‘Hunger Games’ to Fuel $400 Million Profit for Lion Gate
“The Hunger Games: Catching Fire,” the film sequel about teens fighting to the death in a totalitarian world, is set to dominate cinemas for three weeks and earn $400 million or more for Lions Gate Entertainment Corp. (LGF)
The movie, with Jennifer Lawrence returning as heroine Katniss Everdeen and Josh Hutcherson as her co-combatant Peeta Mellark, opens in theaters worldwide today and is forecast to take in $166 million domestically this weekend, according to BoxOffice.com. That would give Lions Gate one of the top five debuts ever, based on rankings from Box Office Mojo.
Lions Gate could earn more than $400 million from “Catching Fire” over several years through its share of ticket sales, DVDs, pay television and free TV, according to Benjamin Mogil, an analyst at Stifel Nicolaus & Co. The film’s futuristic setting, the appeal of the young characters and a story about rebellion against an oppressive government should attract a wide swath of movie fans.
“When you look at the tracking, it’s for everyone,” said Greg Foster, senior executive vice president of Imax Corp. (IMX), which will show the film on all of its 650-plus screens for three weeks, including almost 350 in the U.S. and Canada. The film is opening in a total of 4,163 North American locations, according to Rentrak Corp. (RENT), including screenings last night.
“Catching Fire” underscores Lions Gate’s dependence on blockbuster movie franchises, particularly since the last of five “Twilight” teen-vampire films concluded its cinema run. The shares have more than doubled this year, after gaining 97 percent in 2012.
The movie grossed $25.3 million in early screenings last night, the company said. An opening of $166 million would put “Catching Fire” fourth on the weekend all-time list behind “Marvel’s The Avengers,” “Iron Man 3” and “Harry Potter and the Deathly Hallows Part 2,” the current No. 3 at $169.2 million, according to Box Office Mojo. (See table below)
“Catching Fire,” based on the Suzanne Collins novel, garnered an 89 percent favorable rating on RottenTomatoes.com, which aggregates critics’ reviews. The film picks up where “The Hunger Games” left off, with Everdeen and Mellark touring the fictional nation of Panem after winning the 74th Hunger Games.
They inadvertently become symbols of rebellion and are forced to compete again, this time against more deadly foes -- former winners like themselves. Donald Sutherland again stars as President Snow, and Woody Harrelson and Stanley Tucci return in supporting roles. Lawrence, 23, won the best-actress Oscar this year for “Silver Linings Playbook.”
Lions Gate declined to comment, according to Peter Wilkes, a spokesman.
Tickets sales for “Catching Fire” in the U.S. and Canada could amount to $425 million over the full theatrical run, said Mogil, who recommends buying shares of the Santa Monica, California-based studio. He estimated the production cost at about $90 million, including any tax subsidies, and said his multiyear profit estimate for the picture excludes provisions for corporate expenses or taxes along the way.
The first film, released in March 2012, generated $408 million in domestic ticket sales, according to Box Office Mojo, an industry researcher.
More revenue from Imax theaters will contribute to sales of the 146-minute picture as some fans choose the exhibitor’s higher-priced, big-screen format over conventional cinemas, Mogil said. At Fandango.com, the online sales service, tickets for Imax shows at the AMC Century City 15 in Los Angeles are $19, compared with $14 for a typical screen. The service said advance sales are the highest for any picture this year.
“The attendance hasn’t really changed, the average ticket price hasn’t changed, but you’ll move some people from 2-D to 2-D Imax,” Mogil said.
Director Francis Lawrence used Imax cameras for a number of shots, including arena sequences, and the scenes will expand vertically in the specially equipped theaters in what Foster called “an amped up version you can’t get anywhere else.”
“Catching Fire” may lead the box office for three weeks, including Thanksgiving weekend, until “The Hobbit” sequel opens on Dec. 13, according to Phil Contrino, chief analyst for researcher BoxOffice.com.
Walt Disney Co. (DIS) is releasing two films: “Delivery Man” this weekend, a Vince Vaughn comedy from DreamWorks Studios, and “Frozen,” an animated feature going into wide release on Nov. 27. Strong word of mouth for “Frozen” could lead to an upset, Contrino said.
Social media and Internet buzz are also giving “Catching Fire” a boost. “Likes” at Facebook.com amounted to 11.6 million earlier this week, Contrino said, compared with around 2.9 million for the first film. At Twitter.com, tweets were running 12 to 1 positive over negative, he said.
The movie’s best prospect for growth is outside the U.S., where sequels tend to do better, according to Mogil. Foreign sales may be as much as $450 million, he said. The first film generated $283.2 million internationally, or 41 percent of the total, according to Box Office Mojo.
“This has a chance of getting to 50-50, foreign box office equal to U.S. box office,” said Matt Harrigan, an analyst at Wunderlich Securities Inc. in Denver who also recommends buying Lions Gate. “It will do as least as well as the first one in the U.S. and materially better overseas.”
The studio is spending generously to promote “Catching Fire,” according to Harrigan, who estimated the marketing budget at close to the film’s production cost.
Lions Gate is known for hedging its risks on high-cost pictures by selling foreign rights in advance, as it did with “The Hunger Games” and more recently “Ender’s Game.” With “Catching Fire,” the studio has terms that provide for more generous returns.
“The international deals are better,” Mogil said.
A third movie from “The Hunger Games” will be in theaters next November and the fourth a year later, according to Box Office Mojo.
Next year, Lions Gate releases “Divergent,” mining a similar vein with a young female character challenging an authoritarian leader. The picture, scheduled to open in March, is based on the novel by Veronica Roth. It features Shailene Woodley, who garnered favorable notices in “The Descendants,” and Kate Winslet.
“I would be shocked if it did as well as ‘The Hunger Games,’” Harrigan said. “Everyone realizes how difficult this franchise is to replicate. Management will be first to tell you that is too high a bar.”
Top Domestic Film Openings Opening Film Studio ($ Mil) Date Avengers Disney $207.4 5/4/2012 Iron Man 3 Disney 174.1 5/3/2013 Harry Potter Warner 169.2 7/15/2011 Hallows Part 2 Dark Knight Rises Warner 160.9 7/20/2012 The Dark Knight Warner 158.4 7/18/2008 Source: Box Office Mojo
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