By David Poland poland@moviecitynews.com
So quiet…
It really is odd how quiet things are right now… September is ending… we’re past the Jewish holidays… so very quiet…
I enjoyed getting through the Stradella Road Theatrical Market Study, but I’m a bit disturbed to find at least two online outlets of note misreading the results in significant ways. The Wrap is blaring a headline – “Do Movie Marketers Waste Their Money on TV?” sub-hed, “Study finds that youth learn about movies online and from friends, not from television”- that is no only a gross oversimplification of the findings, but factually inaccurate, according to the study.
Plenty of bad studies come out every year and get overhyped, but when a good one lands and the media rushes to mischaracterize it… oy.
All this hoo-ha about Summit going on a buying spree… I mean… people… math. But Summit eating Lionsgate or MGM right now would be similar to AOL eating Time-Warner or, in movieland, Artisan eating Lionsgate (the opposite happened, in reality). As far as Summit eating WeinsteinCo… good luck with that. What, exactly, would Summit be buying?
The reason that Summit is floating this notion that they are buyers is that it is the takeover target, not the other way around. They should be cash-flow-heavy on the presumed Twilight-franchise revenue and they have no costs that need to be continued. The company would likely be valued at over a billion dollars by Time-Warner or Viacom on the basis of that franchise alone at this point and with all due respect to the management… will never likely be worth more than it is worth RIGHT NOW.
The smartest movie in Hollywood right now, similar to Mark Cuban selling Broadcast.com when he did for what he did, would be selling Summit to a major. But it would not be the first company that got itself obsessed with empire building over the smart financial play.
Specifically, trying to consume the MGM library or the Lionsgate library would lead to a company like Summit going down exactly the same road as Lionsgate and MGM… anxiously trying to sell for year after year after year… never able to build the company to being bigger than the library, no matter how many great and successful opportunities come their way, from Saw to Tyler Perry to Bond to The Hobbit.
Everyone who is in the financials of the movie business wants to have the opportunity that Summit has right now… getting out with a big fat payday after hitting the home run on one property early in the history of the company. The scale can be different. For someone to come along and eat WB, they would be eating Potter and DC, etc, and so the movie side alone would have to be valued at more than $10 billion on that, the library, and the synergistic values alone.
This is why, ultimately, Time-Warner got out of New Line, which had finished its likely peak franchise and from there on, would just be in the movie business. And heck, look at the year already produced New Line product had after the company was shut down! But not enough to keep a second business in business. Not for Time-Warner. (I think this was a short-sighted mistake… but that’s another column.)
Anyway…
What The Weinsteins were offered by Disney back before the split would be snapped up in seconds by TWC now. But no one is offering. And if Summit isn’t thinking about funding Dimension/TWC to a few hundred million a year, what is the point, really? But why would Summit want to be eaten alive by The Weinsteins… makes no sense.
And LOOK, what a surprise… another hack is out there taking a shot across the bow at Universal… now pimping the idea that the head of production and head of marketing should take over from the former head of marketing and former head of distribution from Focus… a ha… production and marketing come up short this year, so they promote the leaders of those departments… interesting strategy… sounds a lot like the one that led to where things are right now.
My take… Universal was slow to respond to the changing economics of the industry and greenlit a handful of movies at exaggerated prices that ended up losing money. Only one lost A LOT of money. In a cyclical business, the Universal situation is not desperate. But God knows, the media wants it to be. And NBC/U management may be listening to that hum. If they are going to make a change – and they might – they need to make a big change. If they just keep pushing junior (albeit very high ranking) staff into higher positions, nothing much will change… by definition.
I am not calling for this change. I believe Universal will rebound without it and that all the drama about this summer has been way overblown. But if new leadership is coming, if it’s not a sea change… a new vision… that the choice to change is not really a choice to change at all.
The strangest “quiet” that’s going around is the lockdown on info coming out of Disney regarding the future of the studio. The discipline is impressive.
Iger has stated many times that he wants a completely new 21st century strategy for the studio, but has never articulated what that is. And now, after the old guard has been vanquished, we sit here with no word on how they plan to proceed.
I would say that we know exactly how they are proceeding, Wreck… as noted before, they have pretty much locked into a full slate by 2011. No?
The slate, especially, is in flux. Sure, they have 2010 pretty much sewn up, but 2011 is a huge question mark, especially because of 1) their nascent partnership with Dreamworks and 2) their purchace of Marvel. Just look at the 2011 summer season and tell me where Disney can program their films without stepping on a potential Marvel release?
