Austin Powers Movie Profitable??

General Questions
#1

Just wondering how much box office income
is needed to for this movie to break even??

1.I read that each print costs $10,000- 12,000 & there were 3,300+ screens
showing it. $10,000 x 3300 = $33 million

2.At least $20-$30 million for advertising.

  1. Cost of filming $30 million

  2. On average, theater owners keep 1/2
    box office receipts.

Income to break even =
2 x (film cost + advertsing cost + prints cost)
$189 million???!!!

I realize that product placement, overseas
revenue, video sales, network/cable TV sales
and movie related T-shirts, etc. bring extra
dollars. However, it seems such a big gamble.
Are the adverting/prints/film costs exaggerated?? Does anyone know how things really add up.

#2

well, it’s complicated…I assume you’re asking how long it will take for the studio to make back it’s money.

You’re right about the cost of the prints, but the theaters pay for that so they make that up right away.

the take of the box office varies based on how new the film is. For instance a film company may insist on a 80% cut of the box office opening weekend and the percentage drops with each week. That’s one of the reasons that some theaters will hold onto a film forever, because after they have it for 10 or so weeks they’re making more of a profit, and why some theaters only show stuff after it’s been out a while, so it doesn’t cost them as much. AND it’s why your 12 ounce soda costs $6, because that’s where the theater actually makes it’s money.

In this weekend’s paper I read AP made like $58 million, so at that rate it should make it’s money back in about a month or less. Any video or merchandising profit is icing on the cake for a project like this.

#3

I thought that the cost of prints was the
distributer’s and then eventually the
film companie’s expense.
If the theater most pay for the print cost
what incentive does a theater have to play
a little known title or an independent film?

#4

that is complicated too, for instance if you want to run the new summer blockbuster by Disney, they can say “Ok, well let you have it instead of the compitition, but you also have to play the garbage Pauly Shore movie we have coming out in the fall, as well as the next release from our arty-farty sister company.” There’s a lot of evil politics involved in the film industry, like having local theaters bid against each other for who is willing to give up the most opening weekend boxoffice in order to have an exclusive run of the film.

Actually, you may be right about who pays for the prints…but I know if a theater damages a reel or has to order a replacement for some reason it costs the theater like $2,000. So maybe that’s where I’m getting confused

#5

Without even looking up actual figures, I’ll have to go with YES, you bet it’ll make a hell of a profit. The first weekend it was open it made more than Star Wars Episode One, and there are still tons of people who are planning on seeing it. Then you’ll take into consideration the money made a few months from now in theatres that do second-runs, a few months from then: video, and then next year PPV, and a few months after that premium cable channels paying for the right to show it. This is not to say that it’ll end up making more than SW, but it’s certain that nobody will be losing money.

Chris
(who would defend AP even if it sucked purely out of adoration for Mike Myers)

#6

Voguevixen, I was under the impression that blockbooking ended with the studio system. My journalism text didn’t say so outright, but it did seem to be strongly implied. Did I make a wrong assumption?

Also, don’t the theaters have to pay something to be allowed to show the movies? How does that figure in?

I hope somebody can come in here with some clear answers because I’m beginning to wonder why they bother to make movies that aren’t clearly destined to be hits.

“It is more from carelessness about the truth than from intentional lying that there is so much falsehood in the world.”
-Samuel Johnson

#7

Of course it isn’t profitable! The original BATMAN wasn’t profitable, so why should AUSTIN POWERS?

Welcome to the world of film accounting! If you look at their balance sheets, films NEVER make a profit. Movie studios are charitible enterprises.

My favorite item on the movie balance sheet is “interest costs.” This is how much the budget for the film would have earned in interest if it had been left in a bank (at an extremely generous interest rate, of course). That amount is routinely deducted as an expense.

Oh, the producers will certainly get rich from it, but as for making a profit . . .

www.sff.net/people/rothman

#8

Interest cost? That can’t be deductible, can it? You would have had to pay tax on the interest if you had made it. It must be used in some other context, like how much you have to may the actors in residuals.

That’s the way that it is on this bitch of an earth."
– Pozzo, Waiting For Godot

#9

I have to wait till its out on video to see it with captions. The video market is also a lot of money. The store pays $88 for some of them.

#10

As RealityChuck pointed out, the cost of making a film is calculated using some unusual accounting practices. One big factor is that the thirty million dollar “cost” of making a film includes a lot of money that is just moved around within various seperate sections of the production company. For example, the studio will charge the film production unit for the use of editing facilities, even though both are owned by the studio.

Here’s an example of how this type of accounting would work in real life. Let’s say I owe my ex-wife half of all the money I make after I pay my basic living expenses. She has figured up my expenses and says I have $500 left every month and owe her $250. I tell her she didn’t figure in that I have to pay $100 a month to use the refridgerator in my kitchen, $50 a month to use the washing machine in my basement, and $350 a month to use the car I drive to work. So I add this $500 to my other expenses and tell her I’m just breaking even and have no money left to pay her half of. What I don’t tell her is that I own the fridge, washer, and car, and I am paying all these fees to myself. So even though I am spending all my money on paper, I still manage to have $500 in my pocket at the end of the month.

Film studios use the same kind of accounting. They promise people a percentage of the profits. But after they add up the “expenses” they are able to say there are no profits to be paid out.

#11

missouri65 – the situation here in San Francisco is that there are so many chains and theaters (and more being built as we speak) that everyone is desperate for films and the studios can do pretty much as they please. One chain used to have a monopoly on all Disney product so they were guaranteed a couple big moneymakers a year, but were also stuck with all the junk put out by Hollywood and Touchstone. The studios can not only tell you what to play, they can tell you how to play it. (# of shows per day, how long between shows, etc) Say for instance you want to premiere the big new Star Wars movie…you’d better be perpared for your neighbor over the hill George Lucas to come in and tell you you need an entirely new soundsystem; you’d better be ready with your checkbook, too.

As for what it costs a theater to show a movie; it’s not so much that the theater buys the print outright, as I previously stated, but that they lease the print and pay for any damage resulting in a replacement reel or print. (I’m at the management end of the food chain rather than distribution/booking so I’m not sure of the details.) The cost of this “rental” decreases as the film ages. In addition to this the theater agrees to give up a certain percentage of it’s box office take. This is also proportional to the shelf life of a film.

As far as why films are made that aren’t sure fire hits…for every supposed money-in-the-bank blockbuster like Last Action Hero or Hudson Hawk, there are a dozen “who knew?” flukes like Pulp Fiction, El Mariachi, or The Full Monty. The studios hope they’ll be the first with some new, cheap thing that will be the surprise hit of the year. Example: does this sound like a sure fire hit to you? Plot-rich, good-looking professional falls in love with spunky, uneducated prostitute. Lead actors - Has-been Richard Gere and little known independant film actress Julia Roberts. Not only did this film make more money than you would dream possible, it resurrected the career of one and made an overnight sensation of the other.

#12

I cannot believe I just randomly stumbled on this article from the LA Times…it breaks down exactly how much Austin Powers cost to make and how much it is expected to earn.

http://www.latimes.com/HOME/BUSINESS/t000054766.html

#13

Film accounting is separate from what they tell the IRS. I don’t think they deduct interest costs there – they’d never get away with it. But it is standard in financial accounting for movies. That’s why only the naive are happy when they are granted a percentage of the net profits on a film. At Art Buchwald discovered, there are rarely any net profits.