Rupe sees $100 mil 'Titanic' profit
NEW YORK — News Corp. estimates it will earn a profit of at least $100 million on “Titanic” once all revenue from the pic is accounted for, chairman Rupert Murdoch told Wall Street analysts Wednesday night.In unusually candid comments at an analyst briefing on the company’s quarterly earnings, Murdoch said “it’s very risky to forecast,” but the pic’s worldwide B.O. gross seems headed toward $950 million to $1 billion. “Titanic” so far has grossed about $600 million worldwide. The exec said that News Corp.’s 20th Century Fox and its partner in the film, Viacom Inc.’s Paramount Pictures, would receive about 48-49% of the box office gross from exhibitors — highlighting that exhibs are doing particularly well on the long-running pic. Typically, the distribs’ share of box office grosses declines from a high of about 80% in the opening weeks to 50% and below the longer a pic runs. According to analysts who were on the call, Murdoch estimated that gross revenues back to the studios would be $750 million, including film rentals, video, broadcast and pay-cable revenues. On that basis, “we are comfortable” assuming a profit of at least $100 million, most of which would be earned in the next 12 months. News Corp. declined comment Thursday. Murdoch’s estimate of the profit could have a big impact on News Corp.’s bottom line, as it is very close to the entire profit made by 20th Century Fox in each of the past two fiscal years: $104 million in fiscal 1997 and $109 million in fiscal 1996. It is unclear how much money Paramount, which is distributing the picture domestically, will earn. Par put up just $65 million of the pic’s negative cost, estimated to be $260 million to $280 million, while Fox put up the rest. But Murdoch noted that Fox gets 60% of the revenues after recoupment of all costs, while Par gets 40%. Viacom declined comment. Murdoch’s comments helped give News Corp.’s stock price a boost Thursday, when it closed up $1.12 to $25.37. News Corp.’s exposure to “Titanic” has gone from being a “big concern to one more plus” in the story the company can now present to investors, Lehman Bros. analyst Larry Petrella said. “It turned out to be a decent return,” said Cowen & Co. analyst Harold Vogel, although he noted that given the risks involved, the return wasn’t that great.