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Dino Soars Again : Why Invest in a Sequel? Tour Spielberg's 'World'

May 30, 1997|CLAUDIA ELLER

Steven Spielberg is ambivalent about doing sequels, but it's probably safe to assume that the world's most successful director and producer has few regrets about having made a follow-up to his 1993 blockbuster, "Jurassic Park."

It's also safe to assume that the other major profit participants in "The Lost World: Jurassic Park"--the film's financier and distributor, Universal Pictures, and author Michael Crichton, whose books are the basis for the sequel and its predecessor--are equally elated.

Spielberg & Co., who cleaned up on "Jurassic," stand to make another fortune on "Lost World." Spielberg and Universal, essentially 50-50 partners on the movies, walked away with about $300 million each on "Jurassic." Spielberg's cut of the profits on "Lost World" are even greater, as is Crichton's, though the writer's are considerably less. Neither took any upfront fees.

"Jurassic Park," the world's top-grossing movie of all time, netted a pure profit of close to $700 million. Although blockbusters of this kind are rare, Hollywood studios are willing to risk upward of $100 million on their big movies in the hope of capturing such dinosaur-sized paydays.

"It allows us to build value across all of our businesses from consumer products to home entertainment to theme parks," Universal Pictures Chairman Casey Silver said.

Released a week ago, the "Jurassic" sequel has taken in $100 million in record speed, and industry analysts believe it has a good shot at besting the $916 million the original collected at the theatrical worldwide box office.

Spielberg--who now owns his own studio, DreamWorks SKG, with Jeffrey Katzenberg and David Geffen--is more cautious: "In my opinion, 'The Lost World' will not equal or surpass 'Jurassic Park' either domestically or internationally," he said Thursday through a representative.

The industry's rule of thumb is that sequels generally gross 60% of the originals. "Lost World" will certainly beat those odds.

It's believed that "Jurassic" generated as much as $3 billion from all revenue sources, including worldwide box office, videocassette and television sales, merchandising and such intangibles as theme park attractions.

In worldwide merchandising, the original movie amassed $1 billion in retail sales, according to Jim Klein, president of Universal's consumer products group, and "Lost World," he said, "is looking significantly bigger than 'Jurassic' from a merchandising standpoint." Klein said a number of retailers, in more than 10,000 locations nationwide, "are out of stock" on various merchandise items, including toys, apparel and consumables such as cereals and candy.

Klein said that collectively, Universal's promotional sponsors, which include Burger King, General Mills, Kodak and Mercedes-Benz, "are spending $250 million in media dollars on the property."

Brad Globe, head of consumer products for DreamWorks who has worked with Spielberg for 14 years, said of "Lost World" merchandise: "We've never seen anything like this . . . it's selling at levels that well surpass the first film--the stuff is blowing off the shelves."

Studios typically earn royalties of 10% to 12% on the wholesale merchandise revenues, which for "Jurassic" was about $500 million to $700 million.

Industry analysts like Hal Vogel, of Cowen & Co., predict that the ultimate impact of "Lost World" in terms of a total revenue generator, could be "about equal or more" than "Jurassic" given the film's strong start.

Universal executives, while hoping that the current momentum will drive the film to even greater records than its predecessor, are reluctant to make projections.

"If I could predict that, I'd be doing something else with my life," said Nikki Rocco, Universal's president of distribution. But, taking an educated guess, Rocco said: "We think the picture will certainly get into the high twos [$200 million, domestically], but we don't know what the legs are."

"Legs," in Hollywood parlance, refers to how long a movie can sustain itself in the marketplace in the face of competition.

"Lost World," which had little competition when it debuted last weekend, has nothing to worry about until the weekend of June 6, when an onslaught of big summer movies, beginning with Disney's "Con Air," flood the marketplace.

Rocco said "Lost World" is doing "summer business and it's not even summertime." Kids won't be out of school until mid-June--and kids on summer break translates to bigger box office.

Industry observers believe the sequel will gross more than $300 million domestically ("Jurassic" grossed $357 million) and could very well outperform "Jurassic's" international take of $559 million, mainly because of the expansion of foreign markets over the last four years. There are more multiplexes overseas, newly opened or expanded territories in Asia and Eastern Europe and television has exploded on a global basis.

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