Thomas Tull’s rough year at the box office is about to get a whole lot better, thanks to the sort of company the film financier is keeping.
The Legendary Entertainment CEO’s co-production and co-financing arrangement with Universal Pictures will get him a 25% cut of “Jurassic World,” the dinosaur thriller that is on its way to be a global blockbuster and is expected to ring up $125 million domestically this weekend.
Already, the movie has made an initial splash overseas, opening to $24.5 million in China, France and six smaller markets including France, Belgium, Egypt and Indonesia and including $3.5 million from late night previews in a dozen other territories.
While studios sometimes wall off their biggest franchises from partnerships — keeping the lion’s share of the risk and reward inhouse — Universal is sharing the cost and spoils of the fourth installment in the “Jurassic” franchise, sources confirmed. The first three pictures in the series collectively hauled in more than $2 billion worldwide and Legendary’s take from the latest sequel is likely to be substantial.
Some might wonder why Universal would want to share any portion of the riches from one of its most treasured IPs. Universal officials declined to comment. That said, Universal recently allowed MRC to share in 10% of the cost and proceeds from its sure-fire hit “Furious 7,” which has raked in more than $1.5 billion globally, in exchange for distribution rights to the upcoming sequel “Ted 2.”
Such arrangements have not been welcomed for some of Hollywood’s coveted franchises. Warner Bros., for example, refused to take financial partners or share the bounty on its blockbuster “Harry Potter” films, which amassed more than $7 billion worldwide.
“With ‘Harry Potter’ at Warner Bros. and some other big films they wouldn’t give up any participation to the hedge funds,” said longtime Wall Street analyst Hal Vogel. “In this case, with Tull and ‘Jurassic,’ they are sharing a portion, but Universal still has the dominant position in the movie. One of the things the studios do is risk mitigation and risk transfer. I’m sure that at least partly explains what’s going on here.”
Paul Dergarabedian, a senior box office analyst at Rentrak, said that 25% is a big share of the “Jurassic” film for Universal to part with, but he added that such arrangements can’t be viewed in isolation: “It’s all part of building a strategic partnership, building long-term relationships.”
The last offering in the prehistoric thriller series, “Jurassic Park III” in 2001, was less than a runaway hit. It made $369 million worldwide, but that take was offset by a $93 million production budget, along with substantial marketing and distribution costs — all coming after its revenue split with exhibitors. “Jurassic World,” being beamed on to more than 4,200 screens starting Friday, is Universal’s widest release ever. It cost at least $150 million to make, but could reach more than $1 billion in ticket sales, if the first version of the series is duplicated.
Tull’s Legendary operation could use such a victory, or at least his one-quarter cut. The company took an $85 million writedown in 2013, in anticipation of losses from the fantasy adventure “Seventh Son.” When the film finally debuted in February of this year it collected just $110 million worldwide on a production budget of $95 million. Things got even worse with the release of the Michael Mann’s $70 million cyber-thriller “Black Hat,” which bagged a paltry $18 million.
The losses were more than financially painful to Tull and Legendary, said one associate, because the executive has been trying to shake the notion that he is a mere financier. And he had personally helped produce both “Seventh Son” and “Black Hat.” “He wants to be known as a creative force. He hates it when he is just thought of as the money guy,” said the source, who declined to be named when relaying personal conversations with Tull. “He wants to be known as the visionary.”
Tull is a New York native who came from humble beginnings, before parlaying a laundromat chain and tax preparation business into a career in finance. Once in Hollywood, he reached a deal to co-produce and co-finance films with Warner Bros., starting in 2005. That was fortuitous timing, given that the studio had been rocked by its uneasy merger with AOL. Craving partners with capital, Warner Bros. paved the way for Legendary to buy a position in “Superman Returns” and Christopher Nolan’s “Batman Begins,” which launched the “Dark Knight” films. Tull also hit paydirt with the “Hangover” films.
Those lucrative franchises got Tull off to a heady start. But after eight years Tull’s partnership with Warner Bros. began to unravel in 2013, with tensions boiling over between the Legendary chief and Warner’s then motion picture president Jeff Robinov. Tull began conversations with a number of other potential studio partners.
Kevin Tsujihara, who succeeded Barry Meyer as CEO of Warner Bros. Entertainment in March 2013, could not salvage the Legendary relationship and was looking for Warner to keep a bigger share of its prized franchises. Tull left the studio three months later in June, signing a new overall deal with Universal.
Under their co-financing and producing pact, Legendary and Universal agreed they could pick from each other’s prime titles. They declined to reveal details of the selection process. Besides the latest “Jurassic” movie, Legendary will finance an unknown percentage of at least two other Universal pictures this year — “Straight Outta Compton” and the “Steve Jobs” biopic. While there are high hopes for both films artistically, neither is expected to fill nearly as many seats as the Dino-blockbuster.
Likewise, Universal will own a part of Legendary’s “Warcraft,” a video game spinoff set for next summer, “Great Wall,” a co-production with the Chinese that focuses on the mystery surrounding the construction of the landmark, and a comedy horror flick called “Krampus.”
Media analysts view the Legendary-Universal partnership as mutually beneficial.
Jessica Reif Cohen, with Bank of America Merrill Lynch, said Universal has a “breadth” of assets to help Legendary, and “Comcast and Universal are gaining a lot from this relationship with Thomas Tull. They get access to that action-adventure, fanboy audience that he has catered to and also to his smart use of analytics. That is a big universe with a lot of potential.”