Sony watch: studio facing challenges

The New York Times, IN THE LEAD STORY IN ITS MAY 19 BUSINESS SECTION has a detailed story about challenging times at Sony Pictures, the entertainment arm of Sony Corp.

One problem: it’s not as profitable as other studios, even with Agent 007 in its portfolio. According to reporters Brook Barnes and Michael Cieply, Sony’s operating margin was 6.5 percent and “figures at Warner Brothers, Disney, Paramount and 20th Century Fox were all higher.”

Here’s an excerpt with part of the explanation:

SONY’S $4.4 billion in ticket sales last year was impressive, but shareholders care about profit margins.

The movie studio’s bottom line didn’t look better for several reasons. For one thing, about 75 percent of the “Skyfall” revenue went to Metro-Goldwyn-Mayer after James Bond rights holders took their cut. Revenue from some DVD titles — “Zero Dark Thirty,” for instance — will come in the next fiscal year. But more important, “Men in Black 3” cost an arm and a leg, and when you’re making this many movies some are bound to miss: Sony’s hits were offset by the major flops “Total Recall” and Mr. (Adam) Sandler’s “That’s My Boy.”

Thus, in the case of Skyfall, which Sony distributed, the studio was third in line after the Broccoli-Wilson family and Metro-Goldwyn-Mayer.

Another challenge is investor Daniel Loeb, whose Third Point LLC, acquired a 6.5 percent stake and wants Sony Corp. to sell of 20 percent of its entertainment business and focus on its consumer electronics unit. Loeb, according to the Times, “specifically complained” about profitability of the entertainment unit. Sony said the entertainment business wasn’t up for sale.

Sony’s Columbia Pictures has distributed the last three 007 films (Casino Royale, Quantum of Solace and Skyfall) and is contracted to do so again for Bond 24 whenever it’s made.

For the complete NYT story, CLICK HERE. For more, you can CLICK HERE for a May 16 Bloomberg.com story headlined “Sony’s $100 Billion Lost Decade Supports Loeb Brakeup.” You can also CLICK HERE for a May 14 story by the Deadline entertainment news Web site.

The family model (Eon) vs. the corporate model (Marvel)

Family model: 2012′s Skyfall

In some ways, the Marvel Studios operation of Walt Disney Co. is like a machine. It has a movie coming out early next month in the U.S. (Iron Man 3), has another slated for November (a sequel to 2011′s Thor), has another filming for 2014 (a sequel to 2011′s Captain America) and has the script written for a 2015 sequel to a big hit last year (Marvel’s The Avengers). Marvel is one of the more successful examples of what we’ll call the corporate model.

Last year, was also a triumph for what we’ll call the family model, Eon Productions, owner of half of the James Bond franchise and run by the family of the late Eon co-founder Albert R. Broccoli. Skyfall was by far the biggest financial success (not adjusted for inflation) for the 007 film series ($1.11 billion in worldwide ticket sales) and, by some estimates, even adjusted for inflation.

Yet, for the moment, it’s not known when the next Bond film adventure, Bond 24, will come out. 2014? 2015? Maybe even 2016? Some executives at Sony last year said 2014, while Eon co-boss Barbara Broccoli said not so fast. The latest word from Metro-Goldwyn-Mayer, the other co-owner of the franchise was sometime in the next three years. Not exactly precision scheduling.

OK, just to get this out of the way. If you’re not inclined to like movies based on comic book characters on principle, or you were a DC Comics guy as a kid rather than Marvel fan, the success of the Marvel movies will not impress you. For that matter, if you’re not a James Bond fan (not exactly the target demographic of this blog), Skyfall’s success won’t mean much either.

Corporate model: 2012′s The Avengers

Once upon a time (1962-1965, to be precise), Bond adventures came out like clockwork on an every-year schedule. But that was a much-simpler time. Still, since 1989, the 007 films have been produced with more erratic timing: a six-year gap, followed by three films on an every-other-year schedule. followed by a three-year gap, four years, two years, four years. Not all of that was Eon’s fault (MGM’s financial troubles have contributed), but it hasn’t been something to set your calendars by.

