Sony squeezes exhibs on megapic
Confident that few theater owners will have the guts to walk away from one of the most highly anticipated films of the summer, Sony Pictures Releasing will ask some exhibitors to fork over an unprecedented 80% of box office receipts for the opening week of “Godzilla.”
On opening week, theaters typically pay either 70% of the gross or 90% of the gross minus a “house allowance” for overhead costs, whichever is greater. Either way, the studio’s take rarely reaches 80%.
Exhibitors, not surprisingly, are up in arms over the terms for the sci-fi actioner, which stomps into theaters on May 20.
“Anyone who does it should have his head examined,” said one major chain buyer who asked to remain anonymous.
Many other theater execs are also adamant they will never accede to Sony’s demands. But turning down filmmakers Roland Emmerich and Dean Devlin’s follow-up to “Independence Day” won’t be easy: After all, 20% of a huge blockbuster — not to mention the attendant popcorn and soda sales — still beats 30% of a run-of-the-mill pic.
On the other hand, exhibitors fear, with good reason, that if they accept the higher terms from Sony, other studios will push for the same deal on their big pics.
“We’re making every effort to price our pictures at market value,” said Jeff Blake, Sony Pictures Releasing prexy. “If we’re going to pay what we’re paying to make and market a film like this, the price needs to reflect that.”
Sources put “Godzilla’s” production budget at around $120 million. While high, the budget is considerably less than the $200 million-plus budget of 20th Century Fox and Paramount’s “Titanic,” for which exhibitors paid traditional rates.
Sony will seek the 80% first-week rental — which has no 90/10 option — only in competitive markets. In those cases, the studio’s share of the pie drops to 75% in the second week and 70% in the third and fourth weeks.
In non-competitive situations, the studio will consider more conventional deals, according to Blake. But the terms will still be tough: The 70% “floor” will continue for the first four weeks of the run.
Given the current megaplex environment, where potential blockbusters often occupy five or more auditoriums and films come off screen faster than ever, most exhibitors believe even 70% is too much on opening week.
Based on clips they saw at ShoWest earlier this month, some exhibitors have said they are not convinced that “Godzilla” is the next “Independence Day.”
“It looked campy,” said one theater exec. “We didn’t see the emotional hooks that ‘ID4’ had.”
Still, no one doubts “Godzilla” will open to monster numbers. “If it doesn’t work, it’ll do $250 million,” quipped one distribution exec at a rival studio.
Twentieth Century Fox recently backed off its plan to open “Bulworth” directly against “Godzilla,” moving the Warren Beatty-helmed political satire up a week to May 15.
“Can we sell it this tough?” wondered Blake, known as one of the most aggressive deal-makers in the business. “I hope so. The supply and demand curve is up pretty high on the demand side.”
One thing is certain: No decisions will be made until late April, when exhibitors get to see “Godzilla” in its entirety.