Forbes: The Box Office Lessons of Legend of Tarzan

Scott Mendelson, one of the premiere box office savants, has jumped in with a detailed analysis of Legend of Tarzan Box Office which is well worth reading from start to finish. The Cliff Note version:

He has a few key takeways — among them, don’t overspend on the first installment of a reboot so you can keep the bar at a reasonable level (LOT didn’t do this, and it’s struggling becasue of the budget in spite of a good performance that shows it can draw crowds.); don’t spend 80% of the first reboot getting through the origins story — let Tarzan be Tarzan for the whole reboot movie (LOT did this), and overall — he says it’s not a bad idea to reboot familiar characters who have been away for awhile.  (This is refreshing, given the “no one wanted a Tarzan movie” mantra that’s out there.)

He also does the math and sees it getting close to $125M domestic with a probable 25-75 domestic foreign split — so $500M is in sight. He doesn’t say for sure that it will get there, but he implies it probably well — and also points out that because of the big budget,  there’s no guarantee that’s enough.

My comments:

• I agree with most of it. No one is acknowledging that tax rebates whih may well bring the budget back down to $150M or so.  A tax rebate dollar is worth $2-3 at the box office because it goes straight to the bottom line of the spend of the producer.  LOT got the Quebec rebate and should have gotten the UK rebate. Has this already been computed into the $180M rumored budget? I don’t think so.  Hopefully there will be a way to know for sure on this, but the point is — $180m might be $150M.
• When contemplating franchises, it is not simply about — is the first film profitable. It’s, will the franchise be profitable.  Costs get amortized.  At least $20M of the cost of LOT will get lopped off and spread among future films –these would be the one-time development costs that all get charged to the first film if there’s only one, but which get shared if it’s a series. Avatar budget came down $30M on this.  It’s just a paper thing — but it’s real.
• So if you factor all of that in, and the fact that they didn’t overspend on promotion, I thin the sequel threshold point is closer to $400 than $500 …. but as I said in another post, there is a psychological thing going on too. All the hostility and “it’s inherently racist” talk may push the bar back up higher.  For sure, the pitch for a sequel will have to include a serious plan for dealing with that issue in the story and in the communications.