MovieChat Forums > Suicide Squad (2016) Discussion > If it makes 670 milllon ww, it could sti...

If it makes 670 milllon ww, it could still be 40 million in the red:

posted 8 years ago by gogoschka-1
195 replies | jump to latest

Edit: I'm NOT calling this film a flop, nor am I a Marvel shill who's out to bash the DCEU. This post is meant to illustrate how corporate filmmaking works. Suicide Squad not making a profit during it's theatrical run was always a calculated loss: contrary to popular belief, most megabudget productions don't turn a profit through box office performance alone, not even the ones making between 600 - 800 million dollars.

Suicide Squad’s numbers (rough estimates, but based one the numbers from films of similar size):

REVENUE (by the end of its theatrical run):
Revenue from theatrical rental
Domestic: approx. 300 million, studio gets 55% = 165 million
Foreign: approx. 370 million, studio gets 40 % = 148 million
Combined revenue (all of the above): 313 million

COSTS:
Net production budget: 175 million
Marketing/releasing costs (domestic)): 80 million (estimate based on films of similar size)
Marketing/releasing costs (abroad): 80 million (estimate based on films of similar size)
Overhead: 17.5 million
Combined costs (all of the above): 352.5 million

313 million minus 352.5 million = -39,5 million (in the red)

And that figure doesn’t even factor in participations (back end deals for Smith, Leto, Robbie, Ayer and many others).

Naturally, this product will break even in the long run through ancillary revenue, though I doubt the corporation WB belongs to will consider it a winner. The real issue in the case of this product was not the little loss it suffered (that was calculated, although the studio certainly hoped it would make more money). What really hurt was the lukewarm reception from audiences and the scathing reviews from critics, because THAT jeopardizes what products like Suicide Squad are actually made for: to generate a never-ending stream of ancillary revenue through TV rights, DVD and Bluray sales, sequels, toys, spin-offs (film and TV), TV-shows and tie-ins, video games, books and comic books, soundtracks and even theme park rides and muscials.

Now instead of just insulting me, if you doubt what I'm writing here, somebody who's much smarter than me summerizes what the actual logic behind these tentpoles is here (in case, you'd rather just insult me, though, go ahead, but at least try to be creative):

Part 1:http://iveybusinessreview.ca/blogs/lbolukhba2010/2014/02/28/the-future-of-film-i-what-happened-to-summer-2013/

Part 2: http://iveybusinessreview.ca/blogs/lbolukhba2010/2014/03/01/future-of-film-ii-la-fin-du-cinema/

Part 3: http://iveybusinessreview.ca/blogs/lbolukhba2010/2014/03/02/future-of-film-iii-the-entertainment-as-a-service-crash/

Once you've read all this, you also realise why most of these products are declining in quality with regards to their storytelling.

The slightly more entertaining version of the above you can read here:

http://www.cracked.com/blog/why-blockbuster-movie-bubble-will-burst-in-2018/

and here: http://www.cracked.com/article_19012_5-hollywood-secrets-that-explain-why-so-many-movies-suck_p2.html

"The complication had a little complication."

[–] jriddle73 8 years ago

That's pretty rough figuring but your premise is basically correct. Among other things, studios only get 55% of the domestic take on the first few days in release--that percentage begins dropping almost immediately. The foreign percentage is different from country to country and harder to estimate in a general way but it's almost always significantly less than the domestic (the rule of thumb used to be 25% but though it's still that low in certain places, that's hopelessly out of date), and it, too, starts dropping almost immediately.

Both the production and marketing budget of SS may be significantly higher than anyone suspects. You're right about $80 million as an appropriate estimate for a picture of this size; I suspect that may be higher here too, as WB marketed the hell out of SS. The budget for SS was reported as north of $250 million by the end of last year, before the mega-expensive last-minute reshoots. It was, by all accounts, a very troubled production and the more recently announced production budget of $175 million may be intentionally low-balling the actual cost. The film will definitely turn a profit but it will likely be in back-end deals.

---
"The Dig"
http://cinemarchaeologist.blogspot.com/

[–] gogoschka-1 8 years ago

I tried to be conservative with my estimate for marketing and budget, but I agree; the costs could have been (read: probably were) significantly higher. But this film was designed to set up a franchise and succeed where BvS failed in furthering the DC Universe.

