Box office expanded by $100 million, but studio still had “Killers” and Icahn as crosses to bear
Second in a series of studio report cards from TheWrap; also included:
Its "Saw" franchise finally ran out of teeth, but the indie studio had a hit with the Stallone action movie "The Expendables," while the low-budget horror film "The Last Exorcism" was wildly profitable.
In a year of boardroom battles, Lionsgate’s film division quietly pulled off an impressive year at the domestic box office.
Propelled by low- to mid-budget hits such as “The Expendables” and “The Last Exorcism,” the studio, which was battered by an ongoing takeover bid from billionaire Carl Icahn, the company's largest shareholder, added a $100 million to its annual haul.
That saw Lionsgate ending the year with $508 million total at the domestic box office, an impressive rebound from the $404 million the studio banked last year off roughly the same number of films.
“There were a few bumps in the road, but we systematically launched movies that could become new franchises and freshen our brand,” Joe Drake, Lionsgate’s Motion Picture Group president and co-chief operating officer, told TheWrap.
There were also lessons to be gleaned. When Lionsgate sticks to the cost-effective horror and action films that have historically been its bread and butter, it doesn't miss.
But when it strays from that formula, such as with the costly action comedy “Killers,” which opened with a whimper, Lionsgate rarely makes a killing.
“I personally embrace the idea that everybody thinks of us as a little bit alternative,” Tim Palen, Lionsgate’s co-president of theatrical marketing. “It creates opportunities for us that others don’t have.”
Liongate executives think that in a year that saw the conclusion of the studio’s lucrative “Saw” franchise, new films like retro-action flick “The Expendables” will spawn sequels and fill the void left by the departure of Jigsaw.
Not that there weren’t costly mistakes. In particular, “Killers,” a pricey summer release that boasted less-than-blue chip talents in Katherine Heigl and Ashton Kutcher, landed with a thud. The $75 million film saw the mini-major trying to play on the big studio’s turf with a June debut, but the critically maligned movie only managed to gross $47 million.
“‘Killers’ is a real outlier and I’m not sure we're going to be getting that big again,” Drake said.
Betting on a more established star with Russell Crowe’s “The Next Three Days” also proved to be a gamble not worth taking. The action film may have boasted Oscar winner Crowe and director Paul Haggis, but it only eked out a $20 million gross on a $30 million budget.
Though not a disaster, “Kick-Ass” also lands in the disappointment category. The graphic novel adaptation had fantastic buzz going into its release last spring, but its violence (much of it coming at the hands of teen actors) and grade-C superheroes prevented the studio from growing its audience beyond the fanboy set. The film, which some had been expecting to open to as much as $30 million, stumbled to just a $48 million gross overall.
“There was a lot of media buzz, and it got our hopes up that it might be bigger than we originally projected, but it will be profitable,” Drake said.
After some high-profile setbacks, Lionsgate was able to turn its box office fortunes around in dramatic fashion. The one-two punch of “The Expendables” and “The Last Exorcism” in August dealt a serious blow to Icahn’s takeover bid and a notable return to Lionsgate’s sweet spot: mid-budget genre films.
That's what allowed Lionsgate to snap up the domestic and United Kingdom rights to Sylvester Stallone’s men-on-a-mission film for $15 million and turn it into an $100 million smash.
The horror film “The Last Exorcism” was a similar low-cost, high return hit. Rights to “The Last Exorcism” were acquired for less than $1 million, with the movie racking up over $41 million at the box office. Unsurprisingly, the studio is eager to kick start production on follow ups to both films.
That’s good, because 2010 also marked the swan song of the “Saw” franchise. By using the 3D format to its advantage, Lionsgate was able to revive the blood and gore series following the underperforming “Saw VI” which only grossed $27.6 million last year. Despite competition from “Paranormal Activity 2,” “Saw 3D” carved up more than $46 million on a $20 million budget. But for now, the door is shut on Jigsaw’s chamber of horrors.
“We still think there is value for the brand, but it is time to rest it for a bit. In a few years, we’ll speak about ways to go forward, but there really are no plans to date,” Drake said.
Home entertainment continued to be an area of strength for the studio, where revenue held steady at $600 million. Holding the line is no small feat in a year that left Lionsgate’s bigger competitors battered by a double digit decline in the DVD market.
Likewise, the studio’s pay TV channel Epix will be profitable less than a year after it launched thanks largely to a $1 billion, five-year pact with Netflix that gives the subscription service streaming rights to its films.
Looking ahead, Lionsgate will focus on its core of genre films. In particular, the studio is bullish about martial arts drama “Warrior” with up-and-coming actor Tom Hardy and the Taylor Lautner action flick “Abduction.”
Just like last summer’s “The Expendables,” the studio will once again exhume an eighties action movie relic with a reboot of “Conan the Barbarian.” The sword-and-sandal epic will get an August release, hitting theaters on roughly the same date that Stallone and his crew dominated the box office last year.
Beyond just the production slate, the most promising development might be the apparent checkmate of Icahn by Lionsgate’s leadership. Icahn’s failed bid to pack the studio’s board with loyalists went down to defeat at Lionsgate’s annaul meeting last week, leaving his next moves murky.
Be warned, however. Just as Lionsgate proved with Stallone last summer, Icahn could still return.