Phase II - The 'Buck' Stops at Warner Brothers!

[Andrew_Swallow]

I suspect that the suits are reacting to the British tax laws.

General Tax Rules for the Movie Industry

http://www.inlandrevenue.gov.uk/specialist/fi_guidance_notes2003.pdf

Some new tax rules (increases) are being introduced this year.

http://www.inlandrevenue.gov.uk/pbr2004/sup_ta_film.pdf

UK GovernmentÆs definition of a British Film

http://www.culture.gov.uk/creative_industries/film/CriteriaforBritishfilms.htm

and

http://www.culture.gov.uk/NR/rdonlyres/es6o2m7o3xvjfgcxbx3pz3xmebazcnybbytflbq3xscaxcxfdqd5erv4leuog6vips462lckf7yevxtwqzyhlf45thf/qualifyingbritishfims.pdf

Extract

(b) 75% of the total labour cost - after deducting the cost of two persons whose nationality must be non-Commonwealth/EU/EEA/Association Agreement country, and one of whom must be an actor (and engaged in making the film in no other capacity) - must have been paid to citizens or ordinary residents of the Commonwealth, EU/EEA or a country with which the European Community has signed an Association Agreement*;

(Translation you are allowed 2 Americans)

Benefits of getting the film classified as British

http://www.culture.gov.uk/NR/rdonlyres/e673kot4m5n6symop3bvs3sp7sasa5pukdf5wmkwkcnan7johfmpl3lxnjnaw3smrwpwm6h2nesv4otqv6uou5eglze/BENEFITS.pdf

(I think it means that on a big film the studio can deduct tax over fewer years.)

[colonyearth]

I agree...but IMO, B5 is a win-win film. If only they don't screw with what makes it win-win...which, unfortunately, they are.

As for bad suit/good suit. Yes, there are good people out there, but they are few in number. Most suits don't have a creative bone in their body but like to think they do...and like to mess with what the creative folk do thinking they're saving their "bottom line"...which they invariably end up destroying by their meddling ways.

CE

[Telemachos]

True... though of course it's worth pointing out that there are both bad "suits" and good "suits". Ironically, the few I've been exposed to have invariably been film lovers and knowledgeable both about classic films and with what they were trying to develop. I've certainly heard more than a few "idiot" stories, though.

My point about the budget was simply that even if we only look at the cost of production, an exec focused on the total money needing to be spent will be looking at everything: production, P&A, etc. While I agree that a pragmatically budgeted B5 feature (with original cast in place, natch) would almost certainly turn a healthy profit for WB (particularly when overseas grosses, home video, and merchandising were taken into account), the fact remains you need someone who's willing to shell out somewhere around $60-80 million all told.

Unfortunately (again), there are very few who are willing to roll the dice on something not seen as a presold, prepacked commodity.

[colonyearth]

Originally posted by Telemachos
Not to question the numbers from BOM too much, but it's awfully hard to get specifics on production costs... and frankly, with prints & advertising running another $25-50 million, the studio would be looking at that cost as well. WB would presumably be looking at a minimum of mid-50s budget for B5:TMOS; and frankly I would guess that even that would be somewhat low (this is production and marketing costs combined).

CE's point aside, there's a lot of internal power issues in studios that won't make logical sense... I haven't seen anything specific in the trades, but conceivably if a new executive came in, SOP is often canning or putting your fingerprints all over your predecessor's projects (because if they're successful you don't get the credit, and if they fail you get the blame). Fear is, sadly, a driving force.

I would agree with a large portion of what you've said. Only, I wouldn't include marketing in that price. I'm guessing that TMoS will have a production budget of around 40 million, plus marketing. I still don't think that it will have any problem making profit...none at all...if only the morons will leave the B5 universe in tact.

The exec. problem is exactly why I made my last statement. What most "suits" don't realize, however, is that it has nothing to do with them...but everything to do with the creative people working on any given project as to whether it's good or even well-received. Their little (sorry, huge) egos refuse to let them see the reality that they are only money people and business folk and should remain as far away from any creative decisions as possible. For when suits become embroiled in the creative...disaster always ensues.

CE

[Telemachos]

Not to question the numbers from BOM too much, but it's awfully hard to get specifics on production costs... and frankly, with prints & advertising running another $25-50 million, the studio would be looking at that cost as well. WB would presumably be looking at a minimum of mid-50s budget for B5:TMOS; and frankly I would guess that even that would be somewhat low (this is production and marketing costs combined).

