logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

 


Are Big Budget Movies Really the Best Investment for Sony?

  +Follow August 5, 2013 8:26AM
Share:
Tickers Mentioned:

George Loeb owns seven percent of Sony Corp (SNE) and the hedge fund manager has felt that’s given him leeway to weigh in on creative decisions. Following two successive high-profile “flops” by Sony, Loeb started openly criticizing the studio’s choices, and wrote a letter recommending that they spin off their entertainment division to focus more on the electronics side of the business.

In an interview with entertainment news site Deadline, George Clooney made his feelings about hedge fund managers weighing in on the movie business clear– stay out of the creative process.  Clooney said, “What he’s doing is scaring studios and pushing them to make decisions from a place of fear. Why is he buying stock like crazy if he’s so down on things? He’s trying to manipulate the market.”

Clooney wasn't done there. He added, “[Loeb] calls himself an activist investor, and I would call him a carpet bagger, and one who is trying to spread a climate of fear that pushes studios to want to make only tent poles.” According to Clooney, when hedge funds get invovled, movie studios are only interested in making safe bets, often $100+ million blockbusters that don't carry the critically lauded heft of a mid-budget or indie. Clooney singled out critcal darlings Michael Clayton, Out of Sight, Good Night, And Good Luck, The Descendants and O, Brother Where Art Though? (movies Clooney was personally involed in) as being movies that would never get made if investors had more control over the creative process.

On the surface, the differing opinions on Sony's fate - one from a "bean counter," one for a creative - seem to be a battle over money versus art. But are Sony's big budget, safe investment "tentpole" movies really that much more economically sound? That is, of the movies Sony has released this year, regardless of big budget or small, untestedconcept or tent-pole, how did they do from a purely financial return standpoint?

Sony and their subsidiary TriStar have released a total of seven films this year. Here’s a breakdown of them:

Grown Ups 2

Production Cost: $80 million

Box Office $123,350,206 (still in theaters)

Profit/Loss Percentage (so far):  + 54.18 percent

Sequels are usuall a safe bet, and the Adam Sandler/Chris Rock/ Kevin James comedy is no exception. Though critically abhorred, this franchise epitomizes what a risk-averse executive is looking for: bankable stars, sequel, appeals to a young audience. The film could end up doubing its intiial investment by then end of its run, probably somehwre around September 2013.

This is The End

Production Cost: $32 million

Box Office: $107,800,422

Profit/Loss Percentage: +236.8 percent

This Seth Rogen/James Franco ensemble meta-comedy, besides its big name stars, has been a big success for Disney. The original concept movie had a modest budget and low-key advertising campaign. A film like This is The End - wherein fictionalized versions of various celebrities react to the ongoing apocalypse - is a film both the Clooneys and the Loebs could get behind. That is, the film has gotten both good reviews and good returns.

White House Down

Production Cost $150 million

Box Office $116,677,953

Profit/Loss Percentage: -22.3 percent

And sometimes studios take the "safe bet" and fall on their face. This movie, on paper, seem slike a slam dunk: highly bankable stars in Jamie Foxx and Channing Tatum; high concept summer blockbuster; a patriotic movie released on the July 4th weekend. But the risk was built right into the price tag: $150 million is a lot to recoup. And this big budget flick just couldn't overcome that, nor its middling reviews (47 percent on Rotten Tomatoes.)

White House Down is what results when investors and creatives try to compromise, and fail. In short, nobody at the studio is happy when something like this movie comes out.,

After Earth

Production Cost: $130 million

Box Office $242,304,315

Profit/Loss Percentage +86.3 percent

After Earth was one of the two movies cited by Loeb (along with White House Down) as being indicative of Sony's broken movie strategy. And while this Will Smith/Jaden Smith sci-fi flick was a tremendous bomb stateside, only bringing in around $65 million domestic, what people fail to count in is the film was a hit internationally, more than recouping its budget.

Evil Dead

Production Cost: $17 million

Box Office $97,542,952

Profit/Loss Percentage: +473.6 percent

Evil Dead was a safe bet all around: a remake of an established horror franchise, cheap to produce, young target audience. And the film was enormously profitable. Released by Sony imprint TriStar, Evil Dead isn't going to be winning any Academy Awards, but it proved to be a solid investment for the company, and percenta-wise was their most profitable venture.

The Call

Production Cost $13 million

Box Office $51,872,378

Profit/Loss Percentage: +299 percent

TriStar's second release of 2013, the Halle Berry-helmed high concept thriller is, like This is the End, the kind of movie taht keeps both creatives and investors happy. The story is original, the movie was cheap to produce, and while it had no international appeal, it did very repsectably at the box office, ringing in a ver healthy profit.

