32nd Annual Grosses Gloss: How the majors stacked up in 2006
By Roger Smith
Enough about the little guys, who's got the most collectible Burger King cups? Aspiring investors, look no further
Most of the majors are more or less guilty of making too many movies that cost too much. But there are some noticeable differences among the various studios from a business standpoint. While nearly everyone got at least some good news last year, a few stood out:
Rebounded from a hideous 2005 and came out on top of the box-office race last year. And it did so by releasing (mostly) profitable movies. The Da Vinci Code, Casino Royale, Talladega Night, The Pursuit of Happyness, The Pink Panther, Monster House, The Holiday, and Open Season added up to its best year ever—indeed, the highest one-year domestic gross for any studio. It also made a medium-budget title, Underworld: Evolution, into a $111 million worldwide grosser and a solid DVD performer. All the King’s Men and Running with Scissors were its two outright flops. The now-defunct Revolution Studios brought it one hit—Click—a couple of so-sos, and two real disasters, Freedomland and Zoom. Small-pic sibling Sony Classics did respectable business on two foreign films, Volver and Curse of the Golden Flower, but otherwise released 10 titles without even one semi-breakout.
Not far behind, as the second sailing of the Pirates of the Caribbean became only the third picture in movie history to gross more than $1 billion worldwide. Little-noticed Step Up did $112 million in worldwide box office—plus huge U.S. DVD sales—on a negative cost of $12 million. Out-and-out animated loser The Wild reminded Disney how much it needed the geniuses at Pixar—$6.4 billion in Disney stock worth. Cars managed to fall into the ever-so-slightly disappointing category, despite a worldwide b.o. of $462 million—perhaps because of that hefty Pixar price tag. Post-Weinstein Miramax had one giant success to shout about—The Queen—but only fair-to-poor results on about eight other titles.
May have come in third in the b.o. derby, but wins the Most Profitable Studio title hands down, as it has for a number of years running. It had a superb year, with nary a blot on its copybook. Its biggest grosser may have been X-Men 3, but its worldwide $455 million box office came with a $210 million production cost. Fox generated an astounding $650 worldwide gross—70 percent of that from outside the U.S.—with Ice Age: The Meltdown, proving that CGI animation is not an exclusive Pixar/ DreamWorks province. Its greatest marketing success was unquestionably The Devil Wears Prada, a brilliant piece of counterprogramming that pulled in $300 million plus worldwide on a $38 million budget. Fox then finished the year with Night at the Museum, whose $500 million plus worldwide gross belied (or, to the cynics, confirmed) its utter lack of creative merit. While the cultural impact of Borat has been discussed to death, a $250 million worldwide gross on an $18 million negative cost is simply dazzling. About the only serious brush with red ink at the studio last year came from A Good Year, Ridley Scott’s comedy starring Russell Crowe, which failed abysmally. Fox Searchlight rang the cash register with Little Miss Sunshine to the tune of $95 million worldwide, and pulled in big numbers—relative to cost—on both The Hills Have Eyes and Thank You for Smoking.
Had the worst three quarters of releases any major has almost ever strung together. While Superman may have flown, it didn’t soar. Poseidon cost an admitted $160 million—and a rumored $200 million and its puny domestic gross of $60 million was matched by even punier DVD sales, and its surprising overseas box office of $120 million made only a small dent in a huge financial loss. Throw in Firewall, Lady in the Water, and The Ant Bully—well, you get the picture. Thanks to Happy Feet and The Departed (now there’s a double feature), the year ended on a far merrier note for Warners, as those dancing penguins have brought in $365 million in worldwide ticket sales, while The Departed produced both Oscar prestige and a $280 million gross. Little Warner Independent drilled half a dozen dry holes for a minuscule total domestic box office of $19 million.
