Putting my money where the movies are: March 2015

Putting my money where the movies are: March 2015

The first widely released movies (for the USA) for March 2015 are about to hit the theatres, so I wanted to share with you my allocations in our

The $100 Million Box Office Challenge

That’s a new game we are playing, and you can participate! There is no charge, and there we play for that most valuable of human possessions: braggin’ rights.😉

The March game is closed, but the April game is now open.

The basic idea is that you have $100 million in imaginary money. You “invest” that in the movies, and you “win” imaginary money based on how well the movies do.

This how I’ve allocated my $100 million for March (this will be updated with production budgets and dogroes, but I won’t know either when I make my “investments”), and where I am, updated on April 19, 2015:

  • Chappie $20m (prodbud: $49m | dogro to date: $31.3m | % return: 64% |  $7.2m loss to date for me)
  • Unfinished Business $5m (prodbud: $35m | dogro to date: $10.2m | % return: 29% | $3.6m loss to date for me)
  • Cinderella None (prodbud: $95m | dogro to date: $188.4m | % return: 198% | not invested)
  • Run All Night $5m (prodbud: $50m | dogro to date: $26.2m | % return: 52% | $2.4m loss to date for me)
  • Insurgent $20m (prodbud: $110m | dogro to date: $122.6m | % return: 111% | $22.2m win to date for me)
  • Do You Believe? $10m (prodbud: N/A | dogro to date: $12.4m | if the prodbud remains unknown, no win or loss for me)
  • The Gunman $10m (prodbud: $40m | dogro to date: $10.6m | % return: 27% | $7.3m loss to date for me)
  • Get Hard $15m (prodbud: $40.0m | dogro to date: $81.2 | % return: 203% | $39.5m win to date for me )
  • Home $15m (prodbud: $135m | dogro to date: $147.3m | % return: 109% | $16.4m win to date for me)

Running total: $57.6m to date

It’s important to note that I can’t get back more than the movie makes, which helps explain some of these “investments”.

For example, Get Hard is an R-rated comedy starring Kevin Hart and Will Ferrell. Hart has been on a roll lately:

Title Dogro Prod Budget Return Profit
Ride Along 135 25 540% 110
About Last Night 49 12.5 392% 36.5
Think Like a Man Too 65 24 271% 41
The Wedding Ringer 65 23 283% 42
Average 78.5 21.125 371% 57.375

So, for the past year or so, betting on Kevin Hart makes sense.

Why not invest all $100m in that one movie?

The profits haven’t been that high.

Let’s say the movie makes that average return of 371%. I’d get back $56m (rounded). That’s fine…if the movie profits that much, which is only the case in one out of the four listed above. It may turn out that I invested too much money based on that (I didn’t do the analysis above when I made my “investments”.

I don’t know what the budget is when I make the investments…we usually don’t get that until the movie is released.

I just can’t see a scenario where I would invest $100m, and I wouldn’t hit the return cap. If the production budget is $25m, and the return is 371%, it would need to make several hundreds of millions of dollars domestically for me to get the fullest return…and that’s just not going to happen.

It is worth noting that The Wedding Ringer will still make some more money.

I think people are going to think of this as a Kevin Hart movie, because he has been so hot at the box office (and that hasn’t depended on the co-star). Still, looking at Will Ferrell is also a good bet: The LEGO Movie, Ancorman 2, The Campaign…we’ll stop before we get to Casa De Mi Padre.😉

While Chappie has some really big name and big box office stars (Hugh Jackman, Sigourney Weaver), I think it’s going to be seen as a Neill Blomkamp movie. That makes this trickier: District 9 had a great return on a $30m budget; Elysium didn’t break even (production budget versus dogro ((domestic gross)), which is how we do this), but still did close to $100m.

I think that Blomkamp learned a lesson. It’s a super clear premise (and one that worked for Short Circuit), and has been promoted a lot. The timing feels good on the opening: if the budget is low enough, I’m pretty confident.

Unfinished Business is not one that I’m expecting to break $100m, but I think the budget is low. Dave Franco has been bringing in the bucks. I thought a small investment here might have a pretty big return, even without huge box office.

It might seem odd that I didn’t invest any money in Cinderella. I’m just not confident that they haven’t overspent on this, in terms of dogro. That doesn’t by any means mean that the movie was a mistake: it should do well internationally, and have big merchandising bucks. A Frozen short might help get people into the theatres…but I don’t think it will be enough to do, say, double the budget.

Run All Night is another one of those which I think will have a good return rate, but not great box office overall. My guess is that the budget is under $50m…and Liam Neeson is a draw.

Insurgent could do really well at the box office, and the first one wasn’t a “break the bank” budget. It should run well for quite a while, so I won’t know what my return is until…Memorial Day, and perhaps a bit past then. I invested a relatively large amount, but I think it could profit over $100m.

Do You Believe? I believe that low budgeted faith-based movies are a good investment (and high budgeted ones often aren’t). I’m guessing I could profit at least $40m on this one.

The Gunman…Sean Penn isn’t why I went with this. I think there may be some resonance with American Sniper in it, and I’m guessing the budget is quite low.

You might think Home is a sure bet, but animation isn’t, in terms of return rate (look at Penguins of Madagascar, which should have had a lot going for it). The director is not a known quantity, and I’m unconvinced that the voice cast is going to make it a must see. I suspect this one will do fine with kids, but won’t draw in the adults enough. I still invested quite a bit in it…looking at it now, I may have overdone it, but we’ll see.

Don’t agree with my assessments? It’s too late to play for this month, but don’t forget that you can play for April!

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This post by Bufo Calvin originally appeared in the  The Measured Circle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

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