“This deal is getting worse all the time. “
Lando Calrissian’s statement about his arrangement with Darth Vader could well be on the minds of theater owners, given that they reportedly have to hand over a record 65 percent of the ticket take from The Last Jedi to Disney.
The contract to run the latest Star Wars film, which lands everywhere in just six weeks, also ups Disney’s take to 70 percent if the theater puts a foot wrong on a number of counts, according to a Wall Street Journal report.
U.S. theater owners are required to run the movie for four weeks without skipping a single screening if they want to avoid that penalty. They also have to run specific marketing promotions for the film exactly when Disney wants, and not a day early.
It’s an unusual clause, both in its duration (two weeks is more common for hit Disney movies) and its level of punishment — 5 percent of the Last Jedi gross could make the difference between profit and loss for many theaters.
Other blockbuster movies might give at most a 60 percent take to the studio, and even then the theater would usually get more after the first week or so. Internationally, a 40 percent cut is more common.
The Mouse House can issue these demands, of course, because it’s holding all the cards. While ticket sales for most movies are down across the board this year, Disney subsidiaries Marvel and Lucasfilm are turning out reliable hit after reliable hit.
And this isn’t the first time the promise of a Star Wars movie has been used as leverage with theaters. In 2002, George Lucas insisted theaters would have to install digital projectors if they wanted to screen Episode II. When 20th Century Fox distributed the original movie in 1977, theaters were forced to screen another Fox film, The Other Side of Midnight, if they wanted Star Wars. (Before the movie became a surprise hit, Fox insisted on the same deal in reverse: If theaters wanted Midnight, they had to agree to screen Star Wars.)
But in particular, The Last Jedi is likely to be a tentpole movie that makes other films look like, well, child’s play. Its predecessor, The Force Awakens, became the top grossing film of all time in the U.S. within the first three weeks of its release.
By the end of its run, The Force Awakens had grossed an incredible $937 million in American theaters and another $1.1 billion around the world. It was seen on more than 4,000 screens in the U.S., and some theaters kept showing the film until June 2016. Not bad, considering it opened in December 2015. If The Last Jedi does that kind of business, it will change a lot of bottom lines for a lot of multiplexes.
Put it like that, and Disney’s terms seem a little less onerous. Still, the Journal spoke to theater owners in smaller markets who said the economics of the deal just didn’t make sense for them, and they would not sign on for The Last Jedi. Why screen a movie for four weeks if everyone in your tiny town will have already seen it after week 2?
These are the breaks when you deal with an empire the size of Disney. They have altered the bargain, theater owners. Pray they do not alter it any further.