In the early 1990s, there was talk of getting the 007 series back on an yearly schedule but that never developed. With 1995′s GoldenEye, the future of the series was riding on the movie and Eon concentrated its efforts on that film. In later years, Michael G. Wilson, the other Eon co-boss who’s now in his 70s, has spoken of the personal strain of making Bond movies. While Eon has its own organization, it’s still largely driven by the half-siblings, Broccoli and Wilson.

Once upon a time, Marvel was a more family-like company (Smilin’ Stan, King Kirby, Sturdy Steve, Jazzy Johnny, Gene the Dean and all that) but that disappeared a long time ago — and went away entirely once Marvel was acquired by Disney. Kevin Feige, one of the lead bosses at Disney’s Marvel Studios operation, talks about this or that but rarely (if ever) about how hard being a producer is. He has a movie assembly line to keep going and, so far, has been doing it.

The 2012 box office results showed when done well, both models can be successful: The Avengers was No. 1 worldwide while Skyfall was No. 4 in the U.S. But the models are different. The corporate model prefers predictability, especially with schedules. But for fans of the family model, the lesser predictability is a strength, not a weakness. Vive le la difference.

Why we guess Bond 24 won’t be out until at least 2015

Daniel Craig in Skyfall

This week, Gary Barber, the CEO of MGM Holdings Inc., the parent company of Metro-Goldwyn-Mayer, said the company is “hoping within the next three years” that Bond 24 will be released.

That’s a much different tune that late 2010 when MGM, in bankruptcy court, said it planned TO GET THE BOND FILM SERIES BACK ON AN EVERY-OTHER-YEAR SCHEDULE. It was even different from November when Barber told investors that MGM was “hopeful” that Bond 24 could come out in 2014. “If not in ’14, certainly in ’15,” he said at that time.

With these week’s comments by Barber, entertainment Web sites such as WHATCULTURE! and FLICK DAILY are taking the MGM CEO literally and saying Bond 24 won’t be out until 2016. That’s probably extreme, but Barber and MGM clearly are backing off the idea of Bond 24 coming out in 2014.

Here are our guesses why:

Eon Productions (which actually makes the 007 films) doesn’t seem keen on a 2014 timetable: Last year, an executive of Sony Pictures (which co-financed Skyfall with MGM and co-financed the movie) said Bond 24 would make a 2014 release date. Barbara Broccoli and Skyfall star Daniel Craig slapped that idea down in an interview with COLLIDER.COM.

(QUESTION:) Last week Rory, the president of distribution of Sony, announced Bond 24 for I guess late 2014…

Broccoli: He was getting a little overexcited (laughs). We’re just actually focusing on this movie. One hopes that in the future we’ll be announcing other films, but no one’s officially announced it (emphasis added)

Craig: No one’s announced anything. He got a little ahead of himself (laughs).

(emphasis added)

Actually, somebody had announced something — an executive of Sony Pictures, an Eon Productions business partner who was acting in his official capacity, had announced that Bond 24 was coming out in another two years. In effect, Broccoli and Craig were saying, “Move along, nothing to see here.”

In an interview with the LOS ANGELES TIMES, Barbara Broccoli had this comment about studios:

“Sometimes there are external pressures from a studio who want you to make it in a certain time frame or for their own benefit, and sometimes we’ve given into that,” Broccoli said. “But following what we hope will be a tremendous success with ‘Skyfall,’ we have to try to keep the deadlines within our own time limits and not cave in to external pressures.”

In the case of MGM, it co-owns the 007 franchise with Eon. But, based on these comments, it would seem as if Broccoli doesn’t view MGM exactly as a partner. At the very least, it doesn’t sound like Broccoli wants to hurry the process along. Meanwhile, Broccoli and Michael G. Wilson, Broccoli’s half brother and the other-co boss of Eon, had this to say in an interview with the DEN OF GEEK! Web site:

Have any preparations been made for Bond 24 yet?

Broccoli: No, no.

How long a space do you think you’ll need?

