Batman never has it easy in the comics, but conquering the theater was supposed to be a cinch. Not this time. A shooting at an Aurora, Colo., multiplex on July 20 that left 12 dead and 58 injured cast a pall on The Dark Knight Rises during its opening weekend. Now, with 10 days on screen, it appears director Christopher Nolan's final entry in his three-film Batman epic won't live up to early box office hopes.
A heroic year at the box office
Here are the most recent numbers, offered in context:
10-Day Total (U.S.)
Total to Date (U.S.)
|Marvel's The Avengers (2012)||$373.1 million||$616.0 million||1|
|The Amazing Spider-Man (2012)||$159.7 million||$242.1 million||11|
|The Dark Knight (2008)||$313.8 million||$533.3 million||2|
|The Dark Knight Rises (2012)||$289.1 million||$289.1 million||8|
Source: Box Office Mojo. *Among comic book adaptations.
As an investor, these figures tell me three things:
- All hopes of The Dark Knight Rises surpassing megahit The Avengers have been dashed.
- Time Warner (NYSE: TWX ) subsidiary Warner Bros. will still take in hundreds of millions in profit.
- Comic book adaptations remain one of Hollywood's best box office draws.
On this last point, consider that the year's three major adaptations have already combined for more than $1 billion at the U.S. box office, and all three pictures are still showing in theaters. (Although, to be fair, only 84 multiplexes are still showing The Avengers, according to Box Office Mojo.)
Warner and Walt Disney (NYSE: DIS ) have the most to gain from the rising interest in comics-themed cinema and television thanks to their DC and Marvel subsidiaries. But of the two, Warner has more at stake because it doesn't have to share the cinematic rights to DC characters such as Batman and Superman. Disney, on the other hand, has handed over Spider-Man box office profits to Sony (NYSE: SNE ) and must share X-Men profits with News Corp. (Nasdaq: NWS ) .
Paying homage to the comics
Other than cashing in on video games -- the LEGO Batman games are leading Activision Blizzard's (Nasdaq: ATVI ) The Amazing Spider-Man on the charts as of this writing -- it isn't yet clear how Warner will make good on this freedom. But thanks to Nolan, DC Entertainment can get creative with how it handles Batman's theater appearances from here on.
Don't worry; I'm not about to spoil the film if you haven't seen it. All I'll say is that the movie has an open-ended conclusion that should allow the next team -- whoever that may be -- to pick up where Nolan left off without needing to "reboot" the story, as Sony did when it retold the origin of Spidey in The Amazing Spider-Man.
To me, Nolan's final bow is the cinematic equivalent of a writer-artist team ending a "run" on a particular comic book. The new team enters and then builds upon or alters what's come before, creating a new and (hopefully) good story arc that lasts another 20 or so issues.
Here, the arc opened with Batman Begins, rose to a crescendo with The Dark Knight, and concluded with The Dark Knight Rises. My guess is Warner wants another trilogy with another director with a vision worth exploring.
The big profit picture
How soon before Warner and DC Entertainment announce a new project is up for debate, but I'm expecting to hear something by next year's San Diego Comic-Con. Here's why:
Time Warner Metrics
|Gross U.S. box office||$1,432.3 million||$1,785.7 million||$353.4 million|
|Batman film as a % of box office||14.3%||29.7%||15.4 percentage points|
|Film and TV subsidiary operating profit||$885 million||$823 million||($62 million)|
Sources: TheNumbers.com, S&P Capital IQ.
The lesson? Having more films matters, but volume doesn't always mean much when it comes to operating profit, especially when you factor in the impact of not having a Batman film in theaters.
In 2007, Warner released 33 films; three -- Harry Potter and the Order of the Phoenix, 300, and I Am Legend -- each took in more than $200 million at the U.S. box office. Bona fide hits, all, that resulted in $1,431.5 million in gross box office receipts.
And how did those performances impact earnings? Film and TV operating profit came in at $845 million in 2007, down $40 million from two years earlier when Batman Begins debuted alongside Harry Potter and the Goblet of Fire and Charlie and the Chocolate Factory.
The very next year, Warner released two fewer films with only one earning at least $200 million at the U.S. box office. But that one hit turned out to be The Dark Knight, a blockbuster that broke box office records that have since been broken again, by The Avengers. So even with its litany of 2008 losers, Warner's Film and TV operating profit declined by just $22 million. Call it proof that, just as in stock investing, one megahit usually makes up for a lot of also-rans.
While there's no formula for predicting exactly what will make for a Hollywood megahit, Warner executives know from history that Batman is capable of drawing large audiences. Nolan's epic run at the franchise may be over, but when it comes to the comics and the movies the Dark Knight is still and ever will be rising.
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