Anatomy of the deals: Last Cab to Darwin
Jeremy Sims’ Last Cab to Darwin will break even theatrically in Australia and New Zealand after grossing $8 million and will start to repay investors from ancillary sales.
After recouping the advance and P&A, Icon Film Distribution expects to see a margin of about $1 million over the film’s 15-year licence period, and it says the investors can expect to get a similar sum.
That’s according to Screen Australia’s Screen Blog which gives a rare, if not unprecedented, insight into the intricacies of the deals, costs and revenue streams.
Produced by Greg Duffy, Lisa Duff and Sims, the film's budget was nearly $4 million. The producer offset was worth nearly $1.3 million. Screen Australia invested $1.1 million, representing 27.55 per cent of the budget; Screen NSW chipped in $250,000 and the SAFC $68,000.
An additional $100,000 in a regional filming grant came from Screen NSW and $100,000 from the Northern Territory government, while Cutting Edge and Nylon Studios contributed undisclosed amounts as well as handling post.
Icon spent $1.3 million on P&A after the release expanded to 350 screens after putting up a distribution guarantee of $200,000 plus a further $100,000 after B.O. receipts passed $4 million.
Of that $8 million less $800,000 in GST, two-thirds was kept by exhibitors. That left $2.3 million from which Icon took its distribution fee of 35 per cent.
From the remaining $1.56 million, the producers’ share, Icon will recoup its P&A and DGs and then pay the producers overages.
Screen Blog reveals the producers – as a sweetener – gave the private investors, who provided nearly 20 per cent of the budget, an accelerated recoupment position from a share of the offset.
The international sales agent Films Distribution put up a DG of just $80,000 for the rest of the world. Duff told Screen Blog, “It was a struggle to get a sales agent at script stage. We approached about 15 and only got one bite that was acceptable.”
Icon CEO Greg Hughes told the blog, "Film distribution is a very high risk business and these days films have to break even theatrically or come out with a small deficit. It is a fairly rare occurrence to have overages from theatrical – which is why we’re willing to talk about this film."
The title goes out on VOD and DVD next month and Foxtel has the exclusive first pay-TV window through its output deal with Icon.
Hughes expects $1.5 million in wholesale DVD revenues plus about $1 million from pay TV, VOD and SVOD (there are no deals yet with streaming services) and perhaps $75,000 from hotels and airlines over the life of the film. A free-to-air sale could be worth $100,000.
He added, “It is difficult to predict what revenue will come back from ancillary markets over a lengthy time period but at the end of 15 years Icon expects to have made a contribution margin of about $1 million. I expect the producers’ share to be a similar figure.”
Hughes tells IF, “That is not profit, it is proceeds from the film which will be cash inflow into our business.”
As for why he decided to share figures which are usually proprietary, he said, “At a time of rapid change and disruption there has never been a greater need for more collaboration and sharing information.”
Duffy summed up the bottom line prospects: “The rough rule of thumb is that you have to make three or four times the budget of the film before everyone recoups all of their investment. In our case, that would be at least $12 million. However, for our private investors, because we have given them an accelerated recoupment, they will probably fully recoup when the film reaches $10 million. That may happen if it does well in ancillary markets and if it does well internationally, especially if it is released theatrically in some territories.”
See the full story in Screen Blog: http://thescreenblog.com/screenintel/reality-check-last-cab-to-darwin-the-numbers/