Billion-Dollar Bond Breakdown: Who's Making What From 'Skyfall'
MGM, the Broccoli family and Sony all have fingers in the pie as the extraordinary worldwide grosses come just in time for a flashy IPO.
This story first appeared in the Nov. 23 issue of The Hollywood Reporter magazine.
The numbers have left Hollywood shaken and a little bit stirred. Skyfall, the 23rd installment of the 50-year-old James Bond franchise, has become a global phenomenon. Its opening-weekend haul in the U.S. was $88.4 million -- almost $21 million more than the previous Bond, 2008's Quantum of Solace. Even adjusting for inflation, that's a big leap. (Quantum's $67.5 million would be $72.5 million in today's dollars.) And overseas, the numbers are even more impressive, with $427.8 million in grosses outside the U.S. as of Nov. 11. Many Hollywood observers now believe the Sam Mendes-directed picture could be the first Bond -- and only the 14th film ever -- to pass the $1 billion mark at the worldwide box office.
"In particular, the numbers in the U.K. and Latin America have been astonishing," says Wunderlich Securities analyst Matthew Harrigan. "It speaks to the strength of the Bond franchise."
The windfall will benefit three players in the Bond universe: studio MGM; producers and rightsholders Barbara Broccoli, 52, and Michael G. Wilson, 70; and distributor Sony Pictures. Here's how Bond's possible billion would be divvied up:
In a complicated deal that was heavily negotiated with Sony after MGM emerged from bankruptcy in 2010, several insiders say MGM and Broccoli and Wilson will jointly collect 75 percent of the movie's profits, depending on overhead charges and other fees.
The remaining 25 percent will go to Sony, which funded part of Skyfall's roughly $210 million production budget (it came in under $200 million after tax breaks) and which will recoup heavy costs for prints and advertising before profits are allocated. Sony is believed to be taking a distribution fee, but the precise amount is not known. (The studio declined comment.) 20th Century Fox is handling home video.
How MGM and the Broccoli family split their own 75 percent also is complicated. Two executives familiar with the deal say it involves voluminous contracts between MGM and two companies controlled by Broccoli and Wilson, Eon Prods. and Danjaq LLC. The executives say the half-siblings and heirs to the original producer, Albert R. "Cubby" Broccoli, stand to make tens of millions, though just how much they will earn compared with MGM will be affected by the revenue source (theatrical vs. home video, for instance), different box-office thresholds, etc. One finance expert estimates that, if the movie grosses $1 billion, MGM and Broccoli/Wilson together would partake in roughly $150 million in profits (with another $50 million going to Sony) before they even get to the far more lucrative ancillary revenue.
The cash comes at a key time for MGM and its CEO Gary Barber, who is plotting a possible initial public offering in 2013, after the first installment of the MGM-produced The Hobbit is released by Warner Bros. on Dec. 14. "This is very good for an IPO situation," notes analyst Harold Vogel of the Skyfall numbers. "I believe they can use this capital to tide them over when they don't have a Bond or a Hobbit movie." Having such phenomenal success with a franchise that isn't ending anytime soon "is important in putting any kind of a roadshow presentation together," he adds.
One person who won't share in the profits, however, is Daniel Craig. While sources say the Bond star made $17 million for Skyfall and is expected to receive bonuses for certain box-office milestones, he is not a gross participant and won't receive a piece of the backend. (The Broccolis famously do not offer backend to talent.)
But Craig, 44, likely will get a pay raise for Bond 24, which Skyfall co-writer John Logan is developing and will be the first in the franchise whose storyline spans two films. The actor renegotiated his deal after 2006's Casino Royale grossed nearly $600 million worldwide and is committed to at least two more outings as 007, but insiders expect a fresh renegotiation to take place.
That could leave Craig in the $20 million-plus zone reserved for Hollywood's very top stars.
Additional reporting by Alex Ben Block.