UPDATE: A mathematical error on our part made The B Team‘s ability to break even seem highly unlikely. We’ve updated the story to indicate that Sony’s still paying a lot of money for a movie that has a fairly good chance of not breaking even, just not as unlikely as we originally thought.
EARLIER: Will Ferrell’s upcoming movie, The B Team, has gotten quite a bit of attention so far because it’s set to pair Will with Mark Wahlberg in an action comedy and because the script was the subject of a bidding war earlier this week. But what the trades didn’t report (but Patrick Goldstein from the LA Times helpfully does) is that Sony had to agree to pay $100 million to make the film and give the talent 25% of the first-dollar gross, meaning they get 25% of box-office revenues even before the film breaks even.
It’s a steep price tag that, Goldstein reports, knocked Universal, New Line and Paramount out of the bidding war. Sony is hoping the film will be the next Rush Hour, and Will Ferrell can obviously sell tickets, even to a Broadway show, but $100 million is a lot of money to pay for a comedy. And, as Goldstein notes, even though Will is a hit in the U.S., his movies haven’t done very well overseas in an age in which the foreign box-office is becoming an increasingly important source of revenue.
So did Sony just agree to spend $100 million on a movie that may not break even, let alone turn a profit?
Let’s crunch the numbers: If the production budget is $100 million and you add $30 million-$50 million for marketing, that means The B Team would have to make more than $260 million $130 million-$150 million worldwide in order for the studio to break even, without factoring in the 25% first-dollar gross figure. Once you factor in that 25 cents of every dollar goes to the talent, we believe that pushes the film’s break-even point to $175 million-200 million.
That seems highly unlikely for a Will Ferrell comedy at the box office. The average domestic box-office gross for Will’s films is roughly $54 million. And of his four films that have made more than $100 million, only three have topped $130 million worldwide: Blades of Glory, $146 million; Talladega Nights, $163 million; and Elf, which made $220 million at the box office and is likely pulling in more every Christmas through DVD sales and TV broadcasts. Mark Wahlberg is more of an overseas draw: four of his past five films have made more money at the foreign box office than they have in the U.S., but only The Happening and The Departed have grossed more than $130 million, with The Happening pulling in $163 million, thanks to strong overseas interest, and The Departed grabbing $290 million worldwide. But we have a feeling Jack Nicholson, Martin Scorsese, Leonardo DiCaprio and Matt Damon, not to mention a Best Picture Oscar, helped boost ticket sales for that one.
So, Sony better hope that The B Team is not only a box-office hit but also sells a lot of DVDs or that Will becomes a big overseas draw in the next year or so. And they should probably line up a good financing partner regardless. Setting the movie at Christmas might not be a bad idea either.
Business Insider Emails & Alerts
Site highlights each day to your inbox.