Global Film Business 2013 explored – underpins Merkin’s 2014 – 2023 strategy

Screen Daily have released the epitome of studio performance in 2013 – which is topical given The Merkin Group’s newly expanded  footprint in the global tentpole film acquisition and distribution business.

Sony’s China box office swells 22%

Sony Pictures Releasing International (SPRI) top brass reported significant year-on-year gains in China in 2013 as the company registered its third biggest year overall at the international box office.

China was the stand-out of the BRIC markets and indeed the only one where box office increased from 2012 in USD terms – although Russia was virtually flat – as SPRI’s $212.7m haul gained 21.8% on $174.6m from the previous year. In terms of local currency, CNY 1.31bn climbed 18.5% against CNY 1.11bn in 2012.

The studio’s top five releases in China were Skyfall on $60.4m (CNY 376.8m), After Earth on $34.4m (CNY 211.2m), White House Down on $27.6m (CNY 169.4m), Elysium on $25.7m (CNY 156.9m) and The Smurfs 2 on $21.8m (CNY 133.6m).

The studio’s Russian box office reached $180.1m compared to $181.7m in 2012 for a 0.9% decline. The local currency equivalent delivered a 2.3% increase as RUB 5.8bn gained on the year-ago level of RUB 5.7bn. Russia delivered SPRI’s two biggest local language hits in the form of Stalingrad and Messenger From Heaven on $67.2m and $5.5m, respectively.

SPRI’s Brazilian take reached $75.2m against $136.1m in 2012 for a 44.7% drop, while the local currency BRL 167.23m total fell 36% against BRL 261.17m in 2012. Finally, $14.4m from India declined 64% compared to $40.1m in the year before. The local currency decline was marginally lower as INR 2.18bn in 2012 fell 63.3% to INR 799.18m.

Overall box office for SPRI releases in 2013 is projected to finish on $1.91bn by year’s end, which represents the company’s third best year behind $2.67bn in 2012 and $2.14bn in 2009.

The Smurfs 2 (pictured) was the key driver on $275m and Django Unchained came in second on $262.5m.

Elysium generated $192.7m, followed by After Earth on $183.9m, White House Down on $132.3m.

Cloudy With A Chance Of Meatballs 2 remains active on $125m, while Grown Ups 2 took $113.4m and Captain Phillips stands at $106.8m and counting.

Universal crosses $4bn global box office

Universal Pictures is expected to confirm this week its biggest year at the box office, with international set to finish on $2.58bn, worldwide on $4.01bn and North America on $1.43bn.

Despicable Me 2 on and Fast & Furious 6 were the studio’s two top performers on $553m and $550m, respectively. Despicable Me 2 is posed to become Universal’s biggest release in history and stands at $920.7m worldwide. Fast 6’s global tally reached $788.7m.

Universal’s local-language business experienced a 22% year-on-year box office climb in 2013. The top five local-language films generated $62.7m compared to $51.5m in 2012.

Argentinian smash Foosball from Oscar-winning director Juan Jose Campanella produced $20.1m, while Germany’s The Physician (Der Medicus) has climbed to $14m and Italy’s Colpi Di Fortuna $12m.

Chinese Zodiac generated $8.4m and Hanni & Nanni 3 $8.2m.

Warner Bros surges to first $3bn international box office

Warner Bros Pictures International (WBPI) is on course for an unprecedented $3bn-plus in annual grosses as combined 2013 box office from the US studios crossed $15bn.

WBPI is expected to confirm later this week a number in the region of $3.14bn for the calendar year and will sit atop the studios’ international pile after Disney executives confirmed their studio ended 2013 on $3.013bn.

Warner Bros Pictures International’s previous best result was $2.93bn set in 2010. The studio enjoyed success in 2013 with four releases that took more than $300m, led by The Hobbit: The Desolation Of Smaug, the dominant film of the holiday season on $424.8m and counting.

Gravity remains in play and has grossed $398.7m, while Man Of Steel amassed $371.8m, Pacific Rim $305.8m, The Great Gatsby $204m, The Conjuring $179.3m and We’re The Millers $118.8m.

Combined grosses for the six US major studios reached an estimated $13.93bn, rising to $15.18bn including Lionsgate, which must merit a place at the table every year now given that it has crossed $1bn internationally for the second consecutive year.

The previously reported studio international grosses in 2013 are: Fox International on $2.33bn, Universal Pictures International on $2.2bn, Sony Pictures Releasing International on $1.91bn, Paramount Pictures International on $1.36bn and Lionsgate International on $1.248bn.

The total international box office including foreign-language films and English-language films released by non-US distributors is expected to emerge in the coming days. In 2012 that number reached a record $23.9bn.

Disney crosses $3bn int’l BO

 Walt Disney Studios breached the threshold in 2013 for the first time in history and grossed a confirmed $3.013bn for the calendar year.

In a record year for Disney that has delivered new marks for international, North America and worldwide box office, the global number finished on $4.732bn through January 1 2014.

