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So a movie comes out this Thursday...


Driver
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  • 1 month later...

Was curious, so I looked up its final box office totals. Looks like it did rather well. To go ahead and compare it to a film that, apparently, merited a sequel:

 

Olympus Has Fallen London Has Fallen Difference Change

 

Domestic $98,925,640 $62,524,260 -$36,401,380 -36.8%

Foreign $62,100,000 $133,201,324 +$71,101,324 +144.5%

Worldwide $161,025,640 $195,725,584 +$34,699,944 +21.5%

 

Budget $70,000,000 $60,000,000 -$10,000,000 -14.2%

 

 

Apparently, it dropped off rather significantly in the United States, but found a much bigger audience overseas than its predecessor. Even with the studios not getting as much of the foreign cut as the domestic, a movie making back 3.25x its budget can be considered a good day.

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Millennium, the studio that made it, generally only makes movies they know they can pre-sale to foreign markets for at least half their budget. If they can do that, and it's a sequel to something that previously performed, they will pull the trigger without hesitation.

 

So yes, there is a third one in the works.

 

No, I'm not involved. :)

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  • 4 weeks later...

 

Olympus Has Fallen London Has Fallen Difference Change

 

Domestic $98,925,640 $62,524,260 -$36,401,380 -36.8%

Foreign $62,100,000 $133,201,324 +$71,101,324 +144.5%

Worldwide $161,025,640 $195,725,584 +$34,699,944 +21.5%

 

Budget $70,000,000 $60,000,000 -$10,000,000 -14.2%

 

I've always been very curious about the economics of movies in general. Let's assume these numbers are 100% accurate (because there is sometimes incentive to inflate or deflate unofficial reported numbers to make a movie to appear to be a "hit"). Someone who actually knows please correct me if I'm wrong anywhere.

 

LHF has a WW gross of 196M. It's my understanding that movie theaters take their cut off the top, and thats roughly 50%. So that leaves 98M, which is the distributor's gross. The distributors take their cut, which I believe is usually estimated at about 35%. That leaves 63.7M. Subtracting the budget of 60M leaves 3.7M.

 

Is that remaining 3.7M the producer's profit? What about marketing/promotional expenses; is that worked into the initial budget, or does the distributor absorb those? Are there any other significant expenses?

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Those percentages are not set in stone, they are negotiated. And their are constantly lawsuits and audits to determine actual money made.

 

The breakdown on profit is different for every movie. You're also missing marketing from your math which for some movies is zero, and other movies can be triple the budget.

 

Technically, a studio looks at what they make after the theater cut and compare it to the budget-- but if marketing expenses (which are sometimes worked into budget, sometimes not) work against it, that can sometimes kill any profit.

 

Keep in mind also the distributors can sometimes be multiple partners who want a bigger cut. I wish I could say there is one particular formula, but their isn't.

 

In the case of this movie, it was sold to foreign distributors before it was made based only on the fact it was a sequel to a movie that did well before and had Gerard Butler. Like I said above, Millennium generally only makes movies they know they can pre-sale to foreign markets to make up the bulk of the budget. Pre-selling those markets gives them their money with minimal investment. So Millennium was in for a handful of millions instead of tens or hundreds of it. So for them, even if the move just barely made profit, their ROI is worth it.

 

The budget pays for the production and the salaries for the actors and above the line talent (director, writer(s), producers, department heads). Profit splitting, like I said, is negotiated by every person who is above the line. In fact, I may be due some box offices bonuses. Thanks for bringing this up, I plan to call my lawyer tomorrow to look into it!

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Is that remaining 3.7M the producer's profit? What about marketing/promotional expenses; is that worked into the initial budget, or does the distributor absorb those? Are there any other significant expenses?

 

The general rule-of-thumb is that a movie has to make twice as much as it cost to make money. As Driver pointed out, it's not that simple and there are a ton of contracts to be signed and profits to be divvied up. Not to mention Hollywood's less than scrupulous accounting practices.

 

But I'm certain that it made more than $3.7 million. You know why? Because they're making another sequel.

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