My disdain for studio execs grows ever larger...

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Re: My disdain for studio execs grows ever larger...

Postby warmongerclub » Thu Oct 26, 2006 11:26 pm

So Gene, suppose some long lost uncle dies and leaves you a movie studio, how would you run it?

Unpainted. The way he runs everything else. :lol
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Re: My disdain for studio execs grows ever larger...

Postby -Papa Gino » Fri Oct 27, 2006 12:27 am

Correction - I have now transitioned from Unpainted to Primed and Partially Basecoated.

There is a world of difference.

@Duncan - that's the problem. They don't. Or many more of them do not experience the IRRs that a studio should be looking for, primarily as the execs feel that it's better to greenlight "safe" drivel and hope for a ten-bagger than to actually think about what they want to do with their money.

Charlie's Angels 2 was a perfect example. There was no way on God's Green Earth that movie was going to have anything approaching a decent return. Maybe do slightly better than breakeven, which means the studio could have just parked the money in U.S. Treasuries and gotten a similar (or better!) return without the risk. The film's financial disappointment had nothing to do with the script, or the directing, or anything of the kind - purely on a numbers basis. That is, if you looked at the cash flow data from CA1 (which I did, at the time), threw in the changes in release dates between CA1 to CA2 (moving CA2 to a vastly more competitive slot), and adjusted for the lack of "novelty factor" with CA2 vs. CA1 (which had played a huge role in CA1 getting the box that it did), _then_ adjusted for the increased production budget, you got a film that 9 out of 10 would perform worse than CA1. And CA1's IRRs were anything but stellar.

So you basically greenlight it because a) you feel you need to do something to justify your existence within the organization, b) it's a safe option and c) once in a while you luck out and the safe option breaks the bank.

In the meanwhile, the studios as a whole haven't exactly been doing terribly well on the return side of the equation for some time (though they have managed to prop up their numbers by marketing their existing film libraries - carried at virtually zero cost - shrinking the theater-to-DVD cycle, though they're now seeing some push-back there, etc.; having a few "sure things" like Star Wars definitely helped matters).

I currently have to run (work-related things), but to repeat - my main issue with the studio execs is that they make safe but dumb (from any angle - especially from the financial angle) decisions, hoping that the few of them that pay off (potentially Rambo IV if they don't kill it on costs and release it in the right slot) will offset the sub-par returns (or losses) on the rest. It's the same with network TV programming, by the way (well, with some additional nuances). By contrast, I would run the whole thing rather differently, more like a hedge fund investing in different types of "movie" vehicles. I'll probably elaborate in a future post, when I have the time.
-Papa Gino
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Re: My disdain for studio execs grows ever larger...

Postby elrodogg » Fri Oct 27, 2006 12:34 am

There is a world of difference.

No, not really. :p
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Re: My disdain for studio execs grows ever larger...

Postby mauleed » Fri Oct 27, 2006 1:18 am

Thanks for the input Mr. Gene.

Look forward to your next installment.
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Re: My disdain for studio execs grows ever larger...

Postby Amazonwarlord » Fri Oct 27, 2006 1:32 am

sorry gene but I will NOT be watching Rocky. I stopped at 2.

First Blood was a half way decent book as I recall .. read it just after High School after my mom recommended it.

The rest of the Rambo crap is just an excuse for Sly to pump up, Strip down, shout unintelligible sentences, and blow crap up. I'll not pay to watch it. But if it comes on TV and I've nothing better to do I may. (But not Rocky)
"I have not failed, I've just found ten thousand ways that won't work." – Thomas Edison
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