Wilson: If we’re rapid it’ll be two years, if we’re not it’ll be three. (emphasis added)

It’s not as critical for MGM to get Bond 24 out by 2014: When MGM made that filing in bankruptcy court it was, well, bankrupt. This week, it reported considerably improved financial results for 2012, much of it from Skyfall and The Hobbit: An Unexpected Journey.

The Hobbit has release dates for sequels in 2013 and 2014. Presumably, MGM will want Bond 24 sooner than later, but a 2014 release date isn’t a matter of life and death for the studio. Meanwhile, Bond remains an important asset for MGM and CEO Barber talked on this week’s investor call how the company was working with its “partners” (his words) at Eon. If Eon isn’t that keen for a 2014 release, Barber has less reason to force the issue at this point.

To quote M from the film You Only Live Twice, “Mind you, all of this is pure guess work.” But our guess is that a 2015 release for Bond 24 is more likely than a 2014 one.

MGM watch: Studio CEO is cagey about Bond 24 release date

The top executive of MGM Holdings Inc., parent company of Metro-Goldwyn-Mayer, was cagey about a release date for Bond 24 during an investor call on March 19.

“The timetable is not set yet,” Chief Executive Officer Gary Barber said in response to a question. “We’re hoping within the next three years it will be released.”

When MGM was in bankruptcy court in 2010, part of its business plan was to get the 007 movies back on an every-other-year schedule, with Bond 24 coming out in 2014. Barber said nothing about a 2014 release date during the March 19 call.

Referring to Bond 24, Barber also said, “We’re currently developing the screenplay and we’re working with our partners at Danjaq. We look forward to developing the script soon and signing a director in the near future.” Danjaq LLC is responsible for copyrights and trademarks of the 007 films which are produced by Eon Productions, run by Michael G. Wilson and Barbara Broccoli.

Barber was also asked why Sam Mendes, the director of Skyfall, wasn’t returning for a 007 encore.

“He did an amazing job on Skyfall. We’re very thankful for the work he did. He decided to pursue other interests at this time. We look forward to announcing a director soon. We’re very thrilled about where we’re taking the franchise.”

A replay of the investor call is on the INVESTORS RELATIONS SECTION OF MGM’S WEB SITE. Barber’s comments about Bond 24 came during the question-and-answer session, which begins about half-way through the call. Barber, on a November investor call, confirmed that John Logan was writing the scripts for Bond 24 and Bond 25.

MGM owns half the 007 franchise with Danjaq/Eon. MGM co-financed Skyfall with Sony Pictures, which actually released the movie. MGM and Sony will repeat the arrangement on Bond 24.

MGM watch: Skyfall helps make studio profitable

Skyfall’s poster image

MGM Holdings Inc., parent company of Metro-Goldwyn-Mayer, said it turned a profit for 2012, much of it on the strength of Skyfall, the 23rd James Bond film, and The Hobbit: An Unexpected Journey.

MGM’s profit totaled $129 million for the year on revenue of $1.38 billion. the company said in had an adjusted profit (i.e. what the profit would have been if it didn’t have to pay taxes, interest and other costs) of $286 million, according to a company statement. That measure, known as EBITDA (or earnings before interest, taxes, depreciation and amortization), is used by some investors as a way to gauge a company’s financial performance.

MGM said it was the first studio to have back-to-back films with $1 billion or more in ticket sales each. The company had a $40.2 million profit for the year’s fourth quarter (a period that included the releases of Skyfall and The Hobbit), and $147.7 million EBITDA. That compares with an $11 million loss (and $19.4 million EBITDA profit) for 2011′s fourth quarter.

Fourth-quarter revenue totaled $902.6 million. or 65 percent of the revenue MGM had for the entire year.

MGM co-financed both of its hit movies, Skyfall with Sony Pictures and The Hobbit with Time Warner’s Warner Bros. Skyfall also involved splitting the take with Eon Productions, which produces the 007 films.

MGM went through bankruptcy in 2010, which resulted in the current executive team led by CEO Gary Barber being installed.

Two thoughts about Bond 24

Not directing Bond 24

At this point, we know more about what’s not happening with Bond 24 than what will.

