Not even time-tested adventurers like Indiana Jones and Ethan Hunt are immune to the shifting sands of the movie business. Those action heroes, played by Harrison Ford and Tom Cruise, returned to theaters in Disney’s “Indiana Jones and the Dial of Destiny” and Paramount’s “Mission: Impossible — Dead Reckoning Part One,” with the hope that the potent combination of escapism and nostalgia would invigorate the box office. Instead, both films are among the summer’s most baffling disappointments, and much of that has to do with their outsized budgets.
“Indy 5,” which opened in late June, has grossed $375 million globally after six weeks of release, while “M:I 7,” which debuted in July, has generated $523 million after five weeks of release. Those ticket sales are respectable in the current moviegoing landscape, especially because the films are part of decades-old properties aimed at older audiences.
The trouble is that each sequel cost roughly $300 million before marketing spends of at least $100 million, making them among the most expensive movies of all time. After falling short of expectations, they could lose nearly $100 million in their theatrical runs, according to sources familiar with the financials of similar productions.
“These movies would have been a lot more economical if it weren’t for COVID,” says Shawn Robbins, chief analyst at Boxoffice Pro. “But even if that meant their budgets were inflated, at the end of the day, these movies cost what they cost and performed how they performed.”
Studio executives privately gripe that assessing a movie’s profitability purely on its theatrical results fails to account for what the film earns on demand and through cable and streaming licensing deals. Studios don’t provide complete information about how much money movies generate beyond their box office results. Still, there’s reason to believe that these revenue streams will ultimately make “Dead Reckoning Part One” and “Dial of Destiny” more valuable than their ticket sales suggest. Disney chief Bob Iger, for instance, recently told analysts that although the company was working to reduce the costs of the movies it produces, making “Dial of Destiny” contributed to a surge of interest in previous “Indiana Jones” films on Disney+.
“There’s an opportunity to make money back with streaming and other sales, but that’s long into the future. It’s playing the long game instead of the short game,” says Jeff Bock, an analyst with Exhibitor Relations. “They don’t want to be profitable in 25 years.”
As for “Dead Reckoning Part One,” sources familiar with the movie’s financial modeling say that it will break even if it can hit $600 million at the global box office. That would be over the film’s entire run, factoring in home entertainment and licensing revenue, and would include Cruise’s share of the gross. He remains one of the few movie stars who still get contractual bonuses before a film is out of the red.
But movies like “Mission: Impossible” and “Indiana Jones” are designed to generate windfalls on the order of $100 million. After all, the prior “Indiana Jones” adventure, 2008’s “Kingdom of the Crystal Skull,” pulled in $790 million globally and remains the franchise’s highest-grossing film, not adjusted for inflation. The previous “Mission: Impossible” entry, 2018’s “Fallout,” earned a series-best $791 million, while “Top Gun: Maverick,” which introduced a new generation to Cruise’s penchant for captivating, death-defying stunts, toppled the billion-dollar mark in 2022.
The stark reality is that blockbusters face a treacherous path to profitability. Take Universal’s high-octane “Fast X,” whose production budget was $340 million: Despite earning $704 million at the global box office this summer, that film barely crawled into the black and will post a modest profit, according to sources familiar with its financing.
All of this comes with an important asterisk. Production budgets for pandemic-era tentpoles ballooned due to release-date delays and COVID-related safety measures. All the while, the global box office is contracting as two major markets, China and Russia, remain uncertain at best and impenetrable at worst. On “Fallout,” for instance, China contributed $181 million to the gross, compared with $48.2 million for “Dead Reckoning Part One.” Thanks to a diminished international marketplace, movies of all shapes and sizes are struggling to reach pre-pandemic grosses. Only four movies (so far) in 2023, eight in 2022, five in 2021 and zero in 2020 have surpassed $700 million. That’s compared with 12 movies in 2019 and nine in 2018.
Sadly, films may not be getting much cheaper to make even though coronavirus-era restrictions have loosened. Hollywood’s dual labor strike, which has resulted in a work stoppage, means that several major titles set for 2024 and beyond could miss their release dates. Some studio executives estimate that the movies that were in production when actors hit the picket lines in July have seen their production costs rise by as much as $2 million a month.
But the box office has seen its share of winners too. And several of them don’t hail from a preexisting piece of intellectual property. Christopher Nolan’s “Oppenheimer” is going to be extremely profitable as ticket sales have crossed $650 million (and counting…) on its $100 million budget. Then there’s Greta Gerwig’s “Barbie,” made for a comparatively affordable $145 million, which has provided something fresh with its feminist-fueled look at the popular toy. It stands at $1.18 billion globally and will soon overtake “The Super Mario Bros. Movie” as the highest-grossing release of 2023.
“‘Barbie’ was made for under $150 million,” says Bock. “That’s the price point you want to see when you hit $1 billion at the box office.”
Warner Bros., which released the film, isn’t the only one profiting from its success. Margot Robbie, who brought Barbie to life on-screen and produced the movie, stands to make at least $50 million in salary and bonuses, according to three insiders. That’s enough to buy one hell of a Malibu DreamHouse.
