As the Independence Day holiday ended, the new box office week starting on July 9 saw three new films opening in North American theaters.
Paramount's fantasy comedy "Coneheads," starring Dan Aykroyd, known for "Ghostbusters," opened in 2,117 theaters.
Columbia Pictures' "Poetic Justice," a drama with an all-black cast, directed by John Singleton—who received an Oscar nomination for Best Director last year for "Boyz n the Hood"—starred Janet Jackson, Michael Jackson's sister. The story follows Janet Jackson's character, a hairdresser named Justice, as she strives to rebuild her life after her boyfriend is murdered in a revenge attack. The film opened in 1,365 theaters.
Fox's "Rookie of the Year," a fantasy baseball family comedy about a boy who accidentally gains super strength and becomes a baseball star, opened in 1,460 theaters.
By this point in the summer season, most of the heavyweight films had already hit theaters.
Including this week's three new films, there were no notable releases for the rest of the summer except for next week's "The Pelican Brief," a collaboration between Daenerys Entertainment and Warner Bros. This meant that without strong new releases to contend with, films released before July 9 that had good word-of-mouth and popularity could maintain impressive box office trajectories throughout the remaining summer days.
Thus far, only three films had been confirmed or were likely to join the $100 million box office club this summer: "Superman," "Sleepless in Seattle," and "The Firm."
Next week's "The Pelican Brief" was also a strong contender for the $100 million club.
Among them, "Superman" was a unique case that other Hollywood studios could only admire enviously. "Sleepless in Seattle" and "The Firm" were more typical successes.
Of course, all three $100 million films were produced by Daenerys Entertainment, and even though two were co-productions, Simon Westero's keen investment eye still left many feeling conflicted.
It's worth noting that many films this summer aimed to join the $100 million box office club.
Columbia's "Cliffhanger," Warner Bros.' "Made in America," Disney's "Super Mario Bros.," Paramount's "Addams Family Values," Columbia's "Last Action Hero," Columbia's "So I Married an Axe Murderer," and Fox's "Rising Sun"—all were either heavily invested blockbuster films, major game IPs, sequels to previous hits, or comedies featuring stars who had previously achieved high box office returns. In terms of project investment, cast, and marketing scale, all were aiming for $100 million at the North American box office.
Yet, the results were disappointing.
Films like Whoopi Goldberg's "Made in America" and Fox's "Rising Sun" fared decently, despite not hitting $100 million. They achieved respectable box office returns, ensuring decent profits for their studios. However, projects like Disney's "Super Mario Bros." and Columbia Pictures' "Last Action Hero," due to their huge production and marketing budgets, resulted in significant financial losses for their studios.
Ultimately, film investment remains a high-risk gamble.
With the advantage of foresight, Simon could secure the best projects, while other players could only rely on luck. This summer, Hollywood studios' luck was evidently not good.
Furthermore, in a limited market, Daenerys Entertainment's successful films inevitably suppressed the performance of others.
Without a blockbuster like "Superman," other studios might have had better luck. Films like "Cliffhanger" might have even reached $100 million in the North American box office. However, with a phenomenon like "Superman" dominating, many films' box office performances were significantly lower than their historical counterparts.
The most typical example was "Cliffhanger."
In the original timeline, the $70 million "Cliffhanger" earned over $80 million domestically and $250 million globally, just about breaking even and making a small profit.
This time, under the impact of "Superman," by July 8, "Cliffhanger" had only grossed $66.39 million, and its weekly box office from July 2 to July 8 had dropped to just $1.59 million, making it unlikely to reach even the $70 million mark before leaving theaters.
And this was just in the United States.
In the overseas market, "Superman" had a more pronounced impact on other Hollywood films.
Even without releasing in key markets like France and Germany, "Superman" had already grossed over $300 million overseas in the past month in countries like the UK, Japan, Spain, Italy, and Australia.
The capacity of the overseas market is also limited.
With "Superman" alone raking in over $300 million, and audiences' tastes sharpened by Daenerys Entertainment's meticulously crafted DC movie universe blockbusters, stars like Stallone and Schwarzenegger saw their new releases significantly underperform.
