"Charles, can you tell me what you plan to do with Marvel Company later?" In a meeting room at New York's Central Park Hotel, Avi Arad signed the agreement for the transfer of 13% of Marvel Company's shares.
A cash check for $37 million was indeed something Avi Arad couldn't refuse. Based on Marvel Company's current stock price, its market value was $285 million.
Watching Avi Arad sign his name, Charles smiled and said, "Make our own movies, just like what I'm doing at Capet Pictures!"
Avi Arad shook his head and reminded him with a wry smile, "That's very difficult. Shareholders led by Ike Perlmutter won't agree, even if you are the talented Charles Capet."
Charles walked to the window, looking at the Plaza Hotel on 59th Street, which had already been closed off. The Plaza Accord was signed there by the five nations of the US, Japan, UK, France, and Germany.
"Look, even the famous Plaza Hotel needs to be renovated and innovated before it can reopen. Marvel Company's model is completely unsuited to the current Hollywood model."
The scruffy, bald Avi Arad also came to the window and agreed, "Relying on selling character rights to other film companies will only ever get us some scraps. Marvel certainly needs innovation!"
"A group of people who don't understand Marvel Company cannot manage Marvel well," Charles said, turning to look at Avi Arad again, implying, "You can't build without breaking!"
After Capet Pictures acquired 13% of Marvel Company's shares from Avi Arad, plus the 12% shares previously acquired from the market, Charles now owned 25% of Marvel's shares.
Not counting the shares acquired by the entrusted ETA, Charles was now the second-largest shareholder of Marvel Company.
"Annie, inform Marvel Company that I demand a shareholders' meeting be held in one month!" After returning to Greenwich Street, Charles quickly instructed his financial officer, Annie Depp, to prepare to confront Marvel's shareholders.
"Understood!"
"Boss, there's an invitation to a charity gala at The Metropolitan Museum of Art in New York. Do you want to go?" Fili entered Charles's office and placed an invitation on his desk.
Charles directly took it and threw it into the trash can, complaining, "It's just a bunch of exaggerated clowns trying to attract attention!"
Phyllis Jones stuck out her tongue. It was a bit of a shame to throw it away; that invitation could sell for at least ten thousand dollars.
"Will Smith really likes the script for the pursuit of happyness. Not only will he star, but he's also very interested in being a producer. The production department has given a budget of $55 million!"
"Will Smith as a producer, that's fine!" Charles indeed didn't have time to focus on the front line right now.
"Will Smith's upfront acting fee is $14 million, plus a break-even clause of $6 million, totaling $20 million!"
Charles nodded. The upfront acting fee was included in the production budget, while the subsequent break-even clause needed to be fulfilled after the film's release. He would get it as long as the performance wasn't too bad.
the pursuit of happyness was positioned as an inspirational film, and a $55 million budget was quite a lot, as it wasn't a commercial film. Will Smith also received a total of $20 million in acting fees.
"brokeback mountain made $85 million in North America and $95 million overseas, totaling $180 million globally!" Phyllis Jones reminded him again, her voice filled with excitement.
brokeback mountain was distributed by Focus Features, and their commission rate was 12%, so Focus Features directly took $21.6 million!
From North America's $85 million, after deducting the 49% negotiated with theaters and the 12% distribution commission, Capet Pictures still had $33 million. Focus Features spent $8 million on distribution and marketing, leaving Capet Pictures with a profit of $25 million.
In the overseas market, Capet Pictures received a net profit of $22 million, which was about 23% of the overseas box office.
Charles carefully reviewed the financial statement. Didn't Focus Features directly hand over many overseas territories to Universal's international distribution company, UIP?
Many regions in overseas distribution have local partners assisting, and international distributors can generally get around 40%-45% of the box office, which is about 10 percentage points lower than North America.
Even after deducting distribution commissions, exchange rate fluctuations, and other expenses, shouldn't the producer get no less than 30% of the share? And overseas marketing expenses are also less; the total is not as much as the promotion expenses in the North America market.
After all, the United States is the largest film market and the leading film base. With North America doing well, many brands in overseas distribution willingly join in to bear promotion costs and promote their own brands through film publicity.
"Focus Features is not being honest. There's something fishy about the $8 million they spent in North America, and overseas, the producer didn't even get 25% of the box office!" Charles pouted. The overseas expenses were too alarming, but thankfully, this was his last film contract with Focus Features.
"Overseas promotion, film festival public relations..." Charles put down the various expense reports directly after looking at them. However, for the overseas DVD, TV, and later VOD online on-demand operations of this film, Charles would have to have a good talk with Universal.
Phyllis Jones stood aside silently. The deeper she delved, the more shocking the accounts of Hollywood film companies became.
Currently, Capet Pictures' box office revenue was $47 million, but Capet Pictures' initial development of brokeback mountain, being an art film, had very low director and actress salaries.
Therefore, they signed a global box office profit-sharing agreement, with a production budget of $15 million plus $2 million for public relations and promotion.
The net box office profit was $30 million, and the main creators received 25%, totaling $7.5 million in post-release revenue.
Of course, it wouldn't be difficult for Capet Pictures to make brokeback mountain appear to be a loss. They could just inflate public relations and promotion fees, various interest charges, legal fees, marketing taxes, and other expenses.
After all, each film establishes a corresponding operating company, and Capet Pictures also charges interest when injecting funds into this operating company!
However, there was no need, as the success of brokeback mountain was inseparable from them. Ang Lee was already an Oscar best director, and the other main actors also received Oscar acting nominations.
Capet Pictures invested $15 million last year to shoot brokeback mountain, and this year, it recouped nearly $40 million from the box office.
Of course, it could have been higher; at least Focus Features' distribution had significant issues. However, Capet Pictures could now distribute films in North America independently, though it still had to give up a portion of overseas profits.
brokeback mountain, a film with a production cost of $15 million, grossed $180 million worldwide, but Capet Pictures' net profit from the box office was only over $20 million.
However, brokeback mountain's true major income would come from the later DVD market, TV licensing, and subsequent VOD online on-demand revenue.