In a February 2nd conference call with Rupert Murdock, the Chairman and Chief Executive Officer to New-York based News Corporation admitted that movies directed by James Cameron had a tendency to go over budget; but, his decision to hedge much of the risk for “Avatar” out to other investors has ended up with the media mogul making a very expensive investor’s mistake.
After all, once history’s highest-grossing film is released on DVD and pay-to-view television, it is projected to earn $350 million to $400 million for Murdock’s corporation. This sum alone is only 40 percent of the 1 billion-dollar cut that Twentieth Century Fox and “Avatar” investors are expected to earn, an astounding total that equals News Corp.’s average quarterly operating profit from 2009. So, as it turns out, instead of getting the whole cake, Mr. Generous gave New York-based Dune Entertainment LLC a 40 percent cut, and London-based Ingenious Media Holdings PLC the left overs.
But News Corp hasn’t made a public profit forecast for James Cameron’s “Avatar,” so analysts have been left to their own devices to estimate a profit margin. Projections go from a low of $380 million in a proposal by Soleil Securities’ Alan Gould, to a high of $737 million, as proposed by Anthony DiClemente, a Barclays analyst who also considered another $220 million dollars in distribution during his calculations.
There’s no reason to doubt that Murdock is disappointed with his doubting James Cameron’s vision of Pandora, since Box Office Mojo reported that the film has generated a whopping $2.64 billion in worldwide ticket sales as of Sunday, March 14th.
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