But, aside from that, it’s really Iger’s plans for home video and alternate delivery streams that need addressing. As you know, he’s always been a huge industry advocate for collapsing the delivery window, and, so far, he’s been on the losing side of that fight. Cook, an old, old distribution guy, has consistantly sided with exhibition. What will the new head of the studio, wherever he’s from, do to press his boss’s agenda? How will he address the already changing marketing strategy for the company? How will the development change? A lot of questions need answered, and so far, there hasn’t been a whiff.
3 best selling DVD’s of 2009 by revenue:
3. Bolt-$80 million
2. Madagascar 2-$101.5 million
1. Twilight-$164.7 million
And that doesn’t include rentals…with New Moon and Eclipse coming out in 9 months, Summit is going to be so flush with cash that I wouldn’t doubt for an instant that they’d have the capability to buy maybe MGM.
Twilight is also one of the best films ever made.
Way overstating, EthanG. Add up every dime of profit from both the films and you’re still under $750 million. They couldn’t buy Marvel with that…
I’m not saying they won’t have cash… especially since they don’t spend. That’s what makes them a target.
Speaking of Jewish holidays…David, will you be reviewing A SERIOUS MAN? Or did you and I missed it?
K-STEW POWER.
GET ON YOUR KNEES. NEW MOON WILL MAKE 476 MILLION in its first week of release. BELIEVE THAT.
TWILIGHT 4 EVER. K-STEW + FANNING = APOCALYPTIC AWESOMENESS that YOU WILL NOT BE ABLE TO DENY.
NEW MOON. I am going to see it SEVENTEEN TIMES in its first four days.
ALSO: KRISTEN STEWART SHOULD BE THE NEXT BOND GIRL. GOOD IDEA.
I would like to see ASM again before doing the review
“Way overstating, EthanG. Add up every dime of profit from both the films and you’re still under $750 million. They couldn’t buy Marvel with that…”
I’m not sure about that. You’re looking at possibly $700 million next year just in DVD sales and rentals domestically. And probably $1 billion worldwide in box office for New Moon and Eclipse at least. Add in ancillaries and overseas DVD’s….
Regardless this franchise has bought them something MGM and no other mid-major except Lionsgate has, and that’s cachet.
As for not spending, “Knowing” was an in-house production unless I’m mistaken with a reported $50 million budget. They’re spending probably a quarter billion to produce and advertise New Moon and Twilight between now and next June, and they’re financing “Letters to Juliet” which they hope to be a comedic summer blockbuster, and co-financed Pattinson’s film “Remember Me” coming out next year. If anything they’re doing more in-house than any other non-major aside from Lionsgate.
Like I wrote, Ethan… those kinds of numbers (however inflated) are what might make a buyer interested in buying Summit. But it is not the kind of money that translates into the deep pockets needed to keep a full studio in business.
Buying half of MGM or Lionsgate is one thing… but then you have to operate it… because the value of these companies is not going up without The Next Thing… that costs a lot of money… and it’s a lot of risk… it’s how you lose your billion nest egg completely instead of growing in a reasonable way. It is how companies go out of this business. (It’s why MGM is in so much trouble again.)
Flip side – again – is having that kind of war chest makes you a target for the Sam Zells and Carl Icahn of the world… and Summit, right now, is a lot more attractive than Lionsgate or MGM. But not nearly as much as an ongoing concern.
I AM NOT GETTING THE SENSE THAT ANYONE IS BOWING.
KRISTEN STEWART IS GOD.
Wait, which Universal pic lost a LOT of money? Land of the Lost, right?
Comcast/NBCU is a horrible idea. Whorrable. Leaderless and bloated. It would dissolve at about twice the speed of AOL-TW and make the clunky CBS/Viacom machine look fluid.
Not to be picky, but there is no way that Knowing cost $50M. I know that is the reported budget out there on websites, but there’s no way that is true. And it’d be one thing if Knowing did $300M worldwide, but it did $182M. Though Knowing is obviously profitable and adds to Summit’s cash, isn’t Twilight really the reason Summit is flush with cash?
Not sure if anyone knows this, but does Summit really get most (or all) of the profit from the Twilight movies? Doesn’t Stephanie Meyer get a could chunk of the profits? Not saying she has a deal similar to Rowling, but it would be shocking if she wasn’t making out nicely from the movies.
Companies go out of business because they overspend. Vantage might still be with us if they hadn’t gone hogfuck on NO COUNTRY and THERE WILL BE BLOOD.