By David Poland firstname.lastname@example.org
It really is odd how quiet things are right now… September is ending… we’re past the Jewish holidays… so very quiet…
I enjoyed getting through the Stradella Road Theatrical Market Study, but I’m a bit disturbed to find at least two online outlets of note misreading the results in significant ways. The Wrap is blaring a headline – “Do Movie Marketers Waste Their Money on TV?” sub-hed, “Study finds that youth learn about movies online and from friends, not from television”- that is no only a gross oversimplification of the findings, but factually inaccurate, according to the study.
Plenty of bad studies come out every year and get overhyped, but when a good one lands and the media rushes to mischaracterize it… oy.
All this hoo-ha about Summit going on a buying spree… I mean… people… math. But Summit eating Lionsgate or MGM right now would be similar to AOL eating Time-Warner or, in movieland, Artisan eating Lionsgate (the opposite happened, in reality). As far as Summit eating WeinsteinCo… good luck with that. What, exactly, would Summit be buying?
The reason that Summit is floating this notion that they are buyers is that it is the takeover target, not the other way around. They should be cash-flow-heavy on the presumed Twilight-franchise revenue and they have no costs that need to be continued. The company would likely be valued at over a billion dollars by Time-Warner or Viacom on the basis of that franchise alone at this point and with all due respect to the management… will never likely be worth more than it is worth RIGHT NOW.
The smartest movie in Hollywood right now, similar to Mark Cuban selling Broadcast.com when he did for what he did, would be selling Summit to a major. But it would not be the first company that got itself obsessed with empire building over the smart financial play.
Specifically, trying to consume the MGM library or the Lionsgate library would lead to a company like Summit going down exactly the same road as Lionsgate and MGM… anxiously trying to sell for year after year after year… never able to build the company to being bigger than the library, no matter how many great and successful opportunities come their way, from Saw to Tyler Perry to Bond to The Hobbit.
Everyone who is in the financials of the movie business wants to have the opportunity that Summit has right now… getting out with a big fat payday after hitting the home run on one property early in the history of the company. The scale can be different. For someone to come along and eat WB, they would be eating Potter and DC, etc, and so the movie side alone would have to be valued at more than $10 billion on that, the library, and the synergistic values alone.
This is why, ultimately, Time-Warner got out of New Line, which had finished its likely peak franchise and from there on, would just be in the movie business. And heck, look at the year already produced New Line product had after the company was shut down! But not enough to keep a second business in business. Not for Time-Warner. (I think this was a short-sighted mistake… but that’s another column.)
What The Weinsteins were offered by Disney back before the split would be snapped up in seconds by TWC now. But no one is offering. And if Summit isn’t thinking about funding Dimension/TWC to a few hundred million a year, what is the point, really? But why would Summit want to be eaten alive by The Weinsteins… makes no sense.
And LOOK, what a surprise… another hack is out there taking a shot across the bow at Universal… now pimping the idea that the head of production and head of marketing should take over from the former head of marketing and former head of distribution from Focus… a ha… production and marketing come up short this year, so they promote the leaders of those departments… interesting strategy… sounds a lot like the one that led to where things are right now.
My take… Universal was slow to respond to the changing economics of the industry and greenlit a handful of movies at exaggerated prices that ended up losing money. Only one lost A LOT of money. In a cyclical business, the Universal situation is not desperate. But God knows, the media wants it to be. And NBC/U management may be listening to that hum. If they are going to make a change – and they might – they need to make a big change. If they just keep pushing junior (albeit very high ranking) staff into higher positions, nothing much will change… by definition.
I am not calling for this change. I believe Universal will rebound without it and that all the drama about this summer has been way overblown. But if new leadership is coming, if it’s not a sea change… a new vision… that the choice to change is not really a choice to change at all.