We’ll try and deduce the cashflows for a film like The Homesman later in the week. It was, reportedly, a $16M film. Most was shot in NM. If the production received a full rebate for filming there, that reduces the cost to $12M. We know the film was picked up by Saban Films in Cannes for $3.5M in MG’s. Reducing the spend, now, to $8.5M. The US distributor, Saban, has made $2.2M to-date through the film’s theatrical release. The foreign distributor, EuropaCorp, hasn’t recovered much of their investment either — if they only had the European release rights. Maybe Europa brought distribution to the table and didn’t put dollars into this film. Luc Besson is a smart guy after all.
If the production company received MG’s, it would seem doubtful that those MG’s equaled $8.5M. So it seems very unlikely that the film will make money for the production company or for the distributor. Although, the distributors $3.5M MG appears more likely to an eventual breakeven, than the production company recovering it’s $8.5M. And let’s face it — no one makes/invests in a $16M film to breakeven or use the investment for a tax loss. You invest because you think that it’s going to be a winner. And there’s inherent, multi-dimensional leverage in winning.
We’ll try to tie up the loose ends and make a projection as to where this film ends financially. Like a case study. The cases you do in graduate finance studies.
The film we’re working in will be 1/4 the budget of this film. If you keep your eyes open, you really can learn a lot from other people’s mistakes.