The Smurfs 2

Production Cost $115 million

Box Office : $80.26 million (still in theaters)

Profit/Loss Percentage: -30 percent

The sequel to the CGI smash The Smurfs has "tentpole" written all over it. Yet after just one week, pundits are already saying the movie is a big disappointment, and will have to (like After Earth) ring in big overseas numbers to recoup. Horrendous word of mouth is likely to sink this kiddie flick in the US: it's only got a 12 percent rating on Rotten Tomatoes.

It seems that, at least for Sony this year, the highest return seems to be original, high concept low-to-mid budget flicks. Of course, this list doesn't include tJames Bond movie Skyfall, Sony's smash tentpole that brought in more revenue than every movie on this list combined - 1.1 billion box office, to be precise.

But for 2013, Sony's biggest hits, percentage-wise, are the orginal non-tenpoles, albeit ones that actually have a healthy return. They're the movies that both creatives and investors love, giving hope that the Loebs and the Clooneys can one day find a middle ground.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Liked What You Read? Join Equities.com and Connect With Your Favorite Financial Experts FOR FREE! Members of Equities.com gain access to our leading financial news and content, active social investment community, proprietary research tools including the 2014 Small-Cap Stars, E.V.A. reports and more.

Results for SNE
Bidness Etc
31 Jul 15 05:40:29
Sony PS4 Sales Cross 25 Million Units - http://t.co/eqTYNdQtpd $MSFT $SNE http://t.co/V5iqDsaYLe
Euan Walls
31 Jul 15 05:16:53
RT @andreascseh: #Sony Posts Triple Profit #Growth, Operating Increased by 39% $SNE http://t.co/JplVjcH1js @tozsdeikeresked @SCMPInt http:/…
sOoGeR bOmZ
31 Jul 15 05:13:48
RT @andreascseh: #Sony #Xperia Z5 packed with powerful specs retina scanner, fingerprint , gravity sensors $SNE http://t.co/mbO3hme5LA http…
Andreas Cseh
31 Jul 15 05:07:54
#Sony #Xperia Z5 packed with powerful specs retina scanner, fingerprint , gravity sensors $SNE http://t.co/mbO3hme5LA http://t.co/QuEkFpXOMm
Samuel Brown
31 Jul 15 05:06:10
$SNE Motorola Solutions Inc (NYSE:SNE) Moto 360 VS Sony Corp (ADR) (NYSE:SNE ... http://t.co/TawIG7oKxQ
Andreas Cseh
31 Jul 15 05:00:38
#Sony Posts Triple Profit #Growth, Operating Increased by 39% $SNE http://t.co/JplVjcH1js @tozsdeikeresked @SCMPInt http://t.co/VcQyhgVOt6
sonyvalentine
31 Jul 15 04:39:36
"@TheStreet: Sony reported its highest first-quarter profits in 8 years, thanks to selfies http://t.co/ah7I7y9zh1 $SNE"
sonyvalentine
31 Jul 15 04:39:01
"@camwilmot: .@sony teases a new smartphone for that will take 'split-second photos' $SNE http://t.co/7cKMNqfIcq http://t.co/9gJOgtGmau"
Andreas Cseh
31 Jul 15 02:20:07
The Golden #MacBookPro #Apple Innovation is to Copy $SNE $AAPL #SteveJobs http://t.co/creUEsBstf @george_chen @wiwo http://t.co/DWeKDRzxYN
Andreas Cseh
31 Jul 15 02:12:15
#SteveJobs Wanted #Sony’s VAIO Notebook To Run #Apple’s #Mac #OSX $SNE $AAPL http://t.co/kgJcUtfO5i @manager_magazin http://t.co/aIjtPcFEdX
PlanetOption
31 Jul 15 00:16:08
#Sony's #smartphone losses are canceling out its #PS4 wins http://t.co/z3H6a4N9aw $SNE #earnings #Z5 #Z5Plus http://t.co/dp8mm3ZeYA
TalkMarkets
31 Jul 15 00:09:02
#Sony Earnings Soar Over 200% Y/Y On Image Sensor Sales $SNE http://t.co/SmhjntRefp
Rosner Stocks
30 Jul 15 21:51:07
