“The other reason we front-load the marketing is because the amount you make is dependent on the box office. And, if the audience hates the film, we at least pack them in before word of mouth gets out that we have a dog. Even if a movie bombs, a strong opening weekend can be enough to break even or earn a small profit,” Brenda said.
That brought a chuckle from the crowd.
“We have a recent example of this. Hulk grossed 47 percent of its total earnings in its opening weekend, then made almost seventy percent less the following weekend.
“Our rule of thumb is the marketing budget should be fifty percent of the production budget. So, for simple math, if it cost $50 million to make a film, we spend $25 million marketing it. For this film, because the production costs were so low, I suggest we match the production budget for the marketing,” Brenda said.
As she gave us her spiel, they handed out a proposed budget. I found it interesting to see the proposed allocation:
Network Television: 22%
Marketing Services (Creative Services, Market Research, Promotion/Publicity): 21%
Targeted Local TV Stations: 14%
Newspaper: 10%
Internet: 4%
Theatrical Trailers: 4%
Other Media (Cable TV, Radio, Print, Billboards): 25%
Rita pointed out that the Marketing Services line item was for the studio’s internal department responsible for designing and implementing the marketing plan.
“The movie business is seasonal. We cluster releases during the summer and around the major holidays of Christmas, Thanksgiving, Fourth of July, Memorial Day, and Labor Day. We need to figure out the best time to release Love Letters,” Brenda said.
What followed was a debate on whether the film would stand out in a field of high-profile movies that traditionally were shown those times of the year. You were fighting for a finite dollar amount that would be split between all films. If we were head-to-head with a blockbuster, we might get crushed and end up losing money. They finally decided to release it the third weekend of June.
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After the presentation, we walked to another building where the studio executives had their offices.
“We have one last item to talk about,” Paul said.
“He wants money,” Rita predicted.
“We can go one of two ways. Now that there’s an almost-finished product, we can reach out to additional investors and give them a smaller piece of the pie. Or, you can pony up the funds needed to market the film,” Paul said to get to the point.
He showed Rita and me how much he needed. It wasn’t an insignificant amount.
“Why not get a bank loan?” I asked.
Paul was prepared for my question; he had numbers for that as well. The problem was that if the film went belly-up, banks still needed to be paid back, while investors assumed the risk. For them, a movie at this stage presented a much smaller risk than up front, but you never knew. The bank option was cheaper because of the loan guarantee, so they didn’t demand as large a return as the investors did.
“When do you need to know?” I asked.
Paul smiled.
“I’d hoped you would just write a check today.”
“I bet you did,” Rita said.
“Sorry, but I’m out of my depth on all this,” I admitted. “I need to get advice before I decide what I should do.”
Paul started to go into sales mode, but Rita cut him off and kicked him out of his office so we could talk.
“Tell me what you really think of the movie, now that you’ve seen it?” Rita asked.
“It’s okay. It’s not nearly as funny as Bridesmaids or as sappy as The Notebook. I would compare it to Silver Linings Playbook.”
“You do realize that was one of the top recent romantic comedies?” Rita asked.
“How much did it make?”
“About $125 million.”
“Okay, slow down. How much does one of these usually make?” I asked.
“Last year, $27 million was average. The year before that only averaged $10 million.”
“I guess it’s a good thing I didn’t take any pay,” I quipped.
Rita chuckled. She had a good idea of what I was being paid for my next three films. While I wasn’t a twenty-million-dollar man yet, I would command more than was reasonable for a romantic comedy. I might end up being an action star moving forward if the pay was that different.
“It sounds like they’ll be lucky to break even with the proposed budget they have right now. Can we get them to cut back on that and still make money?” I asked.
“The reason Paul has us in here is we own more than the studio does on this one. He has to get our sign-off to move forward,” Rita educated me.
“That shit,” came out before my brain engaged, and then I eyed Rita. “When were you going to clue me in?”
“If this ran off the rails, I would have stopped it. I wanted you to experience for yourself what studios try to do to investors or actors who are working for a percentage of the gross profit. Their goal is to spend as much as they make on paper. That way, they don’t have to pay any profits.”
“What do we do?” I asked.
“Do you trust me to make you money?” Rita asked.
“I don’t know. Should I?”
“Yes. Yes, you should,” Rita said.
“Okay. Do your thing,” I said.
She called Paul in and lowered the boom on him. He’d hoped I thought that a romantic comedy made numbers similar to an action movie. I’m not sure what kind of game he was playing with Rita, but she soon reminded him she wasn’t some babe in the woods.
This situation highlighted the fact that in business, other people were usually not looking out for your best interests. If Paul could have gotten me to put money into marketing the movie, he wouldn’t have hesitated.
Then I threw a monkey wrench into everything. I innocently asked if it might be better to release it next year after my James Bond movie came out and before my Star Academy feature. They said they would have to get back to us on that.
What frustrated me, once we were done, was that Paul didn’t even seem apologetic for trying to dupe us.
Once we got outside, I turned to Rita.
“Thank you,” I said sincerely. “There’s no way I could have done that without your help. I don’t say it often enough, but I do appreciate all the time you’ve spent working with me. I hope we can continue in the future.”
“Don’t worry; I plan on it.”
I started to walk away but stopped myself.
“Did I really work for free?” I asked.
She laughed.
“No. I had it written into the contract with the studio that you would defer your pay until the movie opened. It’s set up so that you get paid first, and your portion is guaranteed. I did that so we could get Paul’s studio to take us on. They wanted someone like you to put on the marquee to help sell the movie, but we needed to do it on the cheap,” she explained.
I felt better about that and thanked her again.
As I got into the car, I realized Rita had known I would take the role of the best friend before I was even asked. Adults were evil. At least it had all worked out this time.
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I convinced Lexi and Chuck to go surfing for the rest of the afternoon. The rush I got from catching and riding a good wave was exhilarating and relaxing at the same time. I needed more afternoons like this.
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Chapter 22 – Poker? I Hardly Know Her! Saturday April 15