Topic: MGM Files for Bankruptcy

[DJ Doena]

http://online.wsj.com/article/SB10001424052748703506904575592200573445526.html

[Najemikon]

Sad and ridiculous in all sorts of ways...

[Achim]

They've been struggling for several months already, trying to find a way out of their misery.

Sad/bad news for all employees, of course.


Now the news I hesard this morning, mentionoing Warner Bros. having troubles (solved now) regarding the production of The Hobbit makes more sense now.

Bad news for all James Bond fans...?

[Dragonfire]

I knew MGM had been having a lot of money problems for a while. 
It is too bad.  MGM made a lot of great movies.  Though I know they haven't had many profitable movies in recent years.

[Jimmy]

Is it really a surprise when you spend hundred of millions doing shit and pay 10+ millions/movies for actors/actresses who can't act to save their life...

Maybe it's the end of the studio monopole system wich can't be a bad thing for anyone who like watching movies and not be feed cake with a nice looking creaming but with no taste. The best period in the movie industry was when the majors were struggling in the seventies so it's a good news...

[Achim]

Is it really a surprise when you spend hundred of millions doing shit and pay 10+ millions/movies for actors/actresses who can't act to save their life...

This can't be the problem. Michael Bay makes a lot of money this way...


But generally I agree. Not sure if MGM themselves are guilty of many big failures like that (which movies specifically...?). But in general it seems to be problem still that the studios churn out a lot of shit like you say because.....


people still go see it! Why do we get Transformers 3? Because too many people made Transformers 2 a success (I am guilty as charge, I apologize).

[Critter]

people still go see it! Why do we get Transformers 3? Because too many people made Transformers 2 a success (I am guilty as charge, I apologize).

I am also guilty of this , please accept my apologies.

[Jimmy]

[This can't be the problem. Michael Bay makes a lot of money this way...

Bad Boys (1995) $65,637,842 on a budget $10,000,000 this film did 6.66 times its budget.
The Rock (1996) $134,006,721 on a budget $70,000,000 this film did 1.91 times its budget.
Armageddon (1998) $201,573,391 on a budget $135,000,000 this film did 1.49 times its budget.
Pearl Harbor (2001) $198,539,855 on a budget $140,000,000 this film did 1.42 times its budget.
Bad Boys II (2003) $138,396,624 on a budget $130,000,000 this film did 1.06 times its budget.
The Island (2005) $35,799,026 on a budget $122,000,000 this film did loss 3.41 times its budget.
Transformers (2007) $319,014,499 on a budget $151,000,000 this film did 2.11 times its budget.
Transformers: Revenge of the Fallen (2009) $402,076,689 on a budget $200,000,000 this film did 2.01 times its budget.

In Hollywood term none of those film with one exception are huge success and if you count the marketing and the % of the profit given to the actors/actresses or principal talent (director/writer/etc) wich is an unknown quantity I'm sure that not only The Island had loose money.

BTW do you see that his most profitable is the one with the smaller budget
Wich kind of prove my point that it makes no sense for the studios to spend 100 of millions on a single movie.

[Kathy]

You don't declare bankruptcy from making a profit so Michael Bay is not the problem. I would be happy if my investments brought this type of return!

[Mustrum_Ridcully]

In Hollywood term none of those film with one exception are huge success and if you count the marketing and the % of the profit given to the actors/actresses or principal talent (director/writer/etc) wich is an unknown quantity I'm sure that not only The Island had loose money.

These numbers only seem to take into account the gross made in USA
Since a considerable amount of the gross is made outside of the USA and not to forget by Home-Media (DVD, BluRay, UMD, VOD), I'm quite sure that none on your list (except "The Island", of course) actually lost money. Whether they brought the expectable return on investment is a completely different question.

But if I interpret this chart correctly, then Bad Boys II (DVD Release in the US on Dec. 9th 2003) sold in the remains of 2003 4.85 million copies and made an additional gross of 84.7 million US-$ (until 2005), and this was only USA, not worldwide DVD sales.

[Jimmy]

These numbers only seem to take into account the gross made in USA

Wich is normal. The studio don't make any money on the international box-office. They sell the right to a distributor, so those numbers are irrelevent. Maybe the Canada isn't consider a foreign market (I'm not certain), so just 10% to the box-office number. BTW the box-office numbers are the total entries, so the number are less than that for the studio since the theatres own a share of this (maybe it's more or less, but we can suppose this share is at least 30%). So the profit range is hard to reach with a too big budget...

So if we take Transformer 2 we got for the North American market

200,000,000.00 (Budget)
281,453,682.30 (70% BO US)
 28,145,368.23 (70% BO Can)
----------------
109,599,050,53 (profit before the marketing cost, the talent share and taxes)

After that not a lot will leave from this ammount...

After you add the foreign market distribution rights sale negociated before that doesn't take count of the box office.
Finally you add the home media and TV right sales.

So the profit for a movie like that could be very little for the risk taken.



 

[Mustrum_Ridcully]

So the profit range is hard to reach with a too big budget...

Entirely correct.

But since the rights are sold to the distributors in foreign countries (and not given away for free), I assume that there was some additional money coming in.
In fact this "selling" is a great move, because it shifts the risk of success to the distributor. It's not unheard of that movies that were a big success in the USA totally failed in other markets, or the other way round (which is mostly true for movies with the general topic "Iraq").

Even though I too am guilty of buying big budget mainstream productions, I quite often wish to see some more courage in the industry. Quite often you'll find that the offbeat productions earn much more (at least per invested dollar) than the big budget flicks, and are mostly of a better quality too. There's some gruesome junk to be found too, but that's correct for the big budget productions either (but at least those look better, thanks to massive use of CGI)

[Najemikon]

Regards Bond, I read this morning they will probably be able to proceed. It makes sense in a way. While this situation was being assessed, they wouldn't be able to move in any direction. Now they've filed for bankruptcy, an administration firm will take control and it will be their job to ensure maximum profits for creditors. Therefore, MGM can go them and say, "please can we have a few pennies to give Daniel Craig?" and the administrators will think, "Bond = guaranteed profit..." and release the budget.

The future of the franchise will be fine as well because the production team (Eon?) will find a new studio.

[Blair]

Maybe it's the end of the studio monopole system wich can't be a bad thing for anyone who like watching movies and not be feed cake with a nice looking creaming but with no taste.

Most of my movies are from Colombia Pictures

[Dragonfire]

Regards Bond, I read this morning they will probably be able to proceed. It makes sense in a way. While this situation was being assessed, they wouldn't be able to move in any direction. Now they've filed for bankruptcy, an administration firm will take control and it will be their job to ensure maximum profits for creditors. Therefore, MGM can go them and say, "please can we have a few pennies to give Daniel Craig?" and the administrators will think, "Bond = guaranteed profit..." and release the budget.

The future of the franchise will be fine as well because the production team (Eon?) will find a new studio.

Will they be able to find a new studio?  I thought I had read a few months ago that they were basically stuck with MGM because of the earlier contracts..and if MGM went under, the franchise might be over.