EXCLUSIVE: Looks like Conan The Barbarian finally has one less foe to face. Two years and two months after the litigious Stan Lee Media sued Conan rights owners Paradox Entertainment for the rights back to the character, the 9th Circuit Court of Appeals today pretty much slew their case. And by the way, just so everyone is clear, Stan Lee has nothing to do with the company that bears his name and hasn’t for well over a decade. Having said that, after hearing arguments on October 9, Judges Kim McLane Wardlaw, Richard Tallman and Harry Pregerson all quickly and strongly agreed (read it here) with District Court Judge Stephen Wilson’s February 2012 dismissal of SLMI’s suit against Paradox, its CEO Fredrik Malmberg, Lee’s longtime now-deceased lawyer, Arthur Leiberman’s estate and others. “The ruling confirms what we have said all along: This was a meritless and frivolous lawsuit to cash in on others’ hard work. I’m glad that two courts agree,” Malmberg told me today.
Big Media 3Q Corporate Earnings Roundup: Are CEOs Really Worried About Recession? Or Just Looking For Convenient Excuse?
Three months ago, when Big Media CEOs wrapped up their 2Q earnings, they were still relentlessly upbeat about the business. Any worries about the economy? Not then. But the messages they delivered over the past few weeks, as they discussed 3Q, were different. Although they’re still optimistic — remember, they’re paid to be salesmen — now and then you could hear expressions of concern about where things are headed. It stood out when Viacom CEO Philippe Dauman noted that “ad sales growth will face some headwinds.” Other CEOs who are known for speaking bluntly warned that other shocks may bedevil the business. For example, Dish Network Chairman Charlie Ergen said that his satellite company — and others in pay TV — have to fight harder against rising programming costs because “there’s a limit to the price increases that could be passed on to consumers.” Time Warner Cable CEO Glenn Britt warned that premium channels such as HBO, Showtime and Starz “are clearly impacted by the economy as consumers try to cut back.” Either they’re genuinely worried, or they want a scapegoat to blame for things that are going bad, or may soon do so. Whatever the case, we can expect to hear a lot more about the economy when it’s time for the post-mortem on the all-important 4Q earnings.
As for industry performance matters, parents of movie studios had their usual mixed results to brag about or explain away: Time Warner benefitted from Harry Potter And The Deathly Hallows Part 2. Viacom was up on Transformers: Dark Of The Moon. And News Corp beat its chest about Rise Of The Planet Of The Apes and X-Men: First Class. But Disney’s Cars 2 was no match for last year’s Toy Story 3. Comcast’s Universal Pictures had nothing to compare to last year’s Despicable Me. Lionsgate suffered from Conan The Barbarian and Warrior. And DreamWorks Animation’s Kung Fu Panda 2 didn’t contribute as much in the quarter as Shrek Forever After did in the same period last year.
Over at the TV networks, Comcast’s NBC underperformed the Street’s already modest expectations. Execs at almost all the companies were eager to talk about the cash they expect to collect soon from political ads — as well as their favorite new ATM machines: retransmission consent deals and digital streamers including Amazon, Hulu, and Netflix. Speaking of Netflix, CEO Reed Hastings once again tried to reassure investors that he’s focused on “building back our reputation and brand strength” after his decision in July to slap a 60% price increase on customers who wanted to continue to rent DVDs and stream videos. In 3Q Netflix lost 57.7% of its market value and 800,000 subscribers. And since that customer loss was bigger than projected, Netflix shares continued to fall — they’re now down 67.3% since July 1.
Here are some other themes from the latest earnings reports:
Ad sales: They’s good, but for how long? Most television networks report that scatter prices are comfortably above the upfront market from this past summer. CBS chief Les Moonves says prices in 4Q are up by “mid-teens” on a percentage basis, while Discovery says it sees least high single digit percentages. But Disney’s Bob Iger noted that scatter prices have “slowed slightly these last few weeks.” Kurt Hall of National CineMedia — the leading seller of ads in movie theaters — was far more direct when he spoke to analysts after ratcheting down his company’s financial forecasts. “I’m sure that the broadcast and cable guys are sitting there now counting their lucky stars they got their upfront done before August,” he told analysts. “There’s a lot of uncertainty.”
