'Twilight' important for Summit
First-year company has seen highs and lows in 2008Much of the conversation about potential Summit Entertainment breakout "Twilight" has centered on the future of the franchise.
But it also is the future of Summit that depends in some ways on "Twilight."
Rob Friedman and Patrick Wachsberger's company had a start in 2008 that, while in line with that of many first-year companies, didn't always outperform at the boxoffice. Midrange productions like "Never Back Down" ($25 million domestic) and acquisitions like "Penelope" ($10 million domestic) did decently, while "Sex Drive," the R-rated comedy with a sizable marketing budget, significantly underperformed, taking in $8 million in U.S. ticket sales.
The overall Summit model, which does have advantages such as a lucrative international sales business, also has limits; it lacks, for example, a pay-TV deal to supplement theatrical revenue.
That ups the boxoffice pressure on "Twilight," a production that's believed to have cost in the $40 million-$50 million range (Summit officially pegs it at $37 million), to earn big not just on opening weekend but into December.
And because Summit's upcoming movies -- including the Dakota Fanning sci-fi tale "Push," the Nicolas Cage thriller "Knowing" and the Toronto pickup "The Hurt Locker" -- have appealing elements but are unlikely franchises, it puts even more eggs in the "Twilight" basket.
"Anytime you have a possibility of a franchise, that's the holy grail," said Friedman, noting that even an opening-weekend figure of $20 million, on the very low end of the expected range, would put the company at the break-even given Summit's revenue streams in areas like home video and foreign sales.
Many in the industry believe that given marketing costs, an opening in the $35 million-$40 million range -- and a domestic theatrical cume of at least $75 million -- would be the demarcation for a success; it would have to exceed that to help pick up the company's weaker performers this year.
"Twilight" also could influence things on the financial side. Summit relies on a revolving credit facility of $500 million led by Comerica and other banks. Like other entities, it can borrow at discounted bank rates in proportion to the take of new films; if it wants to borrow more money than the projected earnings for a movie, it must do so at higher equity rates. "How a movie like 'Twilight' does affects the kind of access a studio will have to money," one film finance expert said.
If the movie breaks out, Summit also would look to create a sequel based on Stephenie Meyer's second book, "New Moon."
So what are the prospects? Director Catherine Hardwicke said that she believed "Twilight" would have to earn better than $100 million to assure that; industryites offer a lower number.
Summit is readying the guns at any event. Screenwriter Melissa Rosenberg has been signed on for two more movies. The actors are locked into long-term deals that could bring them back for two more movies.
Friedman said the company will decide this weekend whether to go ahead with another picture. The industry will weigh in on Summit not long after that.