XLP Consumer Staples Select Sector SPDR Open http://t.co/cEwJK5hHoQ $XLP $KORS $SNE $HYG #XLP #share #invest
DennyT
30 Jul 15 21:46:33
SNE Sony Corp. Message Board Posts http://t.co/MyYO9YrBnK $SNE $BRK/B $SLTD $VXX #SNE #stocks #stockmarket
jim50
30 Jul 15 21:46:05
SNE Sony Corp. Bid Size http://t.co/TivgRsVKZQ $SNE $NTRS $LNKD $WJA.TO #SNE #tradeideas #finance
IH News Desk
30 Jul 15 21:46:04
SNE Sony Corp. Volume http://t.co/ii14Wu2JUx $SNE $F $TSLA $HYG #SNE #tradeideas #stock
IH NASDAQ OMX
30 Jul 15 21:45:37
SLB Schlumberger Ltd. Stock Forum http://t.co/eOYF6bDkuh $SLB $GE $XLY $SNE #SLB #tradeideas #finance
Lucky Jimmy
30 Jul 15 21:45:09
SEDG SolarEdge Technologies, Inc. Short Sales http://t.co/DCZUHQz6zs $SEDG $SNE $KITE $MYEC #SEDG #stockmarket #investing
Rosner Stocks
30 Jul 15 21:44:21
PTAH PTA Holdings, Inc. Day High http://t.co/erxIv1A3Ti $PTAH $T $GOOGL $SNE #PTAH #stock #nasdaq
danrocks
30 Jul 15 21:43:02
NAT Nordic American Tanker Shipping Ltd. P/E Ratio http://t.co/1xq3mVn15x $NAT $USO $SKX $SNE #NAT #nasdaq #pennystocks
TEK2 IT Solution
30 Jul 15 21:41:28
RT @camwilmot: .@EA: Star Wars Battlefront enjoying "extremely strong pre-orders" #gaming $EA, $MSFT, $SNE http://t.co/LSUdFIlkRn http://t.…
Casey Dairies
30 Jul 15 21:38:22
RT @TweakTown: .@EA: Star Wars Battlefront enjoying "extremely strong pre-orders" #gaming $EA, $MSFT, $SNE http://t.co/3tEDvlpHeO http://t.…
Cowboy Games
30 Jul 15 21:37:04
RT @camwilmot: .@EA: Star Wars Battlefront enjoying "extremely strong pre-orders" #gaming $EA, $MSFT, $SNE http://t.co/LSUdFIlkRn http://t.…
Cameron Wilmot
30 Jul 15 21:36:06
.@EA: Star Wars Battlefront enjoying "extremely strong pre-orders" #gaming $EA, $MSFT, $SNE http://t.co/LSUdFIlkRn http://t.co/0zeqb8N1Gv
TweakTown
30 Jul 15 21:36:06
.@EA: Star Wars Battlefront enjoying "extremely strong pre-orders" #gaming $EA, $MSFT, $SNE http://t.co/3tEDvlpHeO http://t.co/IUKv21teHt
Rosner Stocks
30 Jul 15 21:35:05
DE Deere & Co. Day Low http://t.co/v62YycJtu3 $DE $XLE $SNE $XLV #DE #tradeideas #invest
Zubeyr Kamil Açıksar
30 Jul 15 21:18:42
RT @shuli_ren: Sony: Big Q2 Beat On Games, Image Sensors; Mobile Continued To Drag http://t.co/O6OYY8pezh via @barronsonline $SNE $6758.JP
Cameron Wilmot
30 Jul 15 20:37:06
.@sony teases a new smartphone for that will take 'split-second photos' $SNE http://t.co/kFJAkPvbK8 http://t.co/AqyEZJ3yqn
TweakTown
30 Jul 15 20:37:05
.@sony teases a new smartphone for that will take 'split-second photos' $SNE http://t.co/zOO42KmjSI http://t.co/J6C9jnEs4w
TalkMarkets Recap
30 Jul 15 18:09:02
#Sony Earnings Soar Over 200% Y/Y On Image Sensor Sales $SNE http://t.co/yDCuAofrA1
Cameron Wilmot
30 Jul 15 17:41:08
.@RocketLeague racks up 5 million downloads in only 22 days $SNE http://t.co/bu9Ty9aJ7Z http://t.co/ruvytjWEPi
TweakTown
30 Jul 15 17:41:05
.@RocketLeague racks up 5 million downloads in only 22 days $SNE http://t.co/fyHuS8LRG9 http://t.co/Mt60n6wQ3w
Shuli Ren
30 Jul 15 17:06:33
Sony: Big Q2 Beat On Games, Image Sensors; Mobile Continued To Drag http://t.co/O6OYY8pezh via @barronsonline $SNE $6758.JP
Cameron Wilmot
30 Jul 15 17:00:09
.@sony plans to open polls for new PS Plus games $SNE, $MSFT, http://t.co/IjqvBMIoZt http://t.co/TIQ7pr3XM9
TweakTown
30 Jul 15 17:00:05
.@sony plans to open polls for new PS Plus games $SNE, $MSFT, http://t.co/d7xacdbAsE http://t.co/WTUKzt1urs
TalkMarkets
30 Jul 15 16:39:01
