This is called leverage to the highest degree. Knowing that audience demand for Star Wars Episode VIII: The Last Jedi is at a fever pitch for the December 15 release, Disney is getting distributors to sign agreements that will give away a whopping 65 percent of ticket sales to the entertainment giant.
According to a WSJ report, this is “a new benchmark for a Hollywood studio”, since the typical split for the production house is about 55 percent in the United States, down to 40 percent overseas, on average. The biggest hits can command up to 60 percent, but 65 percent is unprecedented.
The other terms of the agreements signed with theaters are equally tight: individually watermarked contracts to be signed, the movie to be shown only in the largest auditorium for a minimum of four weeks, and no marketing until Disney gives the go-ahead.
What’s more, if a theater violates any terms of the distribution agreement, Disney can charge them an additional 5 percent on the take, pushing the studio split to an unheard-of 70 percent!
That’s the kind of power that only studios like MGM wielded in the 1930s, according to one film buyer.
Interestingly, this is not the first time Disney has gone over 60 percent. Some of the Star Wars franchises have gone up to 64 percent of ticket sales and two weeks in the theater’s largest auditorium, according to SlashFilm.
Some of the smaller theaters have decided against carrying the film when it releases before Christmas. Theaters with a limited number of auditoriums, for example, wouldn’t want to be tied in to a four-week deal that doesn’t allow them to play anything else during that time.
This kind of leverage has never been used by a Hollywood studio, but then, it’s Star Wars after all, and Disney is clearly squeezing every last drop of audience appetite for the franchise. Moreover, Star Wars is not the only strong card in Disney’s hand. With the Marvel Universe and its own string of animated hits, Disney is in a stronger position than anyone else to command such ticket sales splits.
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Featured Image by Disney