Avengers Cashgame

Avengers Cashgame: Just how much money will this film MAKE?

The box office for Avengers Endgame seems to know no bounds. It smashed records in every category. By the end of its third weekend of release, Endgame was on track to break both Domestic and Foreign Box Office records.

Yet a movie can have a lot of Box Office but still be unprofitable if the costs are too high. Avengers Endgame certainly took a lot to make and market. Yet the receipts are so high that the film will definitely earn a profit. But just how much? Well, a gargantuan amount. A truly incredible amount. So let’s have a look at the question, just how much money will Avengers Endgame make?

There’s four major categories of rights that earn a film money: theatrical, video, pay TV, and free TV. Right now we only know the box office, and that isn’t even done yet. But we can project out the rest and had a good idea how much Disney will walk away with.

First up, theatrical. In the domestic market, films earn on average 55 percent of box office as film rental back to the studio. That’s just an average, though. The percentage is a negotiation with each theater chain, and varies week by week. For many films it’s not worth the effort to break out when doing high-level analyses. In this case, though, it does.

Endgame’s well above average anticipated box office means that negotiated film rental was also higher. That’s pegged at 70 percent for week one, 65 percent for weeks two and three, then dropping off to the historical average for the remaining theatrical release. Using that, we come up with the following:

Domestic Week 1 Week 2Week 3Ult.Box Office 474 187 100 250Film Rental 332 121 65 138

Total film rental expected from domestic is 665 million. Note that “Ult.” is for the remaining anticipated (“Ultimate”) box office.

Foreign is a bit more tricky. Far and away the best market for box office is China. It’s also the worst for film rental. The Chinese government has its fingers in every company, and their attitude is “take it or leave it.” Given the vast size of the Chinese market, studios have been glad to take it. To date the Chinese market has returned 625M in box office and has a remaining life of about 150M for a total anticipated box office of 775M. But the film rental here is only 20 percent. That’s still worth 155M—a good reason why Disney was glad to take it!

From the rest of the world there are a few markets that are more developed than others. Countries such as the UK, France, Germany, Japan, and Australia return more box office to film rental than others, although not quite as much as the domestic market. Those are expected to return 50 percent. Box office so far is 308M, with another 100M expected. This gives a total film rental of 204M.

The rest of the world will return less, but given the known big hit that Endgame represented, these will return a higher than usual film rental of 45 percent. Those countries have 829M in box office to date and can expect 200M more, for a box office of 1029M and film rental of 463M.

Adding it all up, we get:

Box OfficeFilm RentalDomestic 1,060 683Foreign 2,212 822Total 3,272 1,505

A quick look at the record books will show that this means Endgame will be the highest ever box office for both domestic and foreign. Given what the film has done already, this seems likely.

Let’s compare the film rental against cost. The cost to produce Endgame has been variously given as 350M, 400M, and also as down-to-the-million of 356M. That seems a bit low, given all the special appearances and the effect, so let’s go with the higher figure of 400M.

For marketing, comparables help. Infinity War had a marketing spend of $150M, Spider-Man $140M. Endgame was substantially more heavily promoted. Let’s take an estimate of $250M here.

Total Film Rental: 1,500MCost to Make/Market: 650MProfit: 850M

That’s right, Avengers Endgame will earn close to a billion dollars for Disney from theatrical alone.

But, that’s not the end! We’ve still got video, pay TV and free TV. Most films don’t reach profit until well past their theatrical run, usually close to the end of video. That makes this film’s achievement even more incredible. It also means that video will be pure profit for Disney.

How to project those receipts? There is expected to be both an Amazon and iTunes release in August. Netflix is conspicuously absent, as Disney is asserting rights to its own films for Disney Streaming. Streaming is in a squishy area between video and pay TV. We’ll include it in video here. However, the big deal will be disc sales. Given the highly anticipated nature of this film, plus the many details for fans to watch for, sales of the movie on disc will rival the theatrical release. Usually the overall take for video about equals the film rental, but because the film rental percentages were higher, we’ll give video a small haircut and call it 80 percent of the film rental for $1.2 billion.

Pay TV should pick up another 300M from sales to traditional cable stations over several cycles. Free TV, sales to broadcast stations or networks, about the same for a total of $600M.

Taking the aggregate:

Theatrical: 1,500MVideo: 1,200MPTV/FTV: 600MTotal: 3,300MCost: 650MTotal Profit: 2,650M

Two and a half billion dollars from one film! It’s the juggernaut that will keep on giving as the Marvel Cinematic Universe continues. This is the franchise to beat all franchises.