Chapter 503: The Christmas Box Office

[Chapter 503: The Christmas Box Office]

After spending a month in New York with two women, Eric finally returned to Los Angeles just before Christmas. The Christmas season was one of the most important times of the year for film releases, second only to the summer blockbuster period. Most films planned for the Christmas box office were set to premiere during the weeks of December 18 and December 25.

Firefly Films had positioned their final release of 1992, Ace Ventura: Pet Detective, for December 18. Unfortunately, Jim Carrey and TG Films had been unable to come to terms on their next film's salary. At the beginning of December, Carrey publicly expressed his outrage to the entertainment media regarding being "duped" into signing the option contract, stating he had no intention of attending the premiere of Ace Ventura: Pet Detective.

Just days before the premiere, after long and drawn-out negotiations, Jim Carrey finally signed another film deal for $11 million with Firefly Films. As a result, audiences saw his familiar face at the premiere on December 17.

Hollywood stars often agreed to work for little to no pay for directors or producers who had helped them early in their careers. However, they frequently clashed with the production companies that had discovered them, leading to messy disputes over salaries. This had become a customary trend in Hollywood, which Eric was accustomed to by now.

...

Aside from Ace Ventura: Pet Detective, Warner Bros. released The Bodyguard and Columbia Pictures and Firefly Films collaborated on Mr. & Mrs. Smith on the same date.

Though Eric did not attend the premiere of Ace Ventura: Pet Detective, he eventually showed up at Mr. & Mrs. Smith premiere after Peter Guber's persistent invitations and Nicole's gentle entreaties.

According to the initial agreement, the five films that Firefly Films had partnered on with Columbia would have North American distribution rights go to Columbia, while Firefly Films handled overseas distribution. This arrangement was designed to mitigate the effects of the private pact between Eric and Peter Guber. Columbia's international distribution network had begun to fragment, and if they managed overseas distribution, Mr. & Mrs. Smith's international box office could drop to half of what was originally anticipated.

Because of their confidence in Mr. & Mrs. Smith, Columbia invested nearly all their resources into the film, arranging for more than 2,800 screens during its first week. Once this number became public, most media outlets speculated that Columbia's overly ambitious release strategy could lead to a significant downturn in ticket sales the following week. However, after three days of screenings over the opening weekend, Mr. & Mrs. Smith raked in an astonishing $39 million. Projections suggested that the opening week could touch the $60 million production budget -- a feat typically seen with summer blockbusters, shaking the industry to its core.

With this success, the majority of the media that had previously criticized Columbia's promotional tactics started to change their tune, taking the time to analyze the reasons behind Mr. & Mrs. Smith's achievements. Aside from the scale of the premiere, the film's use of the martial arts, which was distinct from prior North American action films, became the focal point for praise.

...

After the opening weekend numbers were released, John Woo received numerous collaboration offers from various film projects and countless media interview requests in just a few days.

Despite having signed with Firefly Films, John Woo felt tempted by the sizable directing fees and revenue sharing offered by other companies but wisely refrained from private meetings with outsiders and had no intention of tearing up his contract with Firefly Films. He relished the media interviews, discussing his views on action aesthetics and Eastern martial arts, even flying back to Hong Kong to participate in a TVB special interview, basking in the glow of newfound fame.

In his last life, the first major collaboration between Eastern martial arts elements and Hollywood commercial cinema was with The Matrix, which grossed over $450 million globally, catapulting kung fu into a popular craze within Hollywood. Earlier kung fu films predominantly starred Eastern martial arts talents and could not truly be classified as genuine Hollywood productions.

Now, with the triumph of Mr. & Mrs. Smith, Hollywood began to pay attention to Hong Kong cinema, which was in the midst of its final booming period. Since John Woo had a contract with Firefly, other major studios understood they couldn't lure him away from Eric. Instead, they turned their sights toward other top directors in Hong Kong. 

...

Although Mr. & Mrs. Smith saw a box office dip exceeding 40% in its second week, it still earned $36 million, easily surpassing $100 million within just two weeks of its release. The film became the biggest sleeper hit of the 1992 Christmas season, with predictions that its total gross could potentially exceed $200 million. Both Firefly and Columbia would definitely recoup their advertising and distribution costs in North America and enjoy pure profits from their subsequent releases -- a remarkable feat for Sony following their acquisition of Columbia.

Peter Guber had previously harbored complaints about their collaboration with Firefly not being a special effects blockbuster, but now he felt elated. Even though Columbia would only net 40% of the profits from the original revenue-sharing agreement, it still amounted to more than the profits from most films Columbia had released in the past two years. If the next four films in their three-year collaboration with Firefly managed similar results, Peter felt secure in his position as CEO of Columbia.

Aside from Mr. & Mrs. Smith, Firefly's Ace Ventura: Pet Detective and Eric's credit as executive producer on The Bodyguard also performed well. While neither achieved the soaring numbers of Mr. & Mrs. Smith, both films crossed the $50 million mark within two weeks.

...

