I noticed on the John Carter Facebook Group that there are a couple of threads where people are talking about the financial performance of John Carter and questioning whether Disney actually lost as much money as they say they did — or even lost money at all. It’s understandable how people can be confused. At the risk of dampening spirits and confusing people even more than they are already confused, here are three Profit and Loss Statements for John Carter:
- An “Actual” — which is “actual” to the extent that is uses the published theatrical gross, makes reasonable deductions for theater share, and reasonable deductions for other revenues (Home Entertainment, TV-Ancillary) and expenses (marketing, overhead, distribution, etc.)
- A “Breakeven” at $452M Box Office Gross which is what it probably would have taken for JC to break even, budgeted as it was.
- A “JC2 Sequel Breakeven” at $350M Box Office Gross which is what I think it would take for a sequel to breakeven with some modest budgetary reductions, the major portion of which would be achieved simply because the one time costs would get spread among three movies, instead of being born by one.
And puhlease! This is not a post that evaluates the politics of it all, the stench/stigma that is attached to the movie (and being slowly dissipated, thanks to the fans) …..it’s not a post about Iger and how he’ll never do it, etc. This is just looking at the numbers — a Saturday night exercise done mainly to share with people in the fan groups who are talking about this and wondering what the numbers are.
Now . . . . Disney did a $200M writedown and I’m only showing a loss of $138m, so there is a discrepancy and that could be for any number of reasons–they could be charging a larger distribution fee, or larger overhead percentage, or my guesstimates for Home Entertainment and Ancillary could be off. But everything is in the ballpark and at least it shows you how it works, and why they lost money — and what it would have taken at the box office to reach breakeven, which would have been good enough to generate a sequel for sure, since a sequel would not have to absorb as many one time costs; would have a built in audience the first film didn’t have; and would benefit from continued expansion of key foreign markets like China and Russia. The third column is a hypothetical breakeven for the sequel, if the budget could be reduced to $175M before tax rebates …. $150M after tax rebates. (JC got tax rebates from Utah and London……..which could presumably be accessed again.)
Click to enlarge if it’s too small for you.
The point is …. breakeven becomes a lot more attainable if the budget is reduced — global theatrical gross would only have to increase from 282M to 350M. But if the budget stays where it is, then it would have to increase to $452M, and it would be hard to convince any studio head that it would increase that much.
That’s why, in my view, the key is to find a way to reduce the budget from 250m (before tax rebates) to $175M (before tax rebate). How to do that without compromising production value?
First of all, the one-time costs have already been absorbed in JC1. What happens in Hollywood is that if it’s a one-off, then all of those costs are assigned to one film. If it becomes a series, then they make an adjustment and spread those costs over the whole series. If the series is a trilogy, then those costs would get shared 33% to each movie. That means the loss on JC1 would be lessened. Let’s say the one time costs incurred for JC1 are 60M, which I think is a fair assumption, that means that the JC loss would be reduced by 40M, and then each film in the series could only have to bear 20m each. So that produces not only a 40M savings on the production budget of JC1 — but also JC2, because it would only be carrying 20M in onetime costs, instead of $60M. So there is $40M of your savings right there. You only need to find another 35M. If there was a will to do this, it could be done.
The way that comes to mind for me is that JC had more animation shots in it than a regular Pixar all-animated movie. Does Gods need to have that many? The reason there were so many is that it was pretty much all-Thark, all the time. Would gods have relatively less Thark screen time? (Could JC2 be a little shorter in overall length, which would also save, especially when it comes to 3D animation.)
Anyway, those are my musings on a Saturday night.