Sony/20″/dt1st/jc2nd
By ELIZABETH HAYES
Staff Reporter
The much-anticipated film “Godzilla” may set a whole new standard not necessarily in special effects for gigantic dinosaurs, but in the terms that distributors demand from theaters.
Sony Pictures Releasing, in a move that has created shockwaves among exhibitors, plans to ask some theater chains for 80 percent of the movie’s box-office receipts during the first week of release after the film hits screens later this spring.
Exhibitors typically agree to pay studios 70 percent of the box-office gross during the first week of a film’s run, with the percentage paid to the studio decreasing as the run continues.
The payment can also be calculated in other ways, but in any case the amount is less than 80 percent.
According to some accounts, the new arrangement could fatten Sony’s wallet to the tune of $10 million to $20 million. Faced with a firestorm of criticism, Sony officials took to the bunker last week and were refusing comment on the proposal.
Richard Fay, head of AMC Film Marketing, said most of the industry is not prepared to pay the increased percentage at this point but then, they haven’t yet seen the film, which debuts May 20. Exhibitors will view “Godzilla” in late April.
“Seventy percent has always been a barrier over which nobody has tread just yet,” Fay said.
Written, directed and produced by the “Independence Day” team of Roland Emmerich and Dean Devlin, “Godzilla” stars Matthew Broderick as a scientist who helps track the beast responsible for causing natural disasters in the Pacific. The radioactive dinosaur later terrorizes New York City.
“They’re counting on it being a big blockbuster and on exhibitor greed, wanting to get the picture into the building,” Fay said.
Phil Smitley, assistant vice president and controller for Columbus, Ga.-based Carmike Cinemas Inc., said he believes the 80 percent request will be applied only to large metropolitan areas, where the competition is stiffer than in the suburbs.
“In our markets, which are small to mid-size, I don’t think it will have much effect,” he said. Carmike theaters are located predominantly in the Southeast.
“The studio always gets the majority of the film anyway. They’re going to get more wherever the movie runs a shorter period; they’ll get a larger percentage up front. If it runs for a longer period, the splits become more even,” Smitley said.
He said Sony’s stated intention is unusual.
“To my knowledge, it hasn’t happened the past where the distributor flat-out said, ‘This is what we’re going to demand for the film,’ and made it so notable to the press,” Smitley said.
Fay said he likes doing business with the distributors on an aggregate basis. In other words, he approves a system in which exhibitors and studios look at box-office receipts at the end of a movie’s run and then settle on a percentage for the studio.
“At the end of the day, you look at the gross and say 50 percent is a fair settlement, versus making the terms beforehand,” he said.
That way, exhibitors don’t get stuck giving away a high percentage on a movie that fails to live up to its blockbuster ambitions.
Fay said Paramount Pictures, Walt Disney Co., New Line Cinema, Warner Bros. and MGM/UA Distribution Co. settle with the exhibitors afterward, while Sony, Twentieth Century Fox, Universal Studios and DreamWorks SKG make deals up front.
Representatives from General Cinema, Loews Theatres, Century Theatres, Pacific Theatres and Cineplex Odeon Theatres all declined comment.
Robert Bucksbaum of ReelSource Inc., which analyzes, projects and tracks the film business, said “Godzilla” has been talked about ever since trailers were shown at an industry convention last year. He predicts it will appeal not just to kids, but also to baby boomers who remember seeing the old Japanese films on television. But it won’t have the ability to cross over to a sophisticated, older audience, such as a film like “Titanic.”
“It’s a big popcorn movie,” Bucksbaum said. “It’s a huge event film. (Movie-goers) will be willing to spend money.”
Exhibitors who pass up “Godzilla” could miss out on a lot of concessions dollars, he said.
ReelSource projects the $120 million film will reap up to $250 million at the box office $90 million the first weekend, dropping off considerably when competing summer blockbusters start to open in June. These include “Armageddon,” “The Truman Show” starring Jim Carrey, and the movie based on the hit television series “The X Files.”
“(Sony) has all the cards and can set their own terms,” Bucksbaum said. “They know their time is limited and they need to get as much as they can out of those two (opening) weeks.”
He doesn’t believe Sony’s move will permanently change the dynamics of box-office splits.
“You’re not going to see too much of this in the future because there’s so much competition out there,” he said. “I can imagine a lot of exhibitors are up in arms, but they have choices.”
