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Company Town

Movie Money: Beyond the Box Office

June 23, 1998

To Our Readers:

The real measure of success for movie companies is not at the box office, but on the balance sheet. Beginning today, Company Town offers a new feature designed to shed light on one of the mysteries of the movie business: film profitability.

The Company Town Film Profit Report will attempt each Tuesday to estimate the financial strength of the major studio releases.

The last decade has seen a dramatic change in the movie marketplace, with films moving from theatrical to video to television in ever shorter periods. As a result, movie companies have a strong idea within days--sometimes within hours--of a film's U.S. theatrical release whether it will be profitable.

With this chart, The Times seeks to bring to readers information about movie costs and profitability that is commonly discussed in executive suites. Our estimates are based on a combination of industry sources and commonly used industry financial models.

Since the financial details on a film are not disclosed by movie companies, our estimates will sometimes be off. But as each film plays out over time, the forecasts should be increasingly accurate.

Company Town welcomes comments. Call (213) 237-2001 or send e-mail to company.town@latimes.com. Send faxes to (213) 237-7837.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Company Town Film Profit Report

Domestic box office typically accounts for only a fifth of a movie's revenue stream, which includes global box office, video and TV deals. But the opening weekend has become so crucial for studio movies that rough calculations of profitability can be made early in a film's life. While each film is a unique business and exact forecasts are impossible, Company Town will assess the financial strength of the week's top movies based on a combination of industry sourcing and financial models. Results for the weekend of June 19-21:

$$ Mega-Moneymakers

Movie Title: The Truman Show

Studio: Paramount

Box-office rank: 3

Estimated cost, in millions: $60

Projected U.S. box-office receipts: $130

*

Movie Title: Deep Impact

Studio: Paramount/DreamWorks

Box-office rank: 9

Estimated cost, in millions: 100

Projected U.S. box-office receipts: 140

*

Movie Title: The X-Files

Studio: 20th Century Fox

Box-office rank: 1

Estimated cost, in millions: 66

Projected U.S. box-office receipts: 90

*

Movie Title: Mulan

Studio: Buena Vista

Box-office rank: 2

Estimated cost, in millions: 100

Projected U.S. box-office receipts: 115

$ Moneymakers

Movie Title: Hope Floats

Studio: 20th Century Fox

Box-office rank: 7

Estimated cost, in millions: $30

Projected U.S. box-office receipts: $50

*

Movie Title: Godzilla

Studio: Sony

Box-office rank: 8

Estimated cost, in millions: 120

Projected U.S. box-office receipts: 145

*

Movie Title: Can't Hardly Wait

Studio: Sony

Box-office rank: 6

Estimated cost, in millions: 13

Projected U.S. box-office receipts: 25

? Tossups

Movie Title: The Horse Whisperer

Studio: Buena Vista

Box-office rank: 10

Estimated cost, in millions: $75

Projected U.S. box-office receipts: $72

*

Movie Title: A Perfect Murder

Studio: Warner Bros.

Box-office rank: 5

Estimated cost, in millions: 60

Projected U.S. box-office receipts: 70

*

Movie Title: Six Days, Seven Nights

Studio: Buena Vista

Box-office rank: 4

Estimated cost, in millions: 65

Projected U.S. box-office receipts: 70

Money Losers

Movie Title: Bulworth

Studio: 20th Century Fox

Box-office rank: 16

Estimated cost, in millions: $35

Projected U.S. box-office receipts: $28

*

Movie Title: Dirty Work

Studio: MGM/UA

Box-office rank: 11

Estimated cost, in millions: 16

Projected U.S. box-office receipts: 11

*

Notes: Cost estimates are for production only. Only half of box-office receipts come back to the studio.

Researched by RICHARD NATALE

If you have information or comments about the chart, call (213) 237-2001 or send

e-mail to company.town@latimes.com. Send faxes to (213) 237-7837.

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