It won’t be directed by Sam Mendes (because he took his name out of the running), Christopher Nolan (who had a conflicting engagement directing a science fiction movie due out in November 2014) or Danny Boyle (because, according to TYHER PLAYLIST WEB SITE he told an audience he’s not interested in that type of movie).

But there have been some items published recently that spur a couple of thoughts:

Sam Mendes declining to have a go at Bond 24 might not be that bad a thing. Many fans are disappointed that the director of Skyfall won’t be back for Bond 24. So is the co-boss of Eon Proudctions, Barbara Broccoli, who in stories SUCH AS THIS ONE described herself as devastated by Mendes’s decision.

Still, stop and think about it. Directing Bond 24 will involve six or seven months of production and months of preparation and pre-production work and additional time in post-production. If somebody doesn’t want to do something, or simply isn’t sure, they probably shouldn’t take on such a huge task until they’re ready.

Had Mendes, after a couple of months off from the Skyfall post-production grind, decided he really, really wanted to do Bond 24, that’d be one thing. But based on the director’s comments, he doesn’t seem to be at that point. With a huge endeavor such as Bond 24 is likely to be, it’s perhaps best to let somebody who’s more geared up to try.

Maybe John Logan should get a chance to write more before a director is chosen. Nobody really knows, except a precious few people at Eon, Metro-Goldwyn-Mayer and Sony Pictures, how far along the co-scripter of Skyfall is in crafting a Bond 24 story.

Some directors like to see a developed story before committing to a major project. For example, Roger Michell was approached about directing what would become 2008′s Quantum of Solace. There were various stories (such as THIS ONE ON THE MI6 007 FAN WEB SITE) where Michell was quoted as saying the script was developed enough for him to take the job.

Whatever the status of Logan’s work on Bond 24′s story, perhaps Logan should have sufficient time before worrying too much about who will direct the next 007 film.

How Christopher Nolan’s new film affects Bond 24

Christopher Nolan

Christopher Nolan, director of the 2005-2012 Batman trilogy of films, is directing a new science fiction movie that has a Nov. 7, 2014 release date ACCORDING TO A PRESS RELEASE.

Interstellar will be co-produced by co-released by Warner Bros. and Paramount. The development may also affect Bond 24. For one thing, this appears to kill any chance that Nolan would direct Bond 24 after Sam Mendes turned down the project. That will disappoint some fans who’d like to view Nolan’s take on 007.

The earliest Bond 24 might come out is late 2014 and Nolan’s time is spoken for that kind of timetable. Even if Bond 24 ends up with a 2015 release date, would Nolan want to turn around from one major project to start working on another? Or would the director want to recharge his batteries?

The latter seems more likely. Nolan’s movies are often complex affairs with lots of special effects. His last three movies as a director (The Dark Knight, Inception and The Dark Knight Rises) were done at two-year intervals.

Meanwhile, Interstellar’s release date might affect Bond 24 IF the Bond film comes out in 2014. Sony Pictures and Metro-Goldwyn-Mayer probably would want some space between Interstellar and Bond 24 on the release calendar. Studios generally don’t want their “tent pole” films (blockbusters in non-studio executive speak) coming out on top of one another.

It’s not a sure bet that Bond 24 will come out in 2014, of course. But Interstellar would be part of the chess game that studios play if Bond 24 gets a ’14 release date.

You can CLICK HERE to view a January story in the Hollywood Reporter about how Nolan was in talks to direct the movie.

Skyfall now No. 2 for 2012 movies, No. 7 all-time

Skyfall’s poster image

Skyfall, the 23rd James Bond film, is now the second-highest for 2012 movie ticket sales and No. 7 all-time, according to Box Office Mojo.

The Web site, which tracks movie ticket sales, now estimates Skyfall’s box office at $1.09 billion as of 3 p.m. New York time.

The Sam Mendes-directed Skyfall has now passed The Dark Knight Returns at $1.08 billion. The final of director Christopher Nolan’s Batman movies had held the No. 2 spot for 2012 and No. 7 slot for all-time. Mendes has said previously that Nolan’s second Batman film, The Dark Knight, influenced the development of Skyfall.