Apart from Firefly, Warner Bros., and Columbia, the performance of the other major four studios during the year-end holiday season was underwhelming, with MGM suffering the worst. They had failed to produce a single film in an entire year, merely serving as a distribution agent for smaller companies. The total box office revenue for all films released by MGM in 1992 was barely $100 million, marking a significant decline.

In December, due to Italian investor Giancarlo Parretti's fraud case, MGM was publicly auctioned by French banks, and no bids had yet been finalized. Although Eric was somewhat intrigued by MGM's vast film library, he refrained from making an offer to accumulate more funds for more promising investments.

Fox had initially intended to acquire the rights to continue the Home Alone series from Firefly Films. However, the previous installment had been successful, but the young lead, Stuart Ronkel, growing up made it difficult for the company to continue featuring him. It was also the highest-risk phase for the franchise, and Fox offered only 50% of last year's price while hoping for ancillary revenue from the series. Ultimately, negotiations fell through, and due to various considerations, the Home Alone series was effectively shelved, leaving Fox's own comedy films performing mediocre at best.

Paramount's Martin Davis was too preoccupied with potential acquisitions by Viacom or QVC to focus on film production, resulting in a lack of new releases.

Universal fared slightly better under Michael Eisner's leadership, implementing a low-budget, high-volume strategy at year-end. While other studios released one or two films, Universal released six films, each opening on approximately 1,000 screens. They adjusted their strategy based on performance. Industry insiders recognized that Eisner's approach was out of necessity; his brief tenure at Universal left no time to greenlight long-cycle, big-budget films. To improve Universal's business situation and boost investor confidence, Eisner devised this strategy.

Aside from Schindler's List, the other five films were comedies or dramas with budgets under $20 million. Although their box office results were not stellar, during the two months surrounding Thanksgiving and Christmas, including Schindler's List, the six films collectively grossed over $200 million. Thus, reaching an additional $100 million around the holidays would not pose a problem, leading to significant profit potential.

Simultaneously, Schindler's List had undoubtedly become a frontrunner for the Oscars.

As a film depicting the Holocaust during WWII, focusing on the Jewish people, media coverage was remarkably cautious. Negative reports regarding Schindler's List were nearly non-existent in print and on television. Of course, not all voices were silent; some Jewish groups raised concerns that Spielberg's film, while attempting to recreate historical events, lacked realism and depth regarding the atrocities. Meanwhile, some Jewish critics argued that the best way to handle the Holocaust would be silence rather than perpetuating victimhood, stating that could sow the seeds for future conflict and hatred.

Regardless of external attitudes, once the film had been in theaters for several weeks and had substantial Jewish support, its box office quickly surpassed $40 million. Universal initially believed this would be a project destined to incur losses, but the surprising results encouraged Michael Eisner to intensify his efforts to cultivate a partnership with Spielberg.

...

Having spent Christmas with Drew and Nicole at the Liberty City estate, Eric anticipated that these celebrations would wrap up the year in a lively atmosphere. Little did he know, the final box office figures for Hollywood would soon capture everyone's attention once again.

While many films remained in theaters, predictions for total box office figures were becoming increasingly accurate, as they relied on early reviews and trends. Consequently, as the last days of the year approached, both professional and amateur magazines began reviewing and summarizing the films of 1992, with a particular focus on annual box office and total revenue for major studios.

The results, released by various magazines, stunned insiders and outsiders alike.

With a lineup of six films exceeding $100 million each -- Twister, Sister Act, The Mask, Aladdin, Speed, and Ace Ventura: Pet Detective -- along with 17 other films released by Disney, New Line, and other labels throughout the year, Firefly Films grossed a staggering $1.53 billion, far outpacing Time Warner's $840 million total. Firefly Films commanded 27% of North America's total box office revenue of $5.5 billion for 1992.

Although some magazines raised objections, arguing that The Mask and Ace Ventura: Pet Detective should fall under TG Films', records indicated Firefly's performance still vastly outstripped Time Warner's. Moreover, anyone familiar with Hollywood could recognize that the TG Films functioned essentially as a subsidiary of Firefly Films. Some took the position that if evaluating by investment rather than distribution, a large portion of Mr. & Mrs. Smith's box office revenue should also be attributed to Firefly Films, making it clear that most media outlets sided with the $1.53 billion figure.

A market share of 27% was a remarkable statistic that had not been seen in Hollywood for many years. The Hollywood Reporter conducted an analysis demonstrating that Firefly's production and operational budget hovered around $800 million. After taxes, Firefly was projected to earn over $400 million in pure profits from North American box office receipts alone. Additionally, their overseas box office receipts were nearly on par.

Following Disney's acquisition, Firefly Films had developed a robust entertainment industry chain. In addition to standard revenue from domestic and international box office, Firefly was poised to earn substantial profits from video cassette distributions, television broadcast rights, and exclusive licensing deals. Furthermore, they owned several Disney parks as well as specialty stores across major cities in the U.S. and Europe, generating substantial revenues.

It could be said that Firefly's total annual revenue would far exceed the $1.53 billion figure.

However, unfortunately for the public, Firefly Films had not gone public and was not obligated to share its financial reports, leaving Eric and the core leadership team as the only ones fully aware of Firefly's actual revenue and profit margins.

*****

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