 3x its production cost.

To be fair, I said 460 Million-ish, because it all depends on the box office split of domestic vs. overseas. But that was before Variety reported that Apes 9 budget was actually $160 Million, as earlier reports pegged it lower than that.

Apes 9 has had poor legs this past week and needs a strong weekend globally to put it back on a trajectory to its breakeven of $460-ish Million from the global box office.

Based on the newer information that Apes 9 had a production budget of $160 Million, my math shows this...

Apes 9: Production $160 Million + Assumed Marketing $80 Million + 50% Take of Global Box Office = $480 Million Breakeven

The breakeven can be refined further when you give Disney a 60% cut of the domestic box office, but only a 40% cut of the overseas box office. Which is why a film that over-indexes overseas but does comparatively poorly in the USA, like Elemental did, has a harder time breaking even regardless of its strong overseas box office.

But as I understand it, the model @BrianLo likes to use that's a 2.5X the production budget, the break even for Apes 9 would only be $400 Million, That seems less accurate when so many of Disney's movies are screened widely overseas. And like Elemental showed, that overseas box office can make or break a film getting to a profit.

 

[TP2000]

Speaking of Apes 9, it doesn't look like it is going to get to either one of its breakeven thresholds; $400 Million or $480 Million.

Going into Memorial Day Weekend when several new movies come out, Apes 9 has $244 Million from the global box office but has what the industry refers to as "Poor Legs" and is facing an uphill battle to profitability at this time. Here's the data as of May 23rd...

But not to worry, monkey fans... I've got a holiday sociable to go to later this weekend. I'm not exactly sure how it will help ticket sales, but I'll be sure to ask the cute girl to do the Monkey with me when the band leader plays the right song!

It's Monkey Time kids, and Apes 9 needs all the help it can get at the box office!

 

[Disney Irish]

I haven't seen that 90mil break even being reported. Of course I'm not online 100% of the time so I could have missed it. And if that's true, yea it's wrong. Almost everything I've seen follows the same formula that you're using. Again, it's an estimated break even point. Is it the end all be all? No absolutely not. It's just funny how it wasn't a problem when talking about Avatar or guardians 3.

TP made that claim about First Omen needing $90M to breakeven back in April. It was wrong then and wrong now, and TP has never really corrected it even after @BrianLo pointed it out.

Variety has now stated The First Omen had a production budget of $30 Million, so we can use that lower figure now confidently. If we assume it had a shoestring global marketing budget of $15 Million, The First Omen will need roughly $90 Million at the global box office to break even.

It's opening weekend is trending well below forecasts, even though it's reviews are good. It will be interesting to see where The First Omen lands for the weekend; will it break $10 Million in its domestic opening weekend?

Box Office: ‘Godzilla x Kong’ Staying on Top, ‘Monkey Man’ Swings Into Second and ‘The First Omen’ Gets Crossed Up

"Godzilla x Kong" is facing a sharp drop in its second weekend at the box office, but will stay ahead of the openings of "Monkey Man" and "The First Omen."

variety.com

"Landing a less auspicious debut is “The First Omen,” which earned $3.2 million across Friday and preview screenings. Projections heading into the weekend had pegged an opening north of $14 million; now, it seems the release from 20th Century Studios (owned by Disney) will be lucky to even hit $10 million."

.

 

[erasure fan1]

I think where everyone is running afoul is that they are pretending like they accurately know the marketing costs - and we really don't. It's not that a 2.5X rule ignores that, it just comes out in the wash - it's baked into the presumption.

I don't think most of us are. Some? maybe. It has always been a guess with marketing. It does get reported occasionally but it's a much more difficult number to nail down. I specifically remember having conversations saying that if a movie that's plus or minus by let's say 10/15mil, it could go either way. But when we get a indy, wish, strange world... It's pretty obvious it didn't make it. They still could, eventually, most don't dispute that from what I've seen.

 

[TP2000]

Are we all ready for Memorial Day Weekend, gang? Being a big holiday weekend, we won't know the full weekend Box Office for the weekend until next Tuesday, but here's how the Thursday previews looked.

This should give us a good idea how this weekend will pan out. Yesterday, Apes 9 fell to 4th place. How many of its 4,075 theaters will it keep this weekend I wonder?

The Numbers - Daily Box Office Chart for Thursday June 20, 2024

Daily Domestic Box Office Chart for Thursday June 20, 2024

www.the-numbers.com

 

[BrianLo]

Apes 9: Production $160 Million + Assumed Marketing $80 Million + 50% Take of Global Box Office = $480 Million Breakeven

The breakeven can be refined further when you give Disney a 60% cut of the domestic box office, but only a 40% cut of the overseas box office. Which is why a film that over-indexes overseas but does comparatively poorly in the USA, like Elemental did, has a harder time breaking even regardless of its strong overseas box office.

But as I understand it, the model @BrianLo likes to use that's a 2.5X the production budget, the break even for Apes 9 would only be $400 Million, That seems less accurate when so many of Disney's movies are screened widely overseas. And like Elemental showed, that overseas box office can make or break a film getting to a profit.

I think I might try and explain it a different way. My issue is not your removal of back end revenue, it's that you are using full costing and not back end revenue simultaneously.

It would be more fair to say Apes 9 has a 160 Million budget and 40 million marketing campaign dedicated towards the movies theatrical run/opening. The rest of the marketing campaign is for the back end. In fact much of it is spent after the movie is in theatres. If you don't include those sources of revenue, you shouldn't include those costs for that window.

If you calculate it by that means, your box office breakeven threshold will actually work.

Before you say 'just wait a minute' - the marketing campaigns can and do end. If a movie fails out a gate they stop the marketing as much as possible. If it's highly successful, they lean into the marketing more. But it's basically budgeted for a floor. If you report the numbers and calculate like that, your math will work.

 

[BrianLo]

Going into Memorial Day Weekend when several new movies come out, Apes 9 has $244 Million from the global box office but has what the industry refers to as "Poor Legs" and is facing an uphill battle to profitability at this time. Here's the data as of May 23rd...

I notice you keep leaving out the International trajectory and only report the domestic.

The hold was 35% in International markets last weekend if anyone cares to know.