So the real damage the film has suffered wasn't really it's huge drop off after the first weekend or that it could fail to make back its costs (which I doubt): the real damage for the future of the franchise was the lukewarm response from audiences and the scathing reviews from critics.

According to most sources you find online, the deals most theaters have with studios is now at a fixed 55% (it used to be how you said, though).

Same with foreign markets, which is now at around 40%

The exception is China, where studios only get 25% of the theatrical rental.

"The complication had a little complication."

[–] QCTeamkill 8 years ago

Look, you are against the DC movies. Just come out and say it. You don't need reason to fuel your agenda. You don't seem to follow any other movie's numbers like that. There are a bunch of things such as "he said" and "she said", but what it boils down to is this, tentpole movies have high budgets. They always have. They keep getting made. Why? There's a lot to figure into all this that you don't even see. Mark Hughes is privileged to see some of those numbers and hence the conclusion that having to make over 700 million is false.

Part of it is "Hollywood accounting" which is basically just fudging the books and paying oneself when it comes to making some of these movies. Whatever the case, the bottom line is this, if a studio keeps making more of these movies and throwing money at it, maybe they're on to something. Going by your train of thought, every studio, including Disney should be out of business. Just accept that you do not know everything.

I don't know anything either, other than the fact that more DC movies will keep being made, and if you're still here next year, you're already armed with Wonder Woman having a 300m budget according to Said Taghmauoi. Then, next year, you'll be scratching your head as another failed DCEU gets promoted, and yet another one is greenlit. Apparently, this exceptional studio is being funded by DC fanatics with very deep pockets.

Like I said, you don't have to trust my information, or Mark Hughes or THR. What you can trust is your own eyes when yet another movie is produced and promoted from this line. It's really just that simple.

However, if you're right, then you can just relax and rest assured that what you detest cannot last, and all the people who dared think it is a success will eventually be proven wrong. hopefully when that happens, you will have a sense of joy in your accomplishment. I hope you find peace.

[–] gogoschka-1 8 years ago

Lol: dude, I'm not against DC movies in the least; if anything, I admired WB for their willingness (at least over a short period of time) to take certain risks and make director driven tentpoles (which is something Disney rarely did). And Mark Hughes from Forbes doesn't claim to know the numbers. What he said is that he heard from one (1) unnamed source within the industry that the film's break-even point was closer to 600 million than to 700.

Also, his articles about Suicide Squad are seemingly more motivated by him trying to save face after he first hyped the film into the high heavens and then fell flat on his (according to you) so very well informed ârse. His article was titled:

Suicide Squad Will Break New Ground And Box Office Records

http://www.forbes.com/sites/markhughes/2016/07/29/suicide-squad-will-break-new-ground-and-box-office-records/#832c8b79906a

And I'm not scratching my head in the least when corporate Hollywood continues to churn out formulaic mega-budget extravaganzas: it's how big conglomerates function. The risks for the parent companies of all the studios is not that big; they spread the costs of their biggest products across investors across the globe. And there will always be undemanding mainstream audiences who will eagerly buy those products (plus 3 different versions on DVD and Bluray, plus the toys and the soundtrack - and watch the TV series and all the sequels and spin-offs).

Basically, all those films - regardless of what studio makes them and with very few exceptions - are huge ads for the gigantic corporations the studios belong to. They serve to grant them x amount of marktet share while generating awareness for all the many things those companies want to sell you. And if you never want to see some really good tentpoles again (which all the studios occasionally did make), just continue to defend the lazy products we got from most of them recently.

But if you want to see better films, vote with your wallet (as audiences have seemingly done this year). Or you'll likely never see anything as good as Nolan's Batman films again.

"The complication had a little complication."

[–] MightyViper 8 years ago

All of your posts are pretty much spot on, but this point in particular is the problem IMO:

So the real damage the film has suffered wasn't really it's huge drop off after the first weekend or that it could fail to make back its costs (which I doubt): the real damage for the future of the franchise was the lukewarm response from audiences and the scathing reviews from critics.

Even if we lowball everything and say the break even point is 600 million (which I'm quite happy to do), the long term effects of the poor reception, the brand tarnishing, and the inability to eke out more than a tiny profit theatrically are not good. Plus, SS literally only scraped by because of excellent marketing and Warner desperately trying to fix things.

