[Chapter 114: Step Up Revenue Sharing]
It was not the first time for the four of them to play, and after nearly two months of not seeing each other, plus the boost from the party's fine wines and the success of their movie, their game became exceptionally spirited and intense.
Naomi, Halle, and Tyra let loose, fully displaying their charm with a blend of tenderness and wildness. Linton took on the challenge of three against one with fearless courage. The room echoed with laughter and song, full of lively energy, keeping them up all night.
...
The next morning at breakfast, Halle and Tyra reminded Linton about the last Universal studio celebration party where he had spun away from them secretly to be with Sharon Stone. They demanded compensation -- that Linton spend the entire day with them again at the hotel. Naomi looked at Linton with hopeful eyes as well.
Considering it was Sunday and how great the experience of playing together had been, not to mention the three women's popularity rising sharply due to the movie's blockbuster, all of which greatly helped his ability, Linton happily agreed.
Of course, they could only stay for one more day since Linton had to be busy on Monday, and Naomi, Halle, and Tyra also had engagements to attend to continue building their own fame.
The three women had heard that Linton's film company was preparing new projects, especially Step Up 2, and eagerly asked if he had roles that would suit them.
Linton was honest, saying that Step Up 2 would feature all-new younger actors, and there were no matching roles for them in this or the other two upcoming movies. However, he promised to inform them immediately if any suitable roles arose.
He also advised Naomi that the film Sleepless in Seattle was a premium Hollywood project, with Tom Hanks confirmed as the male lead, urging her to seriously pursue the lead female role.
...
They continued the fun games with intense enthusiasm. Despite facing three opponents at once, Linton's robust body kept him competitive, growing braver and stronger with every round.
Even meals were served in the room by the hotel, and the camaraderie and spirited "battles" didn't pause until Monday morning. To thank the three ladies for their company, Linton gifted them a generous amount of his energy.
---
On Monday morning, Linton arrived at Universal Studios with Robert, Henry, Mary, and Goodman to settle the Step Up movie's revenue. Levitt escorted them to president Lou Wasserman's office.
Besides the secretary, a lawyer and an accountant stood by. On the desk, a bottle of champagne was ready.
The secretary placed several thick files before them.
The revenue breakdown for Step Up consisted of four parts:
First was the box office share. The movie generated approximately $127 million before leaving theaters. Based on the tiered revenue-sharing agreement between Universal and theaters, and the weekly box office distribution, the final share was about 55%, netting Universal roughly $69.85 million. After distribution fees of $31.75 million, Linton's production company's share was $38.10 million.
Second was the TV rights. Universal had sold 7-year broadcasting rights; public TV's 7-year rights fetched $6 million, and cable TV another $5 million, totaling $11 million. After seven years, the rights would be renegotiated. Universal took $2.2 million per the distribution agreement, leaving $8.8 million for Linton's company.
Third was the video rental and sales rights. Universal sold the 7-year rights to Master Video. Thanks to Linton adding a director's cut, the base transfer fee reached $12 million, plus a 30% share of rental and sales. After seven years, these rights would be renegotiated again. Universal deducted $2.4 million from the base transfer, and Linton's company received $9.6 million. The rental and sales shares were settled quarterly, split equally at 15% each.
Fourth was merchandise: only T-shirts and baseball caps sold during the movie's run. North American sales reached $56.5 million, with a profit of $21 million after costs. Based on the distribution agreement, each side earned $10.5 million.
Universal was also planning specialized zones and business partnerships using Step Up licenses, with pricing details to be discussed later.
Adding these together, Linton Studio's total revenue was $67 million, plus the quarterly 15% share of video rental and sales.
Universal estimated video sales this year wouldn't fall below 2 million units, at $35 each, totaling $70 million, making the 15% share over $10 million, not even counting video rentals.
...
"Boss, don't worry. Everything checks out," Henry and Mary confirmed quietly to Linton after thorough verification.
Linton signed on the files, and Levitt poured several glasses of champagne. Lou Wasserman personally handed one to Linton. "Pleasure doing business with you."
"Pleasure doing business!"
"Cheers!" They raised their glasses and cheered loudly.
It was a win-win, with huge returns.
...
Linton's investment was under $10 million, yet he had established himself as a top Hollywood director and star.
Counting soundtrack and advertising revenues, the studio's income reached $89.12 million.
This excluded future soundtrack revenue settlements, overseas income, quarterly video rental shares, forthcoming merchandise income from Universal Studios, and Linton's personal music royalties.
...
Universal also profited greatly. After a low-risk $10 million investment, their returns were nearly equal to Linton's.
Moreover, this movie's distribution helped Universal break out from the bottom seven box office performance studios in Hollywood.
Unexpectedly, MGM had the worst performance, even behind Columbia. Universal was likely to rank third from last, boosting morale among management.
...
Linton knew Hollywood's usual tough negotiating style meant these funds arriving at Universal were one thing, but getting the producer's proper share quickly was another. Settling within six months was already fast.
Grateful to Lou Wasserman and Levitt, Linton presented scripts and project proposals for Step Up 2, Speed, and The Shallows.
"These are three films my company has approved for production. Let's discuss specific cooperation."
*****
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