CE's point aside, there's a lot of internal power issues in studios that won't make logical sense... I haven't seen anything specific in the trades, but conceivably if a new executive came in, SOP is often canning or putting your fingerprints all over your predecessor's projects (because if they're successful you don't get the credit, and if they fail you get the blame). Fear is, sadly, a driving force.

[colonyearth]

Originally posted by waspfan
www.boxofficemojo.com

some info on how much they made with theatrical releases...

Sometimes they post the top DVD sales as well...

I read somewhere recently that most movies are making 60% or more of their revenue on the DVD release.

Movies such as Riddick and Office Space have sold so many DVD's that even though they didn't make money at the theater they are being considered for sequels.

So movie studios now consider the dvd release to be a MAJOR factor in making a movie. Electra was just released with a rumored small $35-40 million budget. First weekend $15 million domestically -- it will end up eclipsing the $40 million with international. DVD is all profit. I did not see it but it did not get very good reviews on Rotten Tomatoes..... (www.rottentomatoes.com)

Serenity (Firefly movie) will be coming out this year and Universal just hopes to come close to the $40 million it cost to be made. They figure they can make $100 million on the DVD release, video games, etc... If it is a bigger hit than that then it is a bonus, but guaranteed profit nonetheless.

Is is this very fact of current reality in the business that causes me to seriously question the mental capacity of those at WB and TPTB on TMoS. All they have to do is keep the cast and make the great film we know JMS will try to make and there is literally no way they can loose a dime. Ultimately, even if it only does modestly well, they would still look to a sequel.

This is a win/win situation with TMoS...the only way to loose at all is to f*@k with the universe or the cast and piss off the fanbase as they are attempting to do.

The mind of a suit is a terrible thing and must be stopped in our lifetime.

CE

[NivenPournelle]

Originally posted by mslulu
Star Trek IV: The Voyage Home (1986) - 147 mil gross (109.71 mil US / 37.287 International)

The fact that after four Next Gen movies that The Voyage Home is still the biggest box-office success says a huge amount about where the franchise went wrong. A cracking film!

Sorry to digress. Where were we?

[Joseph DeMartino]

I read somewhere recently that most movies are making 60% or more of their revenue on the DVD release.

Exactly. That is seriously impacting studio decisions. "Bombs" from one year finding new life on home video is nothing new, but with DVD the quality is so high and the price so low that far more people are buying copies of movies to keep in preference to renting them, and that has really changed the economics of the business.

Heck, Family Guy is the first cancelled TV series to be put back in production based strictly on DVD sales. I suspect it won't be the last.

Regards,

Joe

[waspfan]

https://www.boxofficemojo.com

some info on how much they made with theatrical releases...

Sometimes they post the top DVD sales as well...

I read somewhere recently that most movies are making 60% or more of their revenue on the DVD release.

Movies such as Riddick and Office Space have sold so many DVD's that even though they didn't make money at the theater they are being considered for sequels.

So movie studios now consider the dvd release to be a MAJOR factor in making a movie. Electra was just released with a rumored small $35-40 million budget. First weekend $15 million domestically -- it will end up eclipsing the $40 million with international. DVD is all profit. I did not see it but it did not get very good reviews on Rotten Tomatoes..... (www.rottentomatoes.com)

Serenity (Firefly movie) will be coming out this year and Universal just hopes to come close to the $40 million it cost to be made. They figure they can make $100 million on the DVD release, video games, etc... If it is a bigger hit than that then it is a bonus, but guaranteed profit nonetheless.

[Joseph DeMartino]

One of the Big expenses of the later Trek films was Cast Salaries.

Well, "big" is a relative concept. Paramount may have paid Shatner and Nimoy more than they would have preferred, but neither of them was getting Bruce Willis or Tom Cruise money. Both men would have known that there were limits to how much Paramount would pay, because if a Trek film got too expensive they just wouldn't make it. And as long as the series was turning a profit (which it started doing dramatically with Khan) the studio was willing to pay to keep it going.

Everybody lined up for a raise when the second X-Men and Spiderman movies rolled around, too. That happens with all sequels to successful films. As long as the studio can still turn a profit, they'll pay out - up to a point. That's yet another reason to make sure that the original actors get their old parts back in this movie, even if they are smaller roles or even cameos. Once they're "established" in the first movie they're almost assured of continuing the roles in any subsequent films. And at a higher price if their parts are more prominent.

