American Sniper shattered box office records last weekend. Credit: Time Warner.
If there were any doubts about the box office potential of Clint Eastwood's American Sniper, they're all but gone now. Adapted from the autobiography of the United States' most lethal sniper, Chris Kyle, American Sniper set multiple records with its wide theatrical release this past weekend.
Come to think of it, "destroyed multiple records" is a more apt description. Despite its more restrictive R rating, American Sniper's $89.3 million three-day domestic gross more than doubled the previous January weekend record of $41.5 million. The old high mark was set during the same weekend last year by Comcast (CMCSA +0.44%) Universal's PG-13 comedy Ride Along. American Sniper also achieved the highest four-day Martin Luther King Jr. Day weekend total at $105.3 million, and now stands as the biggest-ever winter weekend release, besting the February 2004 debut of The Passion of the Christ by over $5 million.
By contrast, most early projections only expected American Sniper to haul in about $40 million during its first three days in wide release.
A much-needed win
This is obviously great news for both Village Roadshow and Time Warner's (TWX +0.00%) Warner Bros., which co-financed and co-produced the film with a relatively modest $58.8 million production budget. As of this writing, American Sniper has nearly tripled that amount in global receipts, including roughly $27 million in foreign sales. Whether American Sniper ultimately garners the same phenomenal response from international moviegoers remains to be seen, but keep in mind it has yet to debut in over 30 countries.
For Time Warner, this solid start to 2015 should offset potentially disappointing fourth-quarter 2014 results reported from Warner Bros. next month -- if only on a relative basis. When Time Warner reported third-quarter earnings in November, management warned Warner Bros. was set to face a difficult year-over-year comparison driven by the late-2013 theatrical release of Gravity, as well as the home video releases of Man of Steel, Pacific Rim, and The Hangover Part III. In addition, investors were told to expect Warner Bros. to incur further restructuring charges of $100 million in the fourth quarter, related in part to its impending cut of roughly 1,000 jobs.
Why American Sniper will keep outperforming
Meanwhile, American Sniper isn't finished outperforming for Time Warner just yet.
First, polled audiences granted it a rare "A+" on CinemaScore, virtually guaranteeing American Sniper will enjoy sustained success at the box office thanks to both repeat viewings and positive word of mouth.
American Sniper should also benefit from a relative lack of hype surrounding other R-rated newcomers during its crucial first weeks, including Comcast Universal's The Boy Next Door this Friday and Open Road Films' The Loft on Jan. 30. In fact, arguably the first meaningful competition will come from the Feb. 13 release of 21st Century Fox's Kingsman: The Secret Service. By then, American Sniper will have gathered the lion's share of its box office total.
Of course, it also helps that Warner Bros. previously pushed a limited Christmas release to put American Sniper into Academy Awards contention. It nabbed six Oscar nominations the day before its wide release, including one for Best Picture. If American Sniper comes out on top when the winners are announced on Feb. 22, you can bet it will enjoy the fruits of a renewed boost of publicity.
Finally, don't forget Warner Bros. can almost certainly look forward to another strong home video release after the curtains fall. All things considered, it seems the only downside of American Sniper for Time Warner shareholders is the potentially tough year-over-year comparison it will create for Warner Bros. in 2016.