The No. 1 2012 movie for ticket sales was Marvel’s The Avengers at $1.51 billion, which is also No. 3 all-time. All figures not adjusted for inflation.

Skyfall will be released on home video this month.

Skyfall’s legacy

Skyfall’s poster image

As Skyfall’s run in theaters ends (outside of China, anyway), there have been various efforts to analyze its place in 007 history, including whether or not it should be considered the top Bond performer even adjusted for inflation.

Here’s a simpler evaluation, without math or complicated comparison of box office from different eras over a half century: Skyfall, whether you liked it (and many did) or not, re-established or confirmed (depending on your view) Agent 007 as a major player in pop culture.

Not that long ago, Harry Potter films had passed 007 for worldwide ticket sales. Many 007 fans cried foul, saying such comparisons were unfair. Today, after Skyfall has reached No. 8 all time in adjusted ticket sales? You don’t hear that so much.

In 2008, Quantum of Solace got off to a strong opening weekend in the U.S. but faltered the next weekend when Twilight,the first of series of movies about young vampires, arrived in theaters. Four years later, Skyfall and 007 got even, recording higher ticket sales, even in the U.S., Twilight’s home ground for The Twilight Saga: Breaking Dawn Part 2, the final bow of the young vampires.

All of this occurred despite a bankruptcy at Metro-Goldwyn-Mayer, the studio that controls half of the 007 franchise. It happened despite a four-year hiatus for 007.

Is 007 as big as 1965, when Thunderball set a James Bond box office record for (unadjusted for inflation) worldwide ticket sales that would stand until 1973′s Live And Let Die? Well, 1965 was a big year for Bond: it started out with Goldfinger still playing in theaters, was followed by a Dr. No-From Russia With Love getting re-released as a double feature and concluded with Thunderball. Thanks to home video, that kind of almost-constant run in theaters can’t happen today.

On the other hand, remember Thunderball wasn’t even the most popular movie in the year it was released. The Sound of Music had higher U.S.-Canada ticket sales than Thunderball did worldwide. Thunderball was a huge hit, to be sure, but some fans may remember it as being even larger than it was.

Skyfall, which debuted in Chinese theaters last week, is right behind The Dark Knight Rises for No. 7 all-time (unadjusted) and No. 2 movie worldwide for 2012 releases.

Eon Productions, MGM and Sony Pictures (which has released the last three 007 films) face a tough comparison when Bond 24 goes into production. But that’s a discussion for another day. As of early 2013, Harry Potter, Twilight and Batman (at least until the next reboot) have fallen away; agent 007 is still plugging away. That’s Skyfall’s real legacy.

Skyfall jumps to No. 8 all time after China ticket sales

Agent Eve is rather excited about Skyfall’s box office.

Skyfall jumped to No. 8 in all time worldwide ticket sales from No. 11 a week ago after the 007 film’s first week of ticket sales in China.

The 23rd James Bond film’s worldwide total rose to $1.078 billion as of 11:55 a.m. New York time, according to BOX OFFICE MOJO. That did not include an estimate for U.S.-Canada weekend ticket sales. so the figure will probably be revised later today

Skyfall generated $18 million in ticket sales in China within its first four days of release, according to THE HOLLYWOOD REPORTER ON JAN. 24.

As a result, Skyfall has passed Toy Story 3 and Pirates of the Carribean: Dead Man’s Chest on the all-time list by unadjusted worldwide ticket sales. It’s just below (again as of 11:55 a.m.) The Dark Knight Rises at No. 7 at $1.081 billion.

UPDATE (2:45 p.m.): Skyfall doesn’t show up on Box Office Mojo’s U.S.-CANADA CHART FOR THE JAN. 25-27 WEEKEND. It’s still at some theaters, but if Box Office Mojo is correct, the film didn’t generate $18,000 in U.S.-Canada ticket sales this weekend. In any event, Box Office Mojo didn’t revise Skyfall’s worldwide ticket sale figure after 11:55 a.m.

UPDATE II (Jan. 28): Box Office Mojo updated Skyfall’s worldwide total to $1.0785 billion after adding U.S.-Canada ticket sales over the weekend. The U.S. Canada total is now $302 million.