En route to the company record $3.013bn annual haul, Walt Disney Studios Motion Pictures International crossed $2bn for the fourth consecutive year in record time on August 22 2013, overtook the old record of $2.302bn set in 2010 on November 1 and crossed $3bn on December 31.

Marvel Studios’ Iron Man 3 led the way and finished the year as the industry’s number one film of the year on $806.3m internationally, number one in North America on $409m and number one worldwide on $1.215bn.

The international piece included including all-time industry box office marks in Malaysia and Vietnam, number two all-time milestones in Singapore and the Philippines, and record Disney grosses in China, Hong Kong, Taiwan and Thailand.

Monsters University (pictured) amassed $476.4m outside North America to rank as the fourth biggest film of 2013 and took $744.9m worldwide to place fifth. The North American tally reached $268.5m to rank number six of the year.

Current release Frozen has grossed $551.7m and counting at the global box office through January 1 2014. It reached $267.3m internationally through December 31 2013 and ranks as the biggest Disney Animation release in the UK and Russia.

The North American tally is $271.8m. The film set a Disney Animation opening weekend record, breaking the Thanksgiving holiday five-day opening weekend record on $93.6m and scoring $67.4m over three days.

Oz The Great And Powerful amassed $258.4m internationally, while the $493.3m global haul ranked 13th. The North American gross of $234.9m ranked ninth.

Thor: The Dark World is on a brief hiatus before the February 1 debut in Japan and stands at $426.2m through December 31 2013 to rank as the sixth biggest release of the year. The global gross reached $629m to rank ninth and the film took $202.9m in North America in 2013 for the 12th biggest release of the year and remains active.


Fox Int’l soars past $2.3bn  

 Top executives at the distributor said combined grosses for 2013 were projected to reach $2.33bn by the end of the year.

While 14% down on the 2012 result, the $2bn-plus tally marks the seventh time Fox International has crossed the threshold.

The Croods (pictured) led the charge on $333m, followed by The Wolverine on $284.5m, Life Of Pi on $262.6m, A Good Day To Die Hard on $238.8m and Turbo on $171.1m.

The first two DreamWorks Animation titles handled by Fox sandwich the top five and a Blue Sky Studios release, Epic, ranks sixth on $163.2m.

Rounding out the top 10 are Percy Jackson: Sea Of Monsters on $133.7m, Lincoln on $94.9m, The Heat on $71.9m and The Internship on $49.7m

FoxUS domestic  local releases generate $200m

 Twenty-five local-language films released through Fox International in 2013 gained approximately 10% on the same number distributed in 2012.

Including carry-over from a handful of 2012 tiles, the roster brought in a little under $200m over the calendar year compared to $177m in 2012.

Fox International Productions’ anime Dragonball Z was Fox’s top local language release in 2013 on $30.6m in Japan.

Next up was Break-Up Man on $24.6m in Germany, followed by Philomena in the UK on $16.9m.

Rounding out the top five were Feuchtgebiete in Germany on $16m and Gorko! in Russia on $11.9m.

Russia generated the most box office out of the BRIC markets overall for Fox International – local-language and Hollywood releases – on $216.3m for an 18% gain on $183.4m in 2012.

Box office in China dropped 79% from $365.2m in 2012 to $77.7m a year later, while India fell 41% from $89.3m to $52.7m and Brazil fell a marginal 3% from $116.7m in 2012 to $12.9m.

Lionsgate projects $1.25bn int’l year

Projected box office for all films released through Lionsgate International licensees in 2013 will reach $1.248bn, senior executives said on December 30.

The expected $1.068bn North American haul combines with international for a $2.316bn worldwide box office. This marks the second consecutive year the studio has grossed more than $1bn internationally and in North America and $2bn worldwide.

The top performer for Lionsgate, which has crossed $2bn worldwide, $1bn internationally and $1bn in North America in a calendar year for the second year in a row, is The Hunger Games: Catching Fire.

The Young Adult sequel is on course to reach $408m internationally for the 2013 portion of its ongoing run and by year’s end will have amassed at least $799m worldwide.

Now You See Me – Lionsgate’s surprise major hit of the year – generated $236m in international markets, followed by Escape Plan on $100m, Red 2 on $91.3m and Warm Bodies on $54m.

Hobbit most pirated of 2013

 Top 10 pirated films in 2013 also includes Django Unchained and Fast and Furious 6.

 The Hobbit: An Unexpected Journey was the most downloaded film from illegal pirate sites in 2013, according to blog TorrentFreak.

The first part in Peter Jackson’s adaptation of JRR Tolkien’s fantasy tale took more than $1bn at the global box office following its release in Dec 2012.

It generated an estimated 8.4m illegal downloads through BitTorrent networks.

Django Unchained and Fast And Furious 6 ranked second and third respectively.

Notable absentees included The Hunger Games: Catching and Man of Steel.