Had what sportswriters call a rebuilding year. The merger with DreamWorks injected some new—but not necessarily better—management and some new titles into what had been for several years an increasingly moribund slate. But the studio only collected a modest distribution fee for Over the Hedge and Flushed Away. The real profits (from Over the Hedge) and the serious losses (from Flushed Away) belong to Jeffrey Katzenberg and the shareholders of DreamWorks Animation. Mission: Impossible III was a solid if costly grosser, with 90 percent of the profits accruing to Tom Cruise—who will now discover the joys of making and financing his own films. Nacho Libre and Jackass: Number Two proved highly popular with those who move their lips on the rare occasions when they read. Barnyard and Charlotte’s Web were semi-disappointments in the kiddie category. Babel might, despite being a no-show at the Oscars, eke out enough foreign shekels to edge into profitability. Last, classics division Paramount Vantage had one moment in the sun, both fiscally and critically, with An Inconvenient Truth, which at $45 million has grossed more than any other PowerPoint presentation in history.
The only major to release fewer films in ’06 than in ’05. The Break-Up, You, Me and Dupree, Nanny McPhee, and Inside Man were bona fide hits while Miami Vice was sunk by its $135 million cost. The Fast and the Furious: Tokyo Drift, the third in the faltering franchise, didn’t catch fire in Japan—a particularly telling failure. United 93 was a critical success that, while not breaking out, did garner a solid audience both domestic and foreign—and on DVD. Its modest $15 million cost made it the kind of film the studios need to make more of. Alfonso Cuarón’s Children of Men cost $76 million, but most likely won’t reach that figure in worldwide b.o. (High-priced “art” remains the most dangerous sector of all.) Lastly, Universal made a large bet on De Niro’s pricey The Good Shepherd. Overseas results will decide whether that bet will pay off modestly or yield serious red ink. Sister shingle Focus had a sorta hit with Scoop from Woody Allen, whose filmmaking seems to have benefited lately from being forced by past fiscal—and critical—failures to work within more limited budgets. Otherwise, Universal’s specialized division had little to talk about in ’06—especially after its exhilarating run in 2005.
Now owned partially by Sony and mostly by various financial players, it had 15 releases in 2006, mostly pick-ups—films in which it had little or no direct investment. Flyboys cost someone $60 million, while grossing $13 million. The only title of real consequence on their 2006 slate was Rocky Balboa, which gambled $24 million on whether audiences would come to see Sylvester Stallone put on the gloves yet again. The answer came out surprisingly positive, with the worldwide gross reaching $140 million so far, raising the frightening prospect that there might be still another Rocky pic to come. But perhaps the lowest gross of any major release this past year came from MGM, whose Home of the Brave managed to last four days in three theaters, pulling in $6,000 in toto.
Technically a mini-major, but still run like the indie start-up it began life as. This despite 10 years as a subsidiary of Time Warner and vast creative and commercial success. It may be hard to call a year in which its total domestic box office fell 40 percent a “success,” but in fact it almost was. New Line released its usual 10 titles, it just had no breakout films comparable to 2005’s The Wedding Crashers—although Final Destination 3 grossed $113 million worldwide. But no New Line film had a budget above $40 million, and the likes of Texas Chainsaw: The Beginning (a $50 million worldwide gross on a $16 million negative cost) and Snakes on a Plane (no snickering, please) were solidly profitable. Running Scared and Hoot managed to lose fairly inconsequential amounts of money. New Line’s most serious loser in ’06? Its sole foray into “art” last year, Little Children, cost $26 million and has barely rounded the $5 million mark in domestic box office.
Likes to call itself the last true remaining indie—a title it merits if by indie you mean low-budget genre pics and not anything even remotely highbrow. Its six lead titles—Saw III, Hostel, Madea’s Family Reunion, The Descent, Crank, and Employee of the Month—pulled in a total worldwide gross of $420 million on a combined production budget of less than $60 million. While its shareholders may have more reason to be happy than the critics who attend their screenings, the company clearly knows how to connect with those increasingly elusive younger males.