Alcon Entertainment ‘got its (butt) kicked,’ stands to lose $30 million on ‘Transcendence’
Alcon Entertainment “got its ass kicked” financially with the weak box office performance of “Transcendence,” the company's top executive told TheWrap, saying that the company will lose at least $30 million as a result.
“I can say definitively that Alcon got its ass kicked,” co-president Andrew Kosove told TheWrap. “We've made 28 movies and we've never had anything like this happen before and I hope we don't again.”
Wally Pfister's directorial debut starring Johnny Depp grossed $10.9 million its opening weekend, far less than even the studio expected; that number should drop considerably this weekend with three new wide releases. Its current box office tally is $14.4 million domestic, according to Box Office Mojo.
Box office experts anticipate the $100 million movie will be lucky to hit $30 million in the United States.
“Brod and I lost a fortune on this,” Kosove added, referring to his business partner Broderick Johnson.
See video: Hollywood Torrent: Who Do We Blame For Johnny Depp's Box Office Flops?
It's a tough blow for a company that counts “The Blind Side” and “Prisoners” among its hits. Alcon is a reliable partner for Warner Bros., producing and financing a couple of modestly budgeted movies each year. Typically at least one of those has been a hit — “Prisoners” last year, “Dolphin Tale” in 2011, “The Book of Eli” in 2010 and “The Blind Side” in 2009.
The company has an uneven couple of years, releasing box office dud “Beautiful Creatures” the same year at “Prisoners.”
Alcon will be the one holding the bag on “Transcendence.” Those close to the project and those savvy in film financing say Alcon will lose between $50 million to $55 million on the movie, but Alcon insists it will only lose $30 million to $35 million.
The film had a net budget of $100.8 million, according to Alcon, which covered 60 to 70 percent of the cost before the movie opened. Lionsgate pre-sold the foreign distribution rights in most territories, which helped finance the movie.
Foreign distributors stand to lose a bundle, and Kosove has spent the past week assuring longtime partners and colleagues.
“I'm mortified and I feel terrible for our international partners,” he said. “That said, we've had quite a few successful movies that have made a lot of money for those people. I'm hopeful that it won't damage those relationships. I've personally reached out to many of them and accepted full responsibility.”
Alcon's losses will stem from the domestic performance, which it hoped would offset the remaining budget and cover the marketing spend between $30 million to $40 million. Warner Bros. fronted the money, but Alcon backstopped it, which means that it will cover any of Warner Bros.’ losses.
Alcon will not cover the marketing even after DVD and pay-per-view revenue are considered. How much it will lose on the domestic side is a matter of debate, but Kosove insists the final hit to his company will be no more than $35 million.
Alcon has some sequels on the horizon, including “The Sisterhood of the Traveling Pants 3” and “Dolphin Tale 2,” which could mitigate the risk.
Looking back on where “Transcendence” went awry, Kosove recalled the opposition of former Warner Bros. chiefJeff Robinov. Robinov told him not to make it. Yet another memory is just as strong: no one wanted him to make “The Blind Side” either. That movie grossed $309 million.
The difference? It had a budget of $29 million.
“If somebody came to you with a project that you believed was thoughtful and commercial, had Chris Nolan's Academy Award-winning cinematographer, a Blacklist screenplay and an international A-list star, wouldn't you take it?”