Graham King, one of Hollywood's most fearless figures, has taken his biggest risk yet as distributor of indie films and producer of big-budget projects.
But the results of his latest foray may leave him teetering on the financial edge.
"Hugo," GK Films' latest and most ambitious project to date, is struggling at the box office despite critical acclaim. Shot at a monumental cost of around $170 million, including $70 million from GK Films, it now appears to be the latest in a series of box-office duds including "The Rum Diary," released through King's FilmDistrict, and "London Boulevard."
This weekend "Hugo" took in just $7.6 million after opening to a disappointing $15.4 million over the Thanksgiving holiday. The whimsical 3D film by Martin Scorsese about a boy in Paris had a lower take despite increasing its domestic theater engagements by 523 locations to 1,840.
“He’s a great risk-taker,” said Stuart Ford, CEO of the film company IM Global. “He has taken creative risks throughout his career. He’s taken financial risks. It's tough to bet against him.”
Also read: Scorsese's 'Hugo' Faces Tough Road to Profitability After Soft Opening
But others see King's choices as out of step with what works in today's business environment.
"Graham has upcale tastes, which is to be admired. He's an old-fashioned moviemaker, but it's a big risk as a business when it's your own money," said a prominent producer who declined to be named. "Graham's big projects may topple the ship."
King declined to be interviewed for this article as did his business partner, Texas oil baron Timothy Headington. An executive with the company said that King hopes "Hugo" will build over the holidays like "The Aviator" did in its time and ultimately be a success.
But "The Aviator," which also won great critical acclaim and was directed by Scorsese, was not profitable. (King later produced "The Departed" with Scorsese, and won Best Picture at the Oscars.)
"Hugo" is the latest in a string of money-losing projects starring A-list talent.
Debuting in late-October, King's “The Rum Diary," which starred Johnny Depp, flopped, grossing just $20.8 million worldwide on a $45 million budget.
An individual close to King said that only marketing costs will create a loss on “Rum Diary” because of the pre-sold international rights to the film.
Released Nov. 11, crime drama “London Boulevard” starring Colin Farrell and Keira Knightley has been a huge disaster. Released in two theaters by IFC, it took in only $10,484 but costs $28 million to make.
Earlier in the year, another Depp project, the animated "Rango" -- which GK Films produced but did not finance -- grossed a solid $123.3 million in the domestic market. But the quirky film's $121.9 million international performance was not big enough to render any significant profits once a production budget of $135 million and global prints and advertising costs were considered.
