A controversial New Yorker magazine article claims Columbia Pictures’ “Last Action Hero” could rank as a bigger loss than United Artists’ “Heaven’s Gate,” but a Sony Pictures Entertainment spokesman said Tuesday that “the implication” that the movie “lost $ 100 million is absolutely ludicrous and false.”
Written by Pulitzer Prize-winning business writer James B. Stewart, the story , titled “Sony’s Bad Dream,” cites an internal profit-and-loss statement that shows the Arnold Schwarzenegger pic cost $ 82.5 million to produce and sported an “unrecouped balance” of more than $ 124 million after domestic theatrical release.
SPE and Columbia Pictures insiders said the article shows a monumental misunderstanding of movie finances, because the September profit and loss is an incomplete accounting of all of the revenue streams.”The implication in the New Yorker piece that ‘Last Action Hero’ lost $ 100 million is absolutely ludicrous and false,” an SPE spokesman said.
Indeed, the head of a major film company was wary of the “Last Action Hero” documents upon which the article is based.
“Most of the information I would want is not here,” he said. The executive pointed to exact break-downs of gross receipts, questioned whether it was possible for Columbia to rack up $ 52.8 million in distribution expenses and wondered if the film’s $ 82.5 million budget accounted for overruns caused when the studio accelerated post-production to hit its summer release date. “To just read the top sheet is not enough,” he concluded.
A top producer on the SPE lot generally lauded the piece, but said, “the one place where this article shoots itself in the foot” is when it says the film lost upward of $ 100 million, because it doesn’t account for several major revenue streams.
Stewart acknowledged that the profit and loss from September omits such primary markets as homevideo and foreign revenues, but said “it is hard to imagine Sony recovering much more than half of those losses.”
Neither SPE nor Columbia Pictures had further comment on the New Yorker report. Citing statements made by an SPE spokesman that “Last Action Hero” could eventually be a “break-even film,” Stewart questioned whether lenient disclosure regulations on the Tokyo stock exchange allow Columbia and SPE to put “a bright face” on its financial results.
“I think someone should be questioning how a publicly traded company can be saying on the record that this is a break-even movie,” Stewart said. “No U.S. company could get away with that kind of statement.”
Variety has published a different financial profile of “Last Action Hero.” According to an article published in September, when the profit-and-loss statement was issued, Variety estimated Sony’s total “Last Action Hero” financial risk at $ 150 million, and estimated a total loss between $ 20 million and $ 25 million. Those projections appear to be holding up.
Stewart’s acquisition of the profit-and-loss statement was cause celebre among Hollywood insiders, who noted that both Stewart and “Last Action Hero” screenwriters Zach Penn and Adam Leff are represented by International Creative Management. Stewart said his ICM connections had nothing to do with his insider’s access.
Referring to the profit-and-loss statement, Stewart said, “I would not have relied on a single source for that document.” He added, “I would never mix my professional representation with news gathering.”