#VIZIO To File #IPO, Expects To Raise $173 Million $GOOG $SNE $AMZN $NFLX http://t.co/NLdZVhFchj
TweakTown
30 Jul 15 15:59:10
.@Microsoft trying to find ways to boost @Xbox One, game sales in China $MSFT, $SNE http://t.co/RqDLKp4V73 http://t.co/YfjlaK6UBQ
Cameron Wilmot
30 Jul 15 15:59:08
.@Microsoft trying to find ways to boost @Xbox One, game sales in China $MSFT, $SNE http://t.co/nCEVPV3io4 http://t.co/b3sYBELK96
James DiPlata
30 Jul 15 15:29:44
RT @mercadomagico: Find your SONY PlayStation accessories here https://t.co/3X4S8fy6Xq … $NMGC $SNE http://t.co/VP54j4m09R @NeoMagic_Corp…
dailystockplays.com
30 Jul 15 15:14:55
Lizard Bearish http://t.co/etNHsOGqIb $HOLX $HOT $AKS $SGYP $EXPE $CXO $CPN $NR $LRCX $TS $RES $ITC $SNE $VALE $PF $AFL $PXD $KKR
stockmarketnow
30 Jul 15 15:07:14
RT TheStreet: $SNE profits were up threefold at $664 million, almost double analyst estimates -- and it's because … http://t.co/jv1jRFRkws …
Seeking Alpha Alerts
30 Jul 15 15:06:16
@PedroIsento $sne Sony Corporation (SNE) Q1 2015 Results - Earnings Call Transcript http://t.co/8Q62Fiu5mC
John Michael
30 Jul 15 15:00:53
RT @TheStreet: $SNE profits were up threefold at $664 million, almost double analyst estimates -- and it's because of the selfie http://t.c…
Florent Capital
30 Jul 15 14:56:54
RT @TheStreet: $SNE profits were up threefold at $664 million, almost double analyst estimates -- and it's because of the selfie http://t.c…
TheStreet
30 Jul 15 14:50:19
$SNE profits were up threefold at $664 million, almost double analyst estimates -- and it's because of the selfie http://t.co/FKBSe40VF9
cosiaddict
30 Jul 15 14:42:39
RT @FlorentCapital: 12-16 months PT $SNE $50 $COSI $3 $NUGT $50 $RCS.MI €1.75 $CLE.MI €1.50 STEF.MI €0.50
Atopesca
30 Jul 15 14:39:48
RT @FlorentCapital: "Optimistic abt long-term potential for Gold Miners $GDX $NUGT,NeoMagic / http://t.co/IBn4tsxdly $NMGC Sony $SNE Spanis…
Atopesca
30 Jul 15 14:39:29
RT @mercadomagico: Find your SONY PlayStation accessories here https://t.co/3X4S8fy6Xq … $NMGC $SNE http://t.co/VP54j4m09R @NeoMagic_Corp…
TheExtraIncome
30 Jul 15 14:23:52
Top news of today 30 July 2015 $BIDU $IBM $MATX $RCL $SAN $SNE $SNY $TST http://t.co/UX48wDJFoc
dk
30 Jul 15 14:13:28
RT @TweakTown: #FinalFantasy7Remake's combat to be "dramatically changed" $SNE http://t.co/KWUYtEnEsr http://t.co/p3jOILQHSB
				
				
  +Follow August 5, 2013 8:26AM
Share:

Comments

 

blog comments powered by Disqus

 Today's Must Reads

5 Small-Cap Energy with Hedges to Survive Oil's Bear Market


DraftKings and FanDuel: The New Face of Legalized Online Sports Betting

Is the Market Paying the Toll of Tech?

What Will Uber Look Like in the Future?


How Dodd-Frank Divides Political Parties Prior to 2016 Election

 

Apple (AAPL) is expected to announce its latest quarterly earnings next week. As the most valuable company by mark... in Equities.com's Hangs on LockerDome

About us

Equities.com is an advanced financial data portal and social network designed to connect self-directed investors with the world’s most innovative startup and small cap companies. Through our in-depth coverage of small cap markets, comprehensive research and stock valuation reports, state of the art issuer products, and world class events, Equities.com provides the social tools and insight that drive tomorrow’s investment relationships and opportunities.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.

Login or Register

LOG IN