Profiting from Passion
By JOHN LIPPMAN and MERISSA MARR
Wall Street Journal
(March 12) -- Mel Gibson is on track to reap at least $350 million in personal profits from his controversial "The Passion of the Christ" -- one of the biggest individual windfalls in Hollywood's long history of oversized payouts. The estimate is based on projections of people close to the film, as well as a consensus of people who routinely deal with the business aspects of filmmaking.
Mr. Gibson, 48 years old, owes the size of his bonanza in part to the major studios that spurned him: He financed the production himself and struck favorable deals with distributors. Given the enormous U.S. box-office take of "Passion" -- $228 million as of Wednesday -- its huge potential overseas ticket sales and its eventual DVD profits, the $350 million figure could well turn out to be low. Mr. Gibson's ultimate profits could soar to $400 million or more.
Hollywood insiders believe the only other filmmaker who personally profited as much from a single film is George Lucas, who financed and controlled all aspects of the release of his 1999 Star Wars movie, "The Phantom Menace." A spokeswoman for Mr. Lucas declined to comment. Other blockbuster movie makers, like Steven Spielberg, have generally worked within the studio system, which takes a big share of profits in return for financing and distributing films.
Not even the distributor of "Passion," Newmarket Films, anticipated the size of the audiences that have been flocking into theaters since the movie's opening on Feb. 25.
"I don't think anyone expected the film to do $125 million in the first five days," says Robert Schwartz, Newmarket's senior vice president of marketing and distribution. "We thought it might be capable of $45 million to $50 million, but beyond that it's a big gap."
Calculating Mr. Gibson's personal take of at least $350 million is fairly straightforward, although the final total will depend on a number of complicated factors. According to people familiar with the film, if the U.S. box-office receipts from "Passion" reach $400 million -- as many observers now expect -- Mr. Gibson will take home about $108 million. That number is derived by subtracting the theaters' share of the box-office receipts, Newmarket's distribution fee, and production and marketing costs. A spokesman for Mr. Gibson said he wasn't available for comment.
On top of his share of the U.S. ticket revenue, Mr. Gibson stands to earn at the very least another $100 million from overseas ticket sales, assuming the foreign box-office also reaches $400 million. That box-office figure is actually conservative, since the world-wide ticket sales from mega-hit U.S. movies often exceed the domestic sales. One question mark is Japan, the second-largest overseas market after Germany, where interest in a Western religious movie may not be high.
DVD Profits
The real gusher will come from DVD and video sales. Tom Adams, president of video market-research firm Adams Media Research, estimates that 22 million "Passion" DVDs will hit the world market, a number on par with the first "Harry Potter" movie or "Shrek." Based on average DVD prices -- and subtracting costs such as marketing and returns -- sales of those DVDs would yield $275 million. Mr. Gibson will share DVD revenue with Twentieth Century Fox Home Video, which has the rights to distribute the "Passion" DVD in the U.S. Fox declined to comment on the terms of the split.
"You have to figure he will get $100 million-plus," says Mr. Adams, referring to what he believes will be Mr. Gibson's piece of the DVD pie. But one person familiar with the agreement says the DVD deal with Fox more than flips the standard ratios between a producer and distributor in favor of Mr. Gibson's Icon Entertainment; that would result in additional tens of millions of dollars for Mr. Gibson.
Another big sum will come from the sale of pay-TV rights. Hollywood observers estimate Mr. Gibson will receive about $20 million from such a deal, plus at least $10 million from CD sales of the soundtrack, and another several million from licensing and merchandizing. Yes, there are "Passion" tie-in mugs as well as crucifix necklaces.
Together the total comes to about $350 million. But the ultimate sum could rise even higher if, as Newmarket's Mr. Schwartz believes, "Passion" exceeds the distributor's current North American box-office projections. "It's certainly in the realm of possibility that the film will top $400 million," Mr. Schwartz says.
That would make "Passion" a bigger hit than the top movie of last year, "The Lord of the Rings: The Return of the King," which has so far taken in $368.9 million at the U.S. box office. The all-time record in U.S. ticket sales is held by 1997's "Titanic," with $600 million.
No doubt other star directors and actors are taking note of Mr. Gibson's strategy, and hoping that they, too, can emulate his success. Mr. Gibson was able to foot personally the $30 million production cost of "The Passion" because he has made a series of movies where he earned more than $25 million to star.
There are at least a half-dozen other stars in the $25 million-per-picture league, not to mention dozens more who earn more than $10 million per picture, a level of wealth that might make it possible for them to finance their own movies. Mr. Gibson hasn't announced his next movie project. A spokeswoman for Twentieth Century Fox says he is still "attached" to star in the fourth "Mad Max" movie, which the studio had hoped to release this summer.
The movie is now mired in development limbo, but Mr. Gibson said recently that he is no longer interested in being in it.
Fox has completed production on "Paparazzi," a thriller produced by Icon, but no release date has been set. In a recent TV interview, Mr. Gibson said there are other stories in the Bible he could foresee making into movies.
Bloated Benchmark?
It's Hollywood's equivalent of grade inflation. In 1990, only nine movies made it into the elite "blockbuster" ranks of $100 million in box office; in 2003, that number had jumped to 29. Well, $100 million isn't exactly what it used to be: The $286 million gross of "Home Alone," the 1990 hit, equals $380 million when adjusted for inflation.
So, isn't it time to raise the benchmark that defines "blockbuster"? Many studio-distribution chiefs don't think so. With 470 movies released last year, the 29-member top group "is still a pretty club to get into," says Dan Fellman, head of distribution at Warner Bros. The $100 million benchmark is still good, concurs Sony Pictures Vice Chairman Jeff Blake. One unstated benefit to the status quo: Hollywood can boast it has more "blockbusters" than ever before.
But Bruce Snyder, distribution chief at Twentieth Century Fox, thinks the times-are-a-changin'. "If you're not looking at $150 million, pay no attention to it as a blockbuster," he says. "We shouldn't be looking at 20 to 25 blockbusters a year."
