Mangerial Acounting and the Movies

Friday Sept 1 2017

The movie business is famous for both spectacular success and failure. But really it is not so difficult if one takes a socionomic view of where the mood is and respond in kind. Or as Wayne Gretzky put it

I skate to where the puck is going to be, not where it has been

I would rather bet on say five movies with a ten million dollar budget than one with a $50 M budget. Our story today is just how Burt Reynolds and Clint Eastwood did just that back in the late 1970s. Congressional response to the energy embargo of 1972 was a national speed limit of 55 mph, simply a tax on the time of those who lived in the vast expanse of western and southern states rather than say Washington DC.

And then along came the Citizen Band Radio craze. People bought these things and exchanged information on air about where Smokey (the highway patrol) was likely to be using radar. Actually this was all a terrible idea which only caused deranged lower opinion of police officers.

Social Mood bottomed in December of 1974 when the DJIA hit 577. Rocky was the movie of the 1975, the perfect story of a loser who became a winner as America also picked itself up off the mat from the riots of the late 1960s. Watergate, the first energy embargo, gas lines, losing in Viet Nam, inflation, well it was a depressing period of negative mood from 1966 to 1982. Anyway things had improved enough by 1977 to have the perfect movie parody of a hapless Sheriff chasing the ever too clever fox played by then box office star Burt Reynolds. Reynolds got real life then gal friend Sally Field to co star and then country western singing star Jerry Reed. Click above for the theme song. And there were plenty of tire spin shots of the soon to be popular Pontiac Trans AM.

Results for Smokey and the Bandit, 1977

Box Office

Budget:

$4,300,000 (estimated)

Opening Weekend:

$1,728,060 (USA) (30 May 1977)

Gross:

$126,737,428 (USA)

Smokey And the Bandit II 1980

Box Office

Opening Weekend:

$10,883,835 (USA) (17 August 1980)

Gross:

$66,132,626 (USA)

So second time around it only returned 6x the budget, amazingly Burt and Sally were still together three years later

Smokey and the Bandit III

No budget figure shown but gross was only $5.6 million. By 1983 the social mood was improving, the stock market was stirring off its long slump and more modern comedy was finding a wider audience.

Meanwhile this low cost big grossing movie making was not lost on Clint Eastwood.

Rather than car chases he themes his two movies on fist fights. He to featured his then gal friend the no talent Sondra Locke adnd the usual group of actors he used i multiple movies. Did you notice he did that again and again using the same actors for both westerns and comedies? Less time explaining how he wanted things done and no big salaries for supposed stars, that's why. I wonder what the orangutan cost…

And Any Which Way But Loose debuted in 1978 with this result. That is a 20x return on the budget!

Box Office

Budget:

$5,000,000 (estimated)

Opening Weekend:

$10,272,000 (USA) (24 December 1978)

Any Which Way you Can debuted in 1980 with this result

udget:

$15,000,000 (estimated)

Opening Weekend:

$8,024,663 (USA) (21 December 1980)

Gross:

$70,687,344 (USA) (30 June 2012)

Not as rich as the first return but still a 8.5x return on budget

The managerial point here is

identify the mood of the audience

match the movie theme with the mood

in this case, don't take your self too seriously, America is ready for some pick up truck style entertainment

Note, Chuck Norris was popular making successful low budget movies at this time as well

Be ready for the mood to shift. Notice Clint did not make a third film which might lose money, Burt did

OH and at the same time a female producer was getting into the same genre with films like this

Foul Play grossed $44 million and I am guessing cost less than ten million

Professor Elam

recent posts

about