March 10, 2004

The Cash-Flow of the Christ

A half-billion? Well, if I don't see a full 10% in cash, Mel's gonna
have some 'splaining to do when I come back."

Martin Grove at does the math for Mel Gibson's work of faith. Bottom line? Mell's looking at about a half-a-billion dollar hit from the money machine. Here's just a part of the picuture:

Then there are distribution fees to be paid to Newmarket, which has done a spectacular job releasing the film. While we don't know for sure what percentage fee Newmarket is getting, various reports have put it at 10-12 percent. Using a conservative 10 percent here leaves about $135 million. And then there are Icon's marketing costs (prints and advertising) to be recouped. Here, too, no one's telling us exactly what was spent, but some accounts have put "Passion's" opening and pre-opening marketing budget at a relatively modest $15-20 million. If we use the high end of that number to repay Icon's marketing costs, we've got -- well, really, Mel's got -- $115 million.

Of course, the longer a film plays the more marketing costs it generates since it needs some level of advertising support. As the Easter holiday period approaches it's likely that Icon will need to spend more on television spots and print ads. If the film enjoys the long run it seems to be on track for, those marketing costs along with other overhead costs will keep adding up over time. So let's knock that $115 million down to a mere $100 million in profits to Gibson and/or Icon.

Needless to say, that's just the tip of the iceberg. If a film grosses $400 million domestically, it could easily do twice that internationally. It could, of course, even do more. "Titanic," for instance, did about $1 billion abroad compared to about $600 million in the U.S. and Canada. "Passion" is likely to do extremely well in parts of the world like Latin America and South America where it will benefit from having a very large core audience of Christians. It could wind up in those territories as the biggest blockbuster of all time. On the other hand, how it performs in Japan and other Asian territories remains to be seen. While there isn't a huge Christian audience base to draw from in the Far East, the curiosity factor combined with global media coverage of the film's mushrooming domestic success could give it strength.
Something about: "Cast your bread upon the waters and...." seems right here.

Posted by Vanderleun at March 10, 2004 6:25 PM | TrackBack
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