The film and TV company had a net loss of $24.6M, an improvement from its $29.7M loss in the quarter last year, on revenues of $358.1M, down 21.5%. That revenue figure was far below the $421.5M that analysts expected. And the net loss, at 18 cents a share, was below the 13 cent loss the Street had forecast. The bottom line could have looked even worse: Lionsgate included the $11.0M it collected from its sale of Maple Pictures. The company also was able to add $6.1M from its 31.2% stake in EPIX vs a $19.8M loss from last year’s quarter. Lionsgate says that it suffered from “underperformance of theatrical films in the quarter” — where releases included the Conan The Barbarian remake, Warrior, and Abduction – as well as “timing of DVD releases which offset gains in the Company’s television and digital businesses.” The movie operation generated $218.9M in revenues, down 36%.
As if Conan the Barbarian didn’t have a rough enough weekend finishing in fourth place with a $10.5 million gross for Lionsgate and Millennium (see Autopsy Report: LG’s Conan the Barbarian), the rights holders at Paradox Entertainment awoke to read a report that Stan Lee Media Inc is suing to recapture the rights to the Robert E. Howard-created character, reportedly based on the notion that a transfer of rights from the bankrupt company to Conan Properties constituted fraud and a breach of fiduciary duties. Paradox bought the rights from Conan Properties and owns all 800 stories and poems that Howard created. While Paradox has not been served with the suit, Paradox general counsel Fred Fierst gave the company’s position to Deadline. In a nutshell, they feel the beef has nothing to with them.
SATURDAY PM/SUNDAY AM, 3RD UPDATE: In terms of box office grosses but not necessarily box office quality, Summer 2011 roared in with overperforming hits like Fast Five and Thor and Bridesmaids, then gained steam with Pirates Of The Caribbean: On Stranger Tides, Transformers: Dark Of The Moon and Harry Potter And The Deathly Hallows Part 2. But now it’s leaving with a whimper, not a bang. This was one of those weekends when studio executives didn’t even bother coming up with excuses about why their movies were stillborn. Instead they just held their heads and moaned. Anecdotal reports reaching me from all over showed that moviegoing redefined the terms “soft” and “flat”. As one studio exec told me, “It looks like a ghosttown in theaters.” And yet no less than four wide-release studio films opened Friday. There was some initial confusion over Top 5 order, but the movies sorted themselves out. DreamWorks’ holdover The Help (which needs none) started Friday as the No. 1 movie and ended that way Sunday to distributor Disney’s delight.
But there was widespread disappointing over the failures of Dimension/Weinstein Co’s Spy Kids 4D, Nu Image/Millenium/Lionsgate’s Conan The Barbarian, and DreamWorks/Disney’s Fright Night which wound up all bunched together between a dismal $8M and $11.5M behind another holdover, Rise Of The Planet Of The Apes. Not surprisingly, Conan and Fright Night received only ‘B-’ CinemaScores while Spy Kids managed a ‘B+’. Focus Features tried but couldn’t get its romance One Day to do much but eke out an opening especially with that ‘B-’ CinemaScore. So now two more stars find themselves in trouble at the box office: Anne Hathaway and Colin Farrell. That’s after Ryan Reynolds and Tom Hanks crashed and burned as well. Who’s next?
