Welcome to Going Bionic #231. Today we’re discussing the $12.5 million dollar sale of Chris Rock’s Top Five to Paramount at the Toronto International Film Festival. Toronto has a long history of premiering commercially successful, Oscar-winning gems, like Chariots of Fire, The Bill Chill, Sideways, The King’s Speech and Argo, but the highly coveted festival has yet to yield a no-brainer acquisition this year. In fact, only a few notable acquisitions have even been made thus far, and the “wow factor” has yet to be a factor at any premiere. Yes, this includes Chris Rock’s film. While such a situation may signal doom for indie film values for the foreseeable future, it signals a trend that you should be aware of. So without further do, here are three key things that the Top Five acquisition tells us.
Getting Distribution and a P&A Guarantee Is The New Goal
The days when a indie film made for $1-$2 million or less could premiere at Sundance, Toronto or Telluride and sell for $5-$10 million are virtually gone. These days, getting a studio to break your investment even and guarantee you a suitable prints and advertising (P&A) budget, is considered to be a slam-dunk. Top Five sold for $12.5 million and nabbed $20 million more in a P&A (prints and advertising) commitment from Paramount. Thus, the studio is spending $32.5 million on an indie – which is a big risk – even with a widely liked, household name like Chris Rock attached. Since studios only receive about 47% of box office receipts, because the exhibitors (theaters) hold onto about 53% of box office income. Thus, Paramount has to hope that Chris Rock’s indie film makes about $70 million at the box office, (which isn’t easy), just to reach break even. Of course, there will be DVD, online and cable sales to help justify the investment, but those sales are largely dictated by how well the film does theatrically.
Reported Budgets Often Swell Or Deflate As Needed, Even In The Case Of Projects From Known Actors
Top Five reported two different budgets since it’s premiere in Toronto last Saturday, which raised my eyebrow. Here’s why:
One published account from Variety reported the film’s budget to be “north of $10 million,” while another Variety article cited the Chris Rock laugher to have a $6 million dollar budget. Why the discrepancy? The producers and Chris Rock may have touted the “north of $10 million” budget when they were premiering the film, so they could alert prospective buyers of how much it would cost them to acquire the film. As a general rule, the more money studios think your film cost to make, the more they’ll offer you for the film’s rights.
After the picture sold to Paramount for $12.5 million, plus $20 million more in P&A, team Top Five started saying it cost $6 million to make. The reason for decreasing the reported budget is probably so the filmmakers can increase their media and social attention by announcing the picture sold for twice its budget. Everyone loves a success story, right?
The above theory is what I believe most likely happened, but the budget discrepancy could be a misunderstanding. I doubt that’s the case, but it is a possibility. Furthermore, “north of $10 million” is a fairly vague number, so it’s also possible Top Five had a budget of a lot more than $10 million. Should this be the case, Paramount’s $12.5 million dollar acquisition of the picture may have not even brought the film to break-even.
Star Power Remains Essential
Just ask Paramount, because it took a broad comedy star like Chris Rock to get them to cut an sizable acquisitions check and guarantee a healthy P&A budget for an indie film. Interestingly, even then Paramount were reportedly concerned the picture will have a limited appeal internationally. In other words, Paramount is banking on Top Five to do well enough domestically to justify the film’s acquisition and distribution cost. While that may seem like a crazy roll of the dice, it certainly isn’t when considering the amount of goodwill the studio will get from Chris Rock. If there’s one thing studios know how to do, it’s keeping their biggest and brightest stars happy. So, since Chris Rock is a a key player in the success of the Paramount/Dreamworks’ Madagascar series of films – which have collectively earned about $2 billion theatrically worldwide – acquiring his indie film at one of the world’s most prestigious film festivals is a no-brainer in its own light.
While I know how bad today’s information makes the current state of indie film distribution look, I’d rather you be armed with it than not, so you can utilize it to your benefit. On that note, I’d like to thank you for lending me your eyes, and I look forward to borrowing them again next Tuesday. Until then, have a great week! I can be followed on Twitter @Lonelyseal.