This time, Stallone's "Cliffhanger" had only grossed under $50 million overseas by early July, and was expected to just about reach $100 million globally. Thus, "Cliffhanger" would have around $70 million domestically and $100 million overseas, totaling $170 million worldwide.
Typically, a film's global box office needs to be about three times its production budget to break even.
With a global box office of $170 million, "Cliffhanger" couldn't recoup its $70 million production budget and hefty marketing expenses, forcing the studio to rely on VHS sales and other channels to slowly recoup their investment.
As for "Super Mario Bros." and "Last Action Hero," their outcomes were even more dismal.
In recent years, action films starring Arnold Schwarzenegger, Sylvester Stallone, and Bruce Willis had repeatedly flopped, increasingly making Hollywood aware that this genre was falling out of favor. In contrast, special effects-heavy blockbusters like the DC movie universe and the "Jurassic Park" series were seen as the future of Hollywood.
One DC movie universe film or "Jurassic Park" installment could generate enough profit to surpass the annual earnings of other studios.
Given the market demand, many software companies had recently ventured into developing film special effects software. However, compared to the early investments made by Daenerys Special Effects, they still lagged significantly.
For the foreseeable future, Hollywood studios wanting to create top-tier special effects films would essentially need to collaborate with Daenerys Special Effects.
Daenerys Special Effects had maintained an open stance towards external collaborations in recent years, but other studios weren't naive enough to believe Simon would fully open his doors to them. Any project posing a threat to Daenerys Entertainment would almost certainly be suppressed.
Moreover, even with the growth of its Australian special effects subsidiary, Daenerys Special Effects' current capacity was only sufficient to meet the needs of Daenerys Entertainment's own projects and some external collaborations. Other studios looking for exclusive support from Daenerys Special Effects for their films would find it practically impossible.
In terms of special effects films, other studios could only gradually catch up.
For now, they needed to focus on the present.
Fox was currently grappling with Arnold Schwarzenegger's new film.
This was a remake project based on the French film "La Totale!" titled "True Lies," about a federal agent who has to conceal his identity from his family due to professional reasons.
Fox had signed a contract with Schwarzenegger and James Cameron earlier this year while "Last Action Hero" was still in post-production. Schwarzenegger was to receive $15 million, the same as for "Last Action Hero," and Cameron's fee was set at $8 million, a top-tier director's rate.
Securing a contract with a studio before a film's release is a strategy many stars employ.
With a contract in hand, even if the previous project fails, they still have a chance for a comeback.
It also ensures they can secure the highest pay rate at their peak.
After all, the likelihood of a Hollywood film failing is much higher than that of it becoming a box office hit. Mike Myers' "So I Married an Axe Murderer," released during the Independence Day holiday, was a direct example. Myers had hoped to prove his box office appeal with this new film to gain more leverage in salary negotiations for "Wayne's World 3" with Daenerys Entertainment.
However, the result was that the $20 million "So I Married an Axe Murderer" only grossed $5.36 million in its first week. Columbia Pictures had given the comedy 1,731 screens, yet its per-theater average was under $3,000, dooming it to be pulled from theaters within two weeks. The film's total domestic box office was unlikely to exceed $10 million.
With a total production and marketing investment of over $30 million yielding less than $10 million in box office returns, Columbia's management was devastated.
Mike Myers had delayed signing the contract for the third "Wayne's World" to negotiate a higher salary, but the failure of "So I Married an Axe Murderer" left him with no leverage.
Schwarzenegger, in this regard, was much smarter.
Or perhaps it was because his $15 million fee left little room for further negotiation.
Securing a pay-or-play contract for his next project with Fox, guaranteeing full payment regardless of whether the film proceeded, was a strategic move.
However, Fox, as the cooperating partner, was in a tough spot.
The consecutive failures of "Cliffhanger" and "Last Action Hero" during the summer season made Fox regret signing a $70 million budget contract for "True Lies," especially knowing Cameron's reputation for exceeding budgets. Fox was certain that $70 million wouldn't be enough for Cameron.
