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Slicing ‘King’s’ profit pie

Net profits could top $60 million

So how much profit will “The King’s Speech” actually make, and for whom? That depends, of course, on where it ends up at the box office, and on specific fees and marketing costs in each territory.

But based on a fast-approaching $350 million worldwide gross, assuming exhibitors keep an average 60% share of box office, distributors take fees of 30% and spend $50 million on global P&A, minus the $13 million cost of production and the sales agent’s cut of overages, that could leave $30 million-$40 million net profit from theatrical alone.

Gauging the pic’s ancillary value is even harder, given the diminishing but variable strength of the DVD market and the weak position of indie distribs in some territories to negotiate TV deals.

Nonetheless, adding proportionate DVD and TV revenues to a $350 million theatrical gross might eventually double the net profit figure to $60 million-$80 million.

Roughly 20% of any net profits will be split between the key talent — Geoffrey Rush, credited as an exec producer after being first aboard the project, Tom Hooper and Colin Firth — who get their bonus before the other participants.

The rest is split equally between the producers on one side and the equity investors on the other, according to the UKFC’s standard template. Without a U.K. broadcaster in the mix, the UKFC put up the lion’s share of the equity, so its net profit percentage is understood to be “low-30s” — a remarkable bounty for investing 12.5% of the budget, and a higher share than any of the individual producers or talent.

Molinare and Aegis are in line for about 5% apiece.

The producers are paying other talent participants (presumably Helena Bonham Carter and David Seidler) out of their 40% share. Iain Canning and Emile Sherman’s See-Saw will receive a larger slice than Gareth Unwin’s Bedlam, which originally developed the script.

Sherman declines to comment upon or confirm these calculations, except to point out that he and his fellow producers are still waiting to see profits.

“We’re in the same position as the investors and the talent participants. There is a feeling of expectation that there will be revenues flowing, but it hasn’t happened yet. Even our box office bonuses go back to the investors in the first instance. We’re sitting in a position of managing the recoupment process and maximizing the revenues for everybody,” Sherman says.

In any case, any net profit estimate at this early stage can only be speculative. Much depends on how aggressively local distribs spend on P&A, which buys a higher gross but eats up profits. Rentals — the distrib’s share of box office — also differ hugely by country, and according to how successful a film is. Momentum will do well to top 35% in the U.K., whereas TWC should get 50% in the U.S.

The rocky nature of the DVD market and the relatively weak position of indie distribs in negotiating TV deals could limit the upside from ancillary. A film earning $60 million at the U.K. box office might not earn significantly higher DVD and TV revenues than a film earning $30 million, particularly given BSkyB’s pay-TV monopoly.

On the other hand, with the DVD coming out around the time of the royal wedding in the U.S. and the U.K., “The King’s Speech” has the potential to write its own page in the rule book.

More on ‘King’s Speech’ payday
Who gets the ‘King’s’ ransom? | Slicing ‘King’s’ profit pie | Oscar bling brings ‘King’s’ B.O. bounty | U.K. Film Council had chunk of ‘Speech’

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