starwars

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NOLA L. SARKISIAN

Staff Reporter

Call it the force to be reckoned with.

The movie that is expected to be the second-biggest moneymaker of all time (second only to “Titanic”) is scheduled to hit theaters in a couple of months, and theater owners are feverishly working out the financial terms under which they will show “Star Wars: Episode 1 The Phantom Menace.”

Issues being negotiated between theater owners and 20th Century Fox and Lucasfilm Ltd. (the movie’s distributor and producer) include which theaters will receive the movie, how many screens will show it, how many prints will be distributed and most importantly, what the revenue split will be.

Executives both at Fox and Lucasfilm declined to comment on financial terms, which they say will be determined in late April or early May, once the film is screened for exhibitors.

A few details did surface at the recent ShoWest conference in Las Vegas, where “Star Wars” creator George Lucas said he is looking to play the movie at state-of-the-art theaters that are outfitted with digital sound systems. About 2,000 of the nation’s 7,418 theaters fit that description, according to Beverly Hills-based Reel Source, a box-office tracking firm.

“When we released our special edition (of the original ‘Star Wars’) two years ago, we looked for theaters with a big presentation and digital sound. That’s the way to hear and see the movie. Now, we have a template out. With the new movie, we’ll try to follow that template,” said Tom Sherak, chairman of Fox’s domestic film group.

Typically, distribution deals between studios and theater owners stipulate a percentage of box-office revenues that will be divided between the two entities. Studios typically get 70 percent to 80 percent of the box-office gross and theater owners keep the rest.

Highly anticipated movies command bigger stakes for studios. Sony Pictures Entertainment pushed for a 90/10 split on its “Godzilla” release last year, but ended up settling for 80/20. The film brought in only $132.6 million, a far cry from the $250 million that some had projected. Films that have reached the coveted 90/10 level include “Men in Black” and “Independence Day.”

Those splits are only maintained for the opening weeks. Later, the split is adjusted to give theater owners greater incentive to continue playing the feature.

“I’m sure the terms will be 90/10,” said Robert Bucksbaum, president of Reel Source. “Could the stakes go further to 95/5? I can’t see it for this film. That’s asking a lot. Maybe for the next one in the summer of 2001.”

Under its deal with Lucas, Fox will distribute two more “Star Wars” movies after “The Phantom Menace.”

Besides digital sound, preference also may be given to theaters that exhibited the most-recent Fox releases.

“What I’ve heard is that it will be a normal allocation policy. If you had the last Fox picture, then you’ll get ‘Star Wars,’ ” said one theater owner. “From an exhibitor point of view, that’s good because you’re not out there bidding the house.”

Other factors that Lucas and Fox are considering include the area of the country in which the theater is located, the demographics of its customers, and the competition it faces from other theaters.

The new Star Wars movie is not expected to shatter any records in terms of venues or number of prints. Wide releases typically allocate about 2,500 prints, and “Godzilla” set the record last year with a release in 3,310 theaters.

“You’re not going to see those numbers with this movie. It’s not about quantity, but about selection. Mr. Lucas wants to make the presentation special,” Sherak said.

“The Phantom Menace” is slated to open on a Wednesday, and Reel Source projects that it will shatter both the opening-day and five-day box-office records. In its first five days, the movie could bring in $140 million, Reel Source estimates. Its total gross is projected to hit $475 million, which would make it the No. 2 domestic box-office hit of all time behind “Titanic,” which grossed $600 million.

“It’s a film that everybody expects will decimate anything in its path for two weeks,” Bucksbaum said.

Nevertheless, several theater owners said they’re not planning to play the movie in more than two or three screens per multiplex. That’s because other anticipated releases are set to premiere at roughly the same time. Those include DreamWorks SKG’s “The Love Letter,” Walt Disney Co.’s “Tarzan,” New Line Cinema’s “Austin Powers 2: The Spy Who Shagged Me,” and Warner Bros.’ “Eyes Wide Shut.”

“We want to keep as many viable titles out there to accommodate our audience choices. As popular as (‘The Phantom Menace’) will be, lots of people will want to see other movies,” said Phil Zacheretti, senior vice president of marketing for Regal Cinemas in Knoxville, Tenn., which has 3,702 screens.

Moviegoers in some areas might even face higher ticket prices, though Richard Fay, president of film marketing at Kansas City, Mo.-based American Cinema Theatres, bristles at the notion.

“We are not a film exhibitor that reacts to the release of a film in taking prices up, down or sideways. It’s not fair to the public,” he said. “If you do that on highly anticipated films, then what do you charge for a mediocre film?”

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