Rupert Murdoch, more focused on expanding his television network and less interested in the high-risk, low-reward nature of film investments, saw Fox's film division remain lukewarm in recent years
. Projects like the blockbuster "Home Alone" series had been poached by Daenerys Entertainment.
Now, if the $70 million "True Lies" failed at the box office, Fox Studios president Joe Roth was sure he'd be out of a job.
Canceling the project would also mean a direct loss of over $20 million, considering the costs already incurred during pre-production and the principal actors' fees, which was not an option.
The best solution was undoubtedly finding a partner.
High-profile projects featuring top-tier stars are always closely monitored by major studio executives.
Even without his foreknowledge, Simon was familiar with "True Lies," and Daenerys Entertainment initially had a chance to acquire the film.
However, considering "True Lies" in his memory had an excessive budget of $115 million and only marginally profitable despite its box office success, Simon decided to pass.
More crucially, Simon had a strong aversion to the film's original lead actress, Jamie Lee Curtis.
Jamie Lee Curtis wasn't unattractive, but Simon couldn't shake the feeling that she seemed masculine. As a result, the famous dance scene in "True Lies" that made many first-time Hollywood film viewers blush and their hearts race was, in Simon's eyes, rather off-putting. When he first received the script, Simon didn't even bother reading it and immediately passed on it.
It wasn't a secret that Columbia Pictures had attempted to partner with Daenerys Entertainment on "Last Action Hero" the previous year.
"Last Action Hero's" dismal failure, contrasted with the success of films like "Superman," further highlighted Simon's keen investment sense.
Westero could not only identify hit projects but also screen out box office bombs.
Now, with Fox seeking a partner to share the risk of "True Lies," word quickly spread that Simon had also passed on this project.
Westero had rejected "Last Action Hero," and Columbia Pictures ended up with a huge loss.
Now, Westero had rejected "True Lies." What kind of film would this turn out to be?
Fox Studios president Joe Roth contacted several parties, including some foreign investors known for their willingness to take risks, but met with repeated rejections.
He had no choice but to turn to Daenerys Entertainment again.
Knowing that the studio was stuck with "True Lies," Rupert Murdoch personally called Simon several times. Despite News Corporation's considerable resources, a $70 million project loss was untenable. If it failed as spectacularly as Columbia Pictures' "Last Action Hero," Fox Studios would be severely impacted.
Simon wasn't keen on "True Lies," but he knew the project would be profitable overall.
After some negotiation, he reluctantly agreed to discuss a potential partnership with Joe Roth.
"True Lies" was scheduled for next summer. Daenerys Entertainment already had two projects, "The Dark Knight Rises" and "Forrest Gump," slated for next summer, which were enough to support the company's performance. They didn't need to add another film like "True Lies." However, with the 007 series on hold, MGM happened to need some blockbuster projects.
After making some minor adjustments to the "True Lies" script, Simon proposed his collaboration terms.
First, the project would be a joint effort between Fox and MGM, with each party covering 50% of the investment.
Second, Fox would handle domestic and international distribution, with a distribution fee of only 8%.
Third, Schwarzenegger's salary must be reduced; Simon was only willing to offer $10 million. Additionally, the project budget would be capped at $70 million. Any budget overrun would result in James Cameron's fixed salary being canceled, leaving him only with a 10% share of the project's net profits—if there were any.
Finally, and crucially, Simon would personally select the lead actress.
Besides the last point, the other terms were Simon's way of driving a hard bargain.
If the agreement were too easily reached, Fox or other Hollywood studios might suspect something.
By making tough demands and partnering only with MGM and Fox, it was clear Simon had little faith in the project.
As for the finalized terms, if Schwarzenegger refused to lower his salary, Simon was fine with that too.
Adhering to contractual obligations was important.
However, if the project failed, Schwarzenegger, who had taken $15 million twice but left studios with massive losses, would have a hard time in Hollywood. Lowering his fee would actually be a way of safeguarding his future.
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