Gangster Squad is perhaps the biggest surprise in this year’s list, as it was poorly received by critics and proved disappointing at the box office.

The list shows that movie piracy remains popular, especially for films that are not yet available for download or streaming due to release delays.

Rank Film Downloads
1 The Hobbit: An Unexpected Journey 8.4m
2 Django Unchained 8.1m
3 Fast And Furious 6 7.9m
4 Iron Man 3 7.6m
5 Silver Linings Playbook 7.5m
6 Star Trek Into Darkness 7.4m
7 Gangster Squad 7.2m
8 Now You See Me 7m
9 The Hangover Part 3 6.9m
10 World War Z 6.7m

The data is estimated by TorrentFreak based on several sources, including download statistics reported by public BitTorrent tracker

Source : Screen Daily 2 January 2014

The Merkin Group  are  using their experience to identify and acquire a specific group of “target” films for  Film Acquisition Funds  SPV and partnership/s ( but herinafter referred to as the fund or proposed funds for expediency. It is our belief that, given the current state of the film business, that we have a  unique opportunity to leverage the strong relationships, knowledge and experience of both ourselves and our partners  to effectively and profitably acquire the international distribution rights to tentpole films  and realize a significant and consistent return for the fund through the management of the acquisition, marketing, distribution and exploitation of the Pictures.Furthermore it is also our belief that relationships, knowledge, experience and an exceptionally disciplined acquisition process, as well as the proposed structures are providing our investors with several unique advantages over our competitors thereby enhancing the overall probability of success and out performance of the  proposed Film Acquisition Funds.

This belief is based on immediate prior experience and financial success of both Sean Rothsey and other managers  and current negotiations with studios and networks globally . Personal relationships and an exceptionally  disciplined acquisition process dovetailed to the exploitation prospects have proven to be a successful formula in both bull and bear cycles over the past 15 years.

The Merkin Group have recently  been involved in the acquisition and distribution of tentpole films for Australia, New Zealand, China, Taiwan, Hong Kong, Spain,Italy, Norway,Sweden,Denmark, Finland, Iceland, Greenland, Mexico, Brazil and other Latin American territories.

 Sean Rothsey

About the core competencies and key strengths of the manager:

Sean Rothsey  has founded , run, or provided advice and assistance to public and private enterprises since the early 1980s and is a global specialist in Private Equity and Corporate Finance and Investment Banking,  with experience in Equity Capital Markets (including IPOs and reverse listings), property, agribusiness, manufacturing, shipping and logistics, data and technology solutions, information and communications technology, diversified financial services, online trading solutions, institutional wholesale & retail stockbroking, film acquisition, financing & distribution, media & entertainment ranging from start up to +A$1Billion. In addition through The Merkin Group ( including Pinefilm Pty Ltd, Merkin Pastoral Holdings Pty Ltd, The Rothsey Family Trust, Pinefilm Entertainment Pty Ltd, Horizon One Entertainment Pty Ltd,Revolution Entertainment Ltd and numerous partnerships its related entities have acquired and managed or distributed in our own right , or in partnership some 400 films across all rights in many territories. They have been attending film markets and festivals and Hollywood for almost 15 years and have strong film financing , sales agents, film production and studio relationships. They  have co distributed and worked with MGM , Warner Bros , Buena Vista, Disney, Fox, Sony , Universal,Madman, Becker Film, REP, Polygram,UIP  and all the major sales agents and producers. They are successful creators, funders and managers of investor pools.

Sean Rothsey has been a director of listed and unlisted private and public companies in Australia and NZ since 1981 and has also  been involved in the listing (IPO) or reverse listing (reverse takeover) and private placements of many companies in Australia , NZ  South Africa and London.

He is the immediate past chairman  and long time director of Australian Stock Exchange  listed diversified financial services company MDS Financial Group Ltd , whose subidiaries include an ASX Particpant (StockBroker) and a director  of three subisdiaries each holding Australian Financial Services Licenses issued by the Australian Securities and Investment Commission.As founding Deputy Chairman and director of NISER Ltd he has represented the National Stock Exchange , the Bendigo Exchange and the Taxi Exchange  and The Water Exchange in regional Queensland.

Also conversant with financial services regulations in Hong Kong , China  Sean and his network have particularly knowledge of  Funds Management structuring and compliance  in the Bahamas, BVI and the Cayman Islands.

The Merkin Group offer advisory and consultancy services in global business and asset management strategies including corporate governance,risk and compliance as well as facilitating outcomes through valued added solutions, introductions or capital.

The capital raising from third party investors is being  handled by BoxRED Corporate (a division of Merkin Pastoral Holdings Pty Ltd  ACN056384975) (“BoxRED”),  and can be distributed solely for information purposes and for the recipient’s sole use and cannot be further transmitted to third parties. It is and will be based on information provided by our client or third parties .

Investors will be provided with a document in their capacity of institutional and / or qualified  and/or professional and/or exempt investor(s).


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