Today’s Reminder That Hollywood is a Strange Place

The guys who produced Terminator: Salvation, a worldwide hit, have filed for bankruptcy:

Even though the movie has sold a healthy $370 million worth of tickets around the world and has yet to be released on DVD and in other post-theatrical markets, Anderson and Kubicek apparently couldn’t stay afloat. As detailed in yesterday’s lawsuits, they don’t have the assets to pay back one of several loans made by Santa Barbara hedge fund Pacificor, which financed their $30-million purchase of the “Terminator” rights and loaned $9 million for other operating expenses… The list of creditors for Anderson and Kubicek’s three companies — T Asset Acquisition Company, Dominion Group and Halcyon Holding Group — includes four major studios and several big names involved in “Salvation,” including star Christian Bale and director McG. Even California Gov. Arnold Schwarzenegger, whose face is briefly seen near the end of the movie, is on the list.

Even with the caveat that film grosses do not equal what the producers net from the film (by a long shot), it nevertheless does take a special amount of doing to make that much money and yet not have enough money. One wrinkle is that the producers do appear to be quite litigious (their largest creditors are law firms); the other wrinkle is that the Terminator property in itself was mightily expensive for the producers to purchase.

The lesson here might be that it’s time to develop new properties and franchises, said the science fiction writer who just happens to have several that would make excellent, excellent films. The other lesson: The film industry, it’s just plain wacky.

35 thoughts on “Today’s Reminder That Hollywood is a Strange Place

  1. I think a better way to put it is that the film industry is just plain scummy. See Buchwald v. Paramount for what they think “net” profits really mean for a hugely successful picture.

  2. The lesson here might be that it’s time to develop new properties and franchises,

    Yes, please! Also, ones that aren’t so mind numbing and ludicrous as time traveling killer robots who think the best way to conquer humanity is with a convoluted grandfather paradox. As opposed to, say, nuking them from orbit.

  3. Sold! I’ll take your screenplay for Android’s Dream by next week. Your payment-sandwhich is in the mail.

  4. My favorite example is that Return Of The Jedi has, officially, not yet made a profit:

    David Prowse, who portrayed Darth Vader’s torso and limbs in the original Star Wars trilogy, says he has never been paid residuals on “Return of The Jedi“ because the film has never made a profit. I’m calling bantha shit. Or at least space-shennanigans. I’m sure Deathstars are quite expensive, and I know the per diem rate for an Ewok wrangler is pretty high, but to say a film that cost $32 million and has made $475 million HASN’T made a profit verges on space-madness.

  5. Okay, John, if your favorite producer called, with unlimited funds at his/her disposal, and said tell me which one and I’ll make a great film of it and you can write the screenplay, which book are you gonna pick???

  6. How is something like this not plain illegal?

    Or maybe more importantly how is it that agents everywhere don’t know this and protect their clients by not contracting for net anything? Maybe that only happens once to each agent/actor/creative naif?

  7. “The lesson here might be that it’s time to develop new properties and franchises, said the science fiction writer who just happens to have several that would make excellent, excellent films.”

    When there are still L. Ron Hubbard novels that haven’t become films yet? Get real.

  8. …er, going to remake “Yellow Submarine.”

    I hope the funding falls through or the legal wrangling costs too much, but I’m sure this will happen. And then Zemeckis’s dead-eyed Beatle avatars will haunt my dreams.

  9. At least we’ll be spared that ‘awesome’ sequel McG was banging on about in which Skynet sends its entire army back in time to fight the modern military.

    And he thinks his internet pariah status us because of his name…

  10. @17

    Zemeckis shouldn’t be too proud of this technological terror he’s constructing. The ability to destroy sleep is insignificant next to the power of Peter Frampton and the Bee Gees in Sergeant Pepper’s Lonely Hearts Club Band.

  11. Maybe it’s time Hollywood stopped churning out bloated turds and went something with smaller budgets and better scripts. Like Serenity ($40M) or District 9 ($30M). Then when you break your $100M mark, you’re not in hock, you’re highly profitable.

    Of course, that means you get Sharlto Copely instead of Christian Bale, but I’m not sure that’s a bad thing. I’ll take Sharlto’s performance in D9 over Bale’s in T:S (and I didn’t completely hate that film as some did).

