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As Labor Talks Near, Studios Play Down Numbers
“Evan Almighty,” starring Steve Carell, cost an estimated $200 million, but made about $100 million at United States theaters.By BROOKS BARNES
Hollywood had one of its best summers in recent history, crossing the $4 billion mark in ticket sales for the first time and stockpiling hits to release on DVD. But the movie studios are not quite popping the Champagne — at least publicly.
Indeed, to hear many studio executives talk, the movie business is closer to the edge of a cliff than ever. The 18-week summer season ending today looks great on paper, with 16 movies selling at least $100 million in tickets. But executives quickly point out that $4 billion is not a record when ticket sales are adjusted for inflation. Attendance was also lighter than in years past.
And those blockbuster movies, ranging from “Spider-Man 3” to “Rush Hour 3,” were also some of the most expensive films ever made.
“You have to first realize that before the first ticket is sold, you can have $300 million in costs to recoup,” said Dan Fellman, president of domestic distribution at Warner Brothers Pictures. “It’s hard to judge the health of an entire business based on one summer.”
Some people see a strategy in all of the black bunting: the studios are in the middle of tough labor negotiations with the Hollywood guilds.
“You don’t want to celebrate too much at a time when you’re negotiating new contracts,” said Gitesh Pandya, publisher of Box Office Guru, a Web site about the movie business.
Particularly this time around. Agitated by the increasing distribution of movies and television shows online, the unions are more intent than ever on securing pay increases. Negotiations with two of the writers unions are expected to resume on Sept. 19.
“A record summer plays right into our hands, especially from a public perception standpoint,” said one Writers Guild of America executive, who asked for anonymity because he had not been cleared to speak publicly on behalf of the union.
A spokesman for the guild did not respond to requests for comment, but John F. Bowman, the chairman of the union’s negotiating committee, echoed the sentiment in a recent interview. “The studios are reaping windfall profits but pleading poverty to the talent community,” he said.
Studio chiefs say no strategy is at play. They are pleased with the financial performance of the summer — a window in which movie companies can make up to 40 percent of their yearly revenue — but say unsettling spots of weakness cannot be ignored.
Unlike in past years, no independent movie became a sleeper hit along the lines of “Little Miss Sunshine” in 2006. Romantic comedies failed to perform (“No Reservations” took in less than $40 million in the United States), as did lucrative torture-themed horror movies (“Captivity” bombed with $2.6 million). Stars with significant wattage — like Nicole Kidman and Angelina Jolie — drew yawns.
Moreover, Wall Street’s infatuation with movie financing is starting to ease, most studio chiefs say, because of the credit crisis and some high-profile investing mistakes like “Evan Almighty.” The comedy, which cost an estimated $200 million to produce and market, took in about $100 million at United States theaters.
Then there are the glass-half-empty statistics: Despite the glut of big-budget films, the box office failed to beat the summer of 2002 after inflation is taken into account. The total for that summer was $3.79 billion, or $4.39 billion adjusted for inflation.
Movie theaters sold about 606 million tickets from the first weekend in May through yesterday, according to the tracking firm Media by Numbers, down from a peak of 653 million in 2002. “There was certainly brisk business at theaters this summer, but I think a lot of people expected attendance would rebound to a larger degree,” said Paul Dergarabedian, president of Media by Numbers.
In contrast to some recent summers, all of the major studios got a turn at the feeding trough this year, said Mr. Pandya. Among the top 10 movies were films from Paramount, Sony, 20th Century Fox, Universal, Walt Disney and Warner Brothers.
The top three movies of the summer, as judged on their global popularity, were “Spider-Man 3” (Sony); “Pirates of the Caribbean: At World’s End” (Disney); and “Harry Potter and the Order of the Phoenix” (Warner Brothers). All three movies are hovering in the $900 million range, according to Mr. Pandya, with “Shrek the Third” not far behind.
“For these big sequels, international growth was the story,” Mr. Pandya said.
Paramount led the summer in market share, largely because of the performance of movies incubated at its DreamWorks unit. The studio’s “Transformers” grew into a monster hit, selling more than $300 million in tickets in the United States alone.
Also notable was Universal’s performance. The studio was responsible for the summer’s biggest flop in “Evan Almighty,” but racked up impressive receipts for the raunchy comedy “Knocked Up” and the thriller “The Bourne Ultimatum,” which critics praised and which managed to outperform two previous installments, a rare feat for the third movie in a franchise.
Studio executives were quick to point out that the blockbuster hit “Spider-Man 3” was among the most expensive films ever made.
“We’re thrilled that business was so strong,” said Nikki Rocco, president of Universal Pictures distribution.
The summer is poised to end on a quiet note. In first place was “Halloween,” a remake of the classic horror film from the Weinstein Company and distributor MGM, with $26.5 million. The performance shows that the horror genre, while troubled, still has legs when packaged correctly, box office analysts said.
Rounding out the top five for the weekend were: “Superbad” ($12.2 million); “Balls of Fury” ($11.6 million); “The Bourne Ultimatum” ($10.2 million); and “Rush Hour 3” ($8.6 million).
