How did an Angolan multimillionaire end up taking a bath at the box office with the Ed Harris submarine thriller "Phantom"?
It’s a long story.
Rui Costa Reis, chairman of independent production company RCR Media Group, is a relative newcomer to Hollywood. But he has jumped into the deep end of the movie business by fully financing and distributing the $18 million thriller, “Phantom,” starring Harris and David Duchovny, from his own pocket.
In the film, Harris and Duchovny play Russians aboard a Soviet submarine who go rogue at a moment of heightened Cold War tensions.
Also read: 'Phantom' Review: Capable Cast Can't Keep This Sub Tale From Scuttling
"Phantom" opened on March 1 and took in $754,210 from 1,118 locations over the three days, a painful $675 per-screen average. The movie dropped 88 percent in its second weekend, taking in just $60,000 on 407 screens. That was $150 per screen and a total take so far of $815,000. By comparison, the week's leading movie, “Oz the Great and Powerful,” took in $79 million from 3,912 theaters. The only other film on a comparable number of screens was “Lincoln,” which was on 432 screens and brought in $430,308 – in its 18th week of release.
The opening comes close to rivaling the biggest box-office flop in recent memory, the toddler-focused “Oogieloves in the Big Balloon Adventure” which last year bombed on opening weekend with a $443,000 take on 2,160 screens, and then eked its way to $1 million total box office.
But in an exclusive interview with TheWrap, Costa Reis said he was satisfied with the theatrical opening because it would allow him to make better deals for international release and home entertainment revenue.
See Video: Rui Costa Reis Explains 'Phantom' and His Movie Strategy
“My expectation is that this movie will be profitable,” he said, noting that he prefers to keep RCR below the radar. “The income from the theatrical release is not the most important thing in the world. Our target market is waiting to see this movie on VOD.” (The target market, he said, is men over 35.)
Just as important, he said, is the learning experience for a first-time distributor. In a marketing campaign that he estimated at just more than $10 million, Costa Reis got involved in every aspect, negotiating for billboards, TV spots and buses, and driving all over California to get to know industry vendors.
He held a splashy premiere at the landmark TCL Chinese Theater, and got Duchovny on Jay Leno’s late-night couch.
For the campaign, Costa Reis bought “100 percent” of the bus advertising in Miami, a city he considered key for a movie with a submarine theme. He also bought large numbers of billboards in New York and Los Angeles, including a splashy ad that covered the side of a building on Sunset and La Cienega boulevards (right).
“I drove over 1,000 miles to visit Technicolor, CBS, Clear Channel — everybody,” he said. “I wanted to feel the marketplace first.”
But a week before the opening, theater chains cut back his screens from 2,000 to 1,100, to make way for some of the Oscar-winning movies (The Academy Awards were held the Sunday before the film's release). Overall, the opening weekend was dismal for the entire box office, which was down by 35% year over year.
So who is Rui Costa Reis, and what is his plan for the movie business? The West African mogul — who demurred when asked if he is a billionaire — allowed that he has plenty of money from his previous businesses in real estate and port services. He was born and raised in Angola, and now lives in its capital, Luanda, when he is not in Hollywood releasing his movies.
Encouraged by his adolescent sons who wanted to move to the U.S., Costa Reis said he looked for a business to start in this country. (His son Ricardo, 21, is listed as an executive producer on "Phantom.")
“Against the opinion of everybody, for me the most profitable business in the United States is the movies,” he said.
He made a co-financing deal with Sony, investing about $50 million in 10 straight-to-DVD movies over two years. The next step was to make and distribute his own movies. So he dug deeper to sink about $25 million total in “Phantom,” which was at first slated to be a straight-to-DVD release. And he has invested in building a distribution network, offering those services to finished movies for a relatively low five percent fee.
Update: An executive who worked on "Phantom" disputed that the budget was $18 million, a sum that Costa Reis declined to confirm or deny in the interview. The executive said the movie actually cost $3 million, but that RCR wanted the public number to be higher to help goose prices for international distribution. "RCR wanted it to sound like their movie was bigger than it was, and that would help them get bigger international deals," said the executive. RCR had no immediate comment.
“Phantom,” though expensive, is just the start of where RCR plans to go.
In September, the company will be distributing a found footage, sci-fi movie called “Project Bluebook” or possibly “Brown Mountain.” The movie is produced by Mike Fleiss and Lawrence Bender, and is directed by Matty Beckerman, a young producer who was previously best known for getting financing from Moammar Gaddafi’s son, Saadi.
Also read: How Matty Met Saadi — and Got Him to Invest in Movies
RCR will put up $10 million to $15 million in prints and advertising for this movie and will aim to open it in 2,000 theaters. "We want to be hands on, especially the first time around,” RCR CEO Eliad Josephson, a former wealth manager on Wall Street for Merrill Lynch, said.
And the mogul has been hosting roaring parties at the Beverly Hills mansion on Loma Linda Drive — including a blow-out Halloween bash — that he bought as his non-permanent home in the United States.
So how much is Costa willing to invest in the movie business before he sees a return?
“Enough to make a reality the projects we are working on,” he said with a smile.
Here is Costa Reis interviewed by Wrap editor Sharon Waxman: