Ship Has Come In for Movie Exhibitors

Exhibitors across the globe are striking it rich on “Titanic,” the unstoppable film by Jim Cameron that has audiences pouring into their theaters like there’s no tomorrow. The three-hour, 14-minute epic has been the top-grossing film in the nation since its release two months ago, and it’s continuing to sell a lot of popcorn to a lot of repeat customers.

One ebullient theater owner, Sumner Redstone, gets the twofold benefit of being both the exhibitor as well as distributor of what is shaping up to be the highest-grossing movie of all time. The media mogul owns the privately held theater circuit National Amusements and has controlling interest in Viacom Inc., parent of Paramount Pictures, which co-financed “Titanic” with 20th Century Fox and is responsible for releasing the film domestically.

Moreover, Paramount owns the Famous Players movie circuit in Canada and has a half-interest with Universal Pictures in the overseas theater chain United Cinemas International, one of the largest multiplex outfits outside North America with 523 screens (74 theaters) in 10 countries.

“Titanic” is currently playing on about 15% of National Amusements’ 938 screens in the United States and on about a quarter of Famous Players’ 538 screens in Canada.

Redstone, who serves as chairman of both Viacom and National Amusements (which boasts an additional 233 screens overseas), said that his Dedham, Mass.-based circuit represents 6% of the country’s theaters and “the other 94% are having a good time. . . . ‘Titanic’ is definitely having a good impact on exhibition’s bottom line.”

Like everyone connected with “Titanic,” Redstone is flabbergasted at the picture’s staying power.

“This is something I’ve never seen in all my years, and I’ve been in exhibition a long time,” said the 74-year-old Bostonian, who joined National Amusements more than four decades ago in 1954. “ ‘Titanic’ is driving the industry right now in two ways. It’s motivating people to go to theaters and people who go to see our show and can’t get in are going to other movies.”

In a phone interview from his Los Angeles hotel room Thursday, Redstone said, “We are incapable of estimating even on a given day what this picture will do. I thought we were going to have the first $1-billion movie, but we’re not looking at $1 billion anymore.”

Industry experts are now estimating “Titanic” could take in $1.2 billion or more in worldwide box-office receipts before it plays out.

So far, the film has grossed $380 million in the United States and Canada and close to $450 million overseas, bringing its global total to more than $800 million. It’s expected to unseat Steven Spielberg’s “Jurassic Park,” which is the record holder with worldwide ticket sales of $914 million. Domestically, the film has already surpassed “E.T.’s” initial run of $359.2 million (with reissues its total gross was $399.8 million).

If “Titanic” has been a major windfall for exhibitors, it will be an equally huge payday for the film’s two distributors, who at the end of the film’s run will actually wind up with more like 50% of the box-office share, rather than the usual 45%-47% cut. (The strength of the film gave the studios the leverage to negotiate better deals.)

Between the two distributors, Fox--which financed the lion’s share of the production--will take home more of the box office than Paramount.

According to sources, the deal between the studio partners is structured as such: The proceeds are split 50/50 until Paramount recoups its production investment of $65 million.

At that point, Fox retains about two-thirds, Paramount a third, until Fox recoups its production outlay of about $135 million. (Each studio is also ponying up about $50 million in marketing expenditures.)

From that point on, Fox gets 60% and Paramount 40% of the revenues from all sources, including theatrical, home video, television and music) for the entire life of the picture.

Neither Paramount nor Fox executives would comment on terms of their arrangement.

Redstone denied any knowledge of the bad blood that’s been flowing between the “Titanic” partners ever since the production soared 100% over its original budget and wound up being the most expensive movie of all time at more than $200 million. Paramount capped its investment at $65 million, refusing to incur any overruns, which fell to Fox.

Tensions between the two studios recently intensified, with Fox contending that Paramount blew the television sale of “Titanic” by leaving potentially tens of millions of dollars on the table.

Fox’s beef is that Paramount prematurely sold the TV rights to NBC for $30 million in December without opening the bidding to other networks to drive up the price or without built-in escalators that would have tied it to the film’s box-office performance.

Paramount sources say Fox executives should be delirious with the deal since their own network didn’t even have enough confidence in the movie to warrant making more than a $20-million offer for the rights.

Redstone, who said he isn’t normally consulted on such transactions and wasn’t involved in the “Titanic” sale, denied rumors that he was livid about the deal.

“I’m satisfied they [Paramount executives] did a good job,” Redstone said. “Put it this way, I have no reason to believe they didn’t get the best deal.”

As for any friction between the two studios, the media chief said, “I don’t see it. I was chatting with Rupert [Murdoch, head of Fox parent News Corp.] two weeks ago about having lunch . . . and I’ve not seen a sign of this alleged bad blood.”

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Yet, according to one top Fox executive, the flap is escalating. Last Friday, the source said, Paramount lawyers tried to block the Fox network from airing a one-hour special tied to the movie, narrowly resolving the issue at the last minute.

You’d think that with all the money both Paramount and Fox will walk off with from “Titanic,” both parties would just shut up and be happy.

But that’s not the way Hollywood works.