Mike Fleming

Gravity Iron Man 3 ProfitThe final eight films in Deadline’s Most Valuable Blockbuster movie tournament face off today. This is the first of our quarterfinal matchups and for the first time we reveal our numbers behind the numbers that show just how profitable a movie really is.

DeadlineBracket_2ndRound

Iron-Man-GravityThe Matchup: The top grossing film of 2013, Iron Man 3, opened the tournament by squeaking past The Conjuring, a low-cost movie with no gross outlay that ranks among the highest profit ratio films of the year. Iron Man 3 advanced anyway, and faces off against Gravity, the great anomaly of 2013, a film that most studios would not have made. Gravity made it out of the first round by besting #9 seed Man Of Steel.

The Box Score: Here is how the films stack up against one another, in revenues (some of which have been projected by our experts in ancillary categories), and then costs.

The Bottom Line: Gravity is a remarkable achievement. Consider that its $56 million domestic opening gross was the best ever for an October release. And while moviegoers often regard 3D — especially those shot in 2D and converted after the fact — to be a gimmick designed to dig deeper into their pockets for higher movie ticket prices, they recognized that Gravity was an exception. cuaron_gravityIt really did follow in the steps of Avatar and Life Of Pi as a remarkably immersive technique that made for an unforgettable movie experience, and as a result, 80% of its opening weekend gross came from 3D ticket sales. That is the highest percentage ever for a film debuting over $50 million. It turned in the sixth-highest domestic gross of the year, and if you think this was predictable, consider that every studio passed on it after Universal let it go, and none of Warner Bros’ co-financing partners wanted to touch it. It was the eighth-highest-grossing film in global revenue. The film cost half of Iron Man 3’s $200 million budget, and $139 million for global box office for the year. Each film had a star take $75 million in gross payout, with Robert Downey Jr and Sandra Bullock.

From a cost-to-profit ratio, Gravity stacks up favorably. Iron Man 3 generated $1.03 billion in gross revenue to Disney/Marvel, through all media (theatrical, home video, television and merchandising), and made $391.8 million in profit to Disney and Marvel. By comparison, Gravity had total gross revenues of $622.8 million, and created $209.2 million in profit to Warner Bros and late arriving co-financing partner RatPac Entertainment. In the category of Total Cash On Cash Return, Gravity hits 1.51, while Iron Man 3 hits 1.62.

The Winner: The dark horse of this tournament ends its run here. Gravity’s success has higher meaning for the industry. In an era where concepts rule over star power and director vision, this is a sober reminder that sometimes, it’s wise to bet on a visionary director like Alfonso Cuaron — if you believe in the filmmaker (has he made a bad movie ever?) when he has a burning vision that won’t fit an acceptable risk profile. It is telling that while new TriStar chief Tom Rothman walked out of the theater after seeing Gravity he decided he had to make the immersive 3D film The Walk with Robert Zemeckis, with iron man 3Joe Gordon-Levitt to play French aerial artist Philippe Petit as he crossed between the Twin Towers on a wire in 1974. Gravity reminded a lot of chastened studio executives of the creative ambition of films that made them pursue this business, and hopefully it will embolden a few of them.

Despite all this, Gravity pays a big price in the criteria of this tournament by being a one-off. Studios are all about building franchises, and on that count, Iron Man 3 is impossible to beat by a one-and-done film. Beyond its outsized gross, the film will generate an estimated $40 million in merchandising, which was double the performance of the first film. And while it is unclear whether Downey will star in another film, this film serves Marvel’s most valuable franchise, The Avengers. Winner: Iron Man 3.

SWEET 16 RESULTS

#1 ‘Iron Man 3′ Vs. #16 ‘The Conjuring’
#2 ‘Frozen’ Vs. #15 ‘The Great Gatsby’
#3 ‘Despicable Me 2′ Vs. #14 Star Trek Into Darkness’
#4 ‘Hobbit: Desolation Of Smaug’ Vs. #13 ‘Oz The Great And Powerful’
#5 ‘The Hunger Games: Catching Fire’ Vs. #12 ‘World War Z’
#6 ‘Fast & Furious 6′ Vs. #11 ‘The Croods’
#7 ‘Monsters University’ Vs. #10 ‘Thor: The Dark World’
#8 ‘Gravity’ Vs. #9 ‘Man Of Steel’

For more estimates listed by title, see box office results here...