COMPASS & LOTR comparison

[Sauron the White]

New Line sold off foreign rights to help finance the pic, which carries a reported $180 million pricetag.

Am a bit confused at the arcane nature of film financing, distribution and revenues. If New Line did indeed sell off foreign rights a while ago and used that money to help pay the production bills, could someone please explain how a pretty good overseas box office helps them in the light of very poor US revenues which they still own?

Perhaps it would make them optimistic about a future film - at least overseas - but then that would be tempered with the woeful news about the US box office prospects as well.

[Mister Underhill]

Originally Posted by Sauron the White

Am a bit confused at the arcane nature of film financing, distribution and revenues. If New Line did indeed sell off foreign rights a while ago and used that money to help pay the production bills, could someone please explain how a pretty good overseas box office helps them in the light of very poor US revenues which they still own?

Yeah, I mentioned this upthread, too. Since they sold the foreign distribution, their take of the foreign windfall will be limited.

Film financing, distribution, and revenues are never cut-and-dried. It's not like they sold the foreign distribution for a flat fee and are not seeing any foreign money, for instance. But their profits will be capped and they almost certainly got the losing end of that gamble.

And you can't look at raw numbers, as some have, and simply declare profit. "The film cost $180M and they've taken in almost $300M" just doesn't take into consideration all the complexities. Besides the sale of foreign distribution, there are marketing costs that run into the tens of millions, the box office is shared with theater chains (as mentioned above), and then there are "hidden" costs like gross profit participation -- I expect Nicole Kidman, at least, has gross points.

I still expect that New Line's profits, if any, will be fairly modest. Will that money, plus the attractive foreign prospects for a sequel, be enough to make them take that kind of risk again? Time will tell. New Line's resources are not unlimited, and they're about to sink $300-$400M into Hobbit movies.

If it were, say, Disney, I'd guess they'd probably risk a sequel, because they have the means to exploit the license six ways from Sunday -- theme park rides, animated tie-in series, etc. New Line, historically, hasn't been in the "tentpole" picture business outside of LotR. They usually have a slate that's heavy with low-risk $30-40M pictures like the Rush Hour franchise, Wedding Crashers, horror movies and the like.

I'd say the safe money is still on no sequel, but time will tell.

[Lalaith]

underlines the widespread appeal of fantasy fare outside the U.S.

...implying that the US has gone off fantasy as a whole?
Now that's got to be bad news for the Hobbit....alternatively, NL could be a bit cannier about foreign rights....

[davem]

Anyone know if they sold the Worldwide DVD rights? In theory they could make 4 or 5 (or more) times the theatrical profits via DVD sales. One assumes they haven't sold the foreign distribution rights to any sequels either.

Have to say that given the popularity of TGC worldwide, & the profit its made so far, that if NL can't find some way to produce, & make money on, sequels they must be run by people with the same IQ as those who watch their movies

[Sauron the White]

from davem

Have to say that given the popularity of TGC worldwide, & the profit its made so far, that if NL can't find some way to produce, & make money on, sequels they must be run by people with the same IQ as those who watch their movies

They let you in did they not?

[davem]

Originally Posted by Sauron the White

from davem



They let you in did they not?

I was misinformed.

[Sauron the White]

Ah yes, thought you were going to the opera that night or perhaps a Merchant-Ivory film?

[davem]

Originally Posted by Sauron the White

Ah yes, thought you were going to the opera that night or perhaps a Merchant-Ivory film?

I thought I was going to see something of the same intellectual & philosophical depth as the books.

(btw, I was referencing Casablanca with the 'misinformed' comment - Bogie will always be the definitive Frodo in my eyes http://uk.youtube.com/watch?v=Pg1ggAywqkU)