All of that is a model for disaster. Certainly it's a terrible foundation for the DCEU.

Instead of just waiting for their turn to speak.
- Marla

[–] gogoschka-1 8 years ago

All of that is a model for disaster. Certainly it's a terrible foundation for the DCEU.

I agree. But that's what happens when executives from the marketing department end up making almost all the creative decisions - instead of the filmmakers.

"The complication had a little complication."

[–] cornnetto 8 years ago

Residuals and Off The Tops: 20-30 million (estimate based on films of similar size and structure)

Residuals are paid on revenue made after the theatrical release.

In the context of SAG television programs and films, the term residuals refers to the money actors receive when a production is reused. After the initial use, which is either the first run in the theatre or on television, the production company or distributor must pay the performers in order to show the motion picture or television program again. For work on a film, residuals are due if the movie appears on video or DVD (including Internet rental and/or download), basic cable, and free or pay television.

[–] cornnetto 8 years ago

Suicide Squd will probably break even in the long run through ancilllary revenue like TV rights and DVD sales, but it will likely be a long time before it becomes profitable for the studio (if ever).

Those revenue are in average bigger than theatrical revenue for a movie (in average box office is less than 40% of a movie revenue source), those are not a little plus, those are where most of the profit tend to be, almost no movie turn in the black from the box office alone.

And for smaller movie, usually it cost more to release it in theater than what they get in box office from it.

[–] Hassan_Scarborough 8 years ago

DC is certainly in the red as a whole.

Two films cost near $600 million combined, if not $700 million and SS supposedly cost $175.

So the profits from BvS are needed just to break even as a whole.

Plus what idiot wouldn't want a gross of $800 to a billion dollars?

Saying it's okay to break even is stupid.

[–] QCTeamkill 8 years ago

Many people ( including the OP ) fail to take into account several factors such as promotional partners adding something like 150m or so, like what happened to Man of Steel. All of this conjecturing is really useless though. DCEU fans and detractors can come up with all these numbers from different sources to prove if fans like or dislike the franchise.

That's a lot of fact gathering and number crunching when really the big-picture proof is when you see the studio at second place in market share, due to their super-hero franchise, with plans for multiple follow-up movies, and a consistent ~300m DOM earnings per movie. What fans want to see are more movies, and better movies.

The argument with all these numbers won't change the fact that more movies are coming because the alternative for WB are movies that make less than half. As for quality, both praise and criticism, strong ability to make money or just the opposite, either way can lead to adjustments or lack-of adjustments leading to the next movie either being better or worse: iow...all the bitching and number-crunching in the world probably has little effect in whether a sequel is going to be better or worse.

[–] Hassan_Scarborough 8 years ago

Many people ( including the OP ) fail to take into account several factors such as promotional partners adding something like 150m or so, like what happened to Man of Steel. All of this conjecturing is really useless though. DCEU fans and detractors can come up with all these numbers from different sources to prove if fans like or dislike the franchise.

People need to stop assuming that fans are nerds that sit around at coffee houses complaining. Bad movies mean that people with money stop investing in this product. That's why DCs numbers are dropping and not increasing.

That's a lot of fact gathering and number crunching when really the big-picture proof is when you see the studio at second place in market share, due to their super-hero franchise, with plans for multiple follow-up movies, and a consistent ~300m DOM earnings per movie. What fans want to see are more movies, and better movies.

I agree.

The argument with all these numbers won't change the fact that more movies are coming because the alternative for WB are movies that make less than half. As for quality, both praise and criticism, strong ability to make money or just the opposite, either way can lead to adjustments or lack-of adjustments leading to the next movie either being better or worse: iow...all the bitching and number-crunching in the world probably has little effect in whether a sequel is going to be better or worse.

On the contrary. When said "bitching" and "moaning" leads to bad press and what we call "word of mouth" it does affect the box office.

DC owns characters that are lucrative trademarks that make money, or rather can make money. The numbers mean someone still pays to see these films, but not everyone will continue to waste their time.

"Number-crunching" also helps young film makers get a better idea of what they will be in for, if they go forward in this career path.

[–] omoxus 8 years ago

I heard it has to make $900 million to break even!!

I am the Alpha and the Omoxus. The Omoxus and the Omega

[–] mider2009 8 years ago

No just no

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