  12. If I win the poor tax (the lottery), and a big one, you better believe I will finance OMW all the way.

  13. “The lesson here might be that it’s time to develop new properties and franchises, said the science fiction writer who just happens to have several that would make excellent, excellent films. ”

    Absofuckinglutely. The news that Bryan Singer (whose work I generally like a bunch) is re-imagining Galactica *again* right after a four-year re-imagining finished makes me confused and sad. What next, four simultaneous, different versions of Buck Rogers?

    The IP cowardice of trading around the same old names, re-hashing the same old concepts and churning out ersatz, skimmed-milk sequels needs to die. In a fire, preferably. There are thousands of brilliant new stories just lying around waiting to be told, and I’d love to see some of them come to light – much more so than any other sequel I can think of. (Except, y’know, Firefly Season 2. And 3, 4, 5, 6 and 7. I’d be just fine with that).

  14. @2. Time travelling killer robot go back in time then nuke humanity? A bit . . . short. But wait! Successful Science fiction writer (played by Nick Cage) saves humanity using only photoshop, his daughter’s peanut butter cookies and the power of bacon! Humanity is saved! Until the inevitable sequel.

  15. I think the fact that District 9 made a profit on opening weekend and only cost 34 million has made that point as well.

    Which reminds me, where’s the District 9 discussion? Have you seen it yet? It was the best movie this year in my opinion.

  16. This line jumped out at me:

    “As detailed in yesterday’s lawsuits, they don’t have the assets to pay back one of several loans made by Santa Barbara hedge fund Pacificor, which financed their $30-million purchase of the “Terminator” rights and loaned $9 million for other operating expenses”

    This is not an isolated example of a hedge fund being involved when an apparently successful enterprise heads into bankruptcy courts; the bankruptcy of “Linens ‘n Things” was similarly driven into bankruptcy, despite being profitable, by a rapacious hedge fund.

    These folks essentially gamble with others people’s money and rake huge profits when their gambles succeed. They face few losses when their gambles fail; instead their investors and often the companies they “invest” in take it in the chin.

    All that would be needed to complete a picture of hedge fund perfidy is if, somehow, pacificor had credit default swaps that hedged them in case “Terminator: Salvation” went bankrupt. That would give pacificor no incentive whatsoever to have “Terminator: Salvation” avoid chapter 11

    I don’t usually buy into the notion of capitalist scum, but I will make an exception for hedge fund managers.

    Cheers
    Andrew

  17. Joe Straczynski, the producer of Babylon 5, has waxed philosophical (just this side of cursing on teh internets) about how Warner Brothers continues to maintain B5 never made a profit.

    ‘Course, Warner Studios is a special case, in that there is Warner TV, Warner Movies, Warner Video, and they compete to see who can make the most money by not cooperating.

    Joe has also waxed philosophical (in teh other direction) about how he is now a “A List” guy since getting noticed by and hooking up with Ron Howard and Clint Eastwood.

  18. This sort of thing was inevitable – a production company dumps and dumps and dumps money into a movie, and the returns, even if they’re good, can’t make up for the cost. With actors alone expecting $20 million salaries, how could we not see this coming.

  19. The Mel Brooks movies/musical titled ‘The Producers’ is a documentary about entertainment accounting, not fiction as most people think.

  20. Does anyone know Neil Blomkamp’s address? I’d like to send him a copy of the Old Man’s War books with a note that reads “Forget about Halo. This is where it’s at!” If that man can’t direct that first battle in OMW between the CDF and the Consu, nobody can.

  21. said the science fiction writer who just happens to have several that would make excellent, excellent films…

    Judging by the recently released trailer for “Avatar”, James Cameron would appear to agree?

    (Okay, so it’s not exactly the OMW scenario, but if Harlan Ellison could sabre-rattle his way into the credits of the Terminator films based on a substantially more tenuous similarity, I’d say you’re due a big fat paycheck here.)

  22. John: I’m largely kidding (and I certainly don’t think you should actually sue!), but watching Sam Worthington get transferred into a blue-skinned ass-kicking machine was a little eyebrow-raising.

    I certainly hope that this doesn’t affect OMW’s chances of getting optioned/made.

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