Later,

Joe

[bakana]

One of the Big expenses of the later Trek films was Cast Salaries.
Shatner & Nimoy in particular.
Shatner "Knew" they couldn't make the movies without him, so he bargained Hard.
Nimoy, according to one report, signed rather Quickly, leaving Shatner thinking Nimoy had been a Pushover.
Then, after the contracts were Signed, Shatner learned that Nimoy had simply bargained to have His salary indexed to Shatner's.
Whatever Shatner got, Nimoy would get 10% More.
Because he Knew the depths of Egomania the studio would be bargaining with...

[Jan]

Originally posted by z^3
Jan, I think you mentioned in a couple of posts that early Jan (10th?) was around the time we might hear things. Have you any idea on the current timetable?

Not quite. I'd heard that some kind of deadline was supposed to happen around the time that the studio folks were going to be coming back to work which was the 10th or so. What kind of deadline and whether it could/would be extended, I don't have any information on.

My sources aren't such that I can ask a lot of questions, I'm afraid. We just have to wait and hope.

Jan

[z^3]

To all those with connections: are you hearing anything about TMoS at the moment? I was wondering if negotiations are ongoing in terms of recasting, or if some resolution has come about.

Jan, I think you mentioned in a couple of posts that early Jan (10th?) was around the time we might hear things. Have you any idea on the current timetable?

(Sorry for pestering, just sitting here in the dark is beginning to make me edgy )

[mslulu]

Aye, Joe, I looked for production costs on films (and overall profit) but wasn't having much luck. I would *think* that the films were relatively inexpensive to create compared to films such as Star Wars or your average A-star blockbuster (there goes 20 mil down the drain just for hiring an A-list actor/actress.)

Would love to see what the overall profit for the films were (including dvd sales, etc.) Just really have no idea where to look for such a thing.

I think the movie industry is ready for some sci-fi, some *good* sci-fi.

[Joseph DeMartino]

Mind you it's too bad we as fans don't have enough money so we could make an offer to buy the rights to B5.

JMS has said that WB's worldwide profit on the DVDs through 3 1/2 seasons (since S4 had only been released in the U.S. at that point) was in the area of five hundred million U.S. dollars. Then there's the licensing rights to the broadcast themselves, sold and resold around the world over the past 10 years. Just the advertising leading up to the film's release is apt to increase DVD sales, which will go even higher if the film is a moderate hit or better. Good box office for the movie should also restore interest in airing the reruns, which means WB will get a better price for the rights, will increase the franchise's value as to third party merchandisers and may even lead to a new TV spin off, which in turn will help sales of all the earlier iterations of the series and the DVD sales of the movie.

Now, how much do you think WB would have to be offered before they sold off a cash-cow like this which could potentially be returning millions of dolllars to the studio year in and year out?

The figures you provided on the Trek films is interesting, but incomplete. The key is the original production cost. The rule of thumb is a film must gross three times its base production cost to break even. (This accounts for prints, advertising and the theater's share of the ticket price.) So without cost figures, it is hard to tell how each of the films did. Because its production costs got way out of hand (especially the FX budget) TMP was a disappointment for Paramount, but it didn't actually lose money. By resuing gobs of FX shots and setting most of the action aboard the Enterprise or the bridge of another starship with an almost identical layout (in fact a re-dress of the Enterprise bridge set), Wrath of Khan was able to keep costs way down and proved much more profitable than the bloated Motion Picture.

Finally all of the films were then sold into the airline market, pay per view, premium cable, broadcast network, basic cable, and broadcast syndication in the U.S. And resold into the equivalent markets in pretty much every other country where the film was exhibited in theaters. And then they were all released on VHS, DVD, re-released on DVD in special editions and - in the case of First Contact - an "ultimate DVD edition"(which is coming soon.)

So, yeah. I'd say even apart from the box office numbers, all the Trek films made money. (And then there's the merchandising. How many folks think that the Starfleet uniforms changed from series to series and from movie to movie for aesthetic reaons? Suckers! Those uniform changes were designed to lift sagging sales of Trek "action figures". That's one reason the costumes for those things aren't removable but are molded into the plastic.)

Regards,

Joe