1. The Help (DreamWorks/Disney) Week 2 1/2 [2,690 Runs]
Friday $5.8M, Saturday $8M, Weekend $20.5M (-21%), Cume $71.8M
Again, the continuing controversy over the black-white issues in The Help has people debating and, most importantly, buying tickets. Nothing like Internet chatter and watercooler talk to keep a small film like this #1. And the Oscar buzz is good for business, too. At least this overperforming pic lessens the sting of Fright Night tanking for DreamWorks. (Well, you can;t win them all…)
2. Rise Of The Planet Of The Apes (Fox) Week 3 [3,471 Runs]
Friday $4.6M, Saturday $6.7M, Weekend $16.3, Cume $133.7M
Look for lots of technical awards nominations for Apes as well as a big Fox push behind popular Andy Serkis for Supporting Actor.
3. Spy Kids 4D - 3D (Dimension/Weinstein) NEW [3,295 Runs]
Friday $4M, Saturday $4.4M, Weekend $12M
I don’t know how The Weinstein Co is going to stay on track with its reorganized finances if Dimension films keep bombing. The whole underpinning of the Weinstein Brothers’ success at Miramax was that Dimension threw off wheelbarrows of box office cash. No more. Here’s yet another unnecessary sequel not helped by its 4D gimmickry, Aroma-Scope schtick, or Robert Rodriguez. (See Robert Rodriguez On His ‘Spy Kids’ Stinker.) The Weinstein Co saw the handwriting on the wall and didn’t bother to brief the media on the film ahead of time. With a ’B+’ Cinemascore and exit polls showing that kids rated the film much higher than parents did (72 excellent and 90 in the top 2 boxes) the film should have done better especially with 3D’s higher ticket prices. But Spy Kids: All The Time In The World had 60/40 with 2D in terms of screens but only 54/46 in terms of business. (To give you some context, The Smurfs was 77/23 with 2D which is more in line with the family film trend). Dimension can keep making this sequel swill but until it comes up with fresh ideas for fresh films, then TWC could tank again.
4. Conan The Barbarian – 3D (Nu Image/Millenium/Lionsgate) NEW [3,015 Runs]
Friday $3.6M, Saturday $3.8M, Weekend $10.5M
Lionsgate execs today are despondent as they try to figure out what went wrong. “It’s one of those weekends that gives me a stomach ache,” one Lionsgate exec told me Friday night. “It’s a headscratcher but it won’t kill us.” But they also know that with Carl Icahn back breathing down Lionsgate’s mane by buying up company shares, and the annual stockholders meeting scheduled for September 13th, this is a really lousy time for this secondary studio to have such a box office bomb. Over the last two weeks Icahn has acquired 756,840 shares in Lionsgate, growing his ownership to 33.2% from 32.6%, presumably in his so-far-unsuccessful effort to gift his son Brent with a Hollywood studio. Last year, Icahn tried but failed to seize control and, after a brief respite, he’s trying yet again all the while carping about Lionsgate’s profligate management and moviemaking strategy. Here’s more ammunition for him. First off, being in business with Avi Lerner’s Nu Image/Millenium film company is a dicey proposition at best. Especially when this Conan The Barbarian reboot cost nearly $90M, which makes this weekend’s opening disastrous even if Lionsgate’s exposure was mitigated by the co-production and co-release. Not even spreading the buzz that previous Conan The Barbarian Arnold Schwarzenegger was treated to a private screening and “really liked it” helped box office which didn’t come near even Lionsgate’s low-ball expectation of $15M from a wide release.
Here’s more footage from Conan The Barbarian, a violent scene in which the young Conan shows an ability to kick some major tail. Lionsgate might have something here. The film opens August 19.
A new trailer is up for Conan the Barbarian, the reboot of the Robert E. Howard hero that has Jason Momoa replacing Arnold Schwarzenegger in the film franchise that first established Arnie as action-hero material. Momoa has become a formidable and intimidating presence on HBO’s terrific Game of Thrones series, …
One of the trailers attached to Battle: Los Angeles in theaters over the weekend was the remake of Conan the Barbarian, the film that marks the biggest bet yet made by Avi Lerner’s Millennium Films. There was a whole lot of back and forth on who might play the role that …