November 29, 2021

Huge Summer for Hollywood, but With Few Blockbusters

Ticket revenue in North America for the period between the first weekend in May and Labor Day totaled $4.71 billion, a 10.2 percent increase over the same period last year, according to analyst projections. Attendance rose 6.6 percent, to about 573 million. Higher ticket prices contributed to the rest of the growth.

But behind that rosy picture lurk some darker realities.

Ticket sales rose in part because Hollywood crammed an unusually large number of big-budget movies into the summer, a period that typically accounts for 40 percent of box office revenue. Studios released 23 films that cost $75 million and up (sometimes way up), 53 percent more than in the same period last year.

The audience fragmented as a result, leaving films like “The Wolverine” and “The Hangover Part III” wobbling when they should have been slam dunks.

“Turbo” the animated snail was squished, taking in $80 million at North American theaters — one of the smallest totals in DreamWorks Animation history. (Only the unfortunately titled “Flushed Away” from 2006 did worse.)

“We’re very pleased with the overall strength of the summer,” said John Fithian, president of the National Association of Theater Owners, “but there was almost too much product. Some of these individual movies would have made more money if studios had spread them out a little more.”

Mr. Fithian noted that the $4.71 billion in total summer ticket sales represents a new high-water mark for the industry, not accounting for inflation, and the growth comes after several years of largely flat sales or declines. It is not surprising that more films sold more overall tickets, but the total does demonstrate a resilience for cinema as competition for consumer attention continues to spike.

“To keep the exhibition business alive, we have to give people a darn good reason to put down all their electronics and get in their cars and get into theaters, and this summer we did it,” said Nikki Rocco, president of distribution at Universal Pictures, which printed money with “Despicable Me 2” and “Fast Furious 6,” both of which took in roughly $800 million worldwide.

Still, appearances can be deceiving. “Pacific Rim,” for instance, has taken in more than $400 million worldwide — no small feat. The picture’s price tag, however, made it an everyone-or-nothing enterprise. Legendary Entertainment and Warner Brothers spent about $330 million to make and market the film, which could end its run in the red since theater owners take roughly 50 percent of ticket revenue.

With the notable exception of Paramount, which released just two films, “Star Trek Into Darkness” and the surprisingly successful “World War Z,” every studio suffered at least one major dud. In many cases, big hits were offset by big flops.

Disney, for instance, had the summer’s No. 1 movie in “Iron Man 3,” which took in $408.6 million in North America, for a global total of $1.2 billion. Disney’s Pixar also scored with “Monsters University,” a prequel that generated more than $700 million in global ticket sales.

But Disney also had the summer’s No. 1 box office bomb: “The Lone Ranger,” which cost at least $375 million to make and market, and has taken in about $232 million worldwide. After theater owners take their cut, Disney is looking at a write-down of $160 million to $190 million on the film.

Higher-priced 3-D tickets took another tumble, at least in the United States and Canada, as more consumers decided the visual gimmick was not worth paying a $2 to $5 premium per ticket. Family films fared the worst — those glasses don’t fit little faces very well — with “Turbo” setting a new industry low for the format, according to analysts: 3-D screenings accounted for only 25 percent of its opening-weekend results. (Last summer’s low was 35 percent.)

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The Fed’s Crisis Lending: A Billion Here, a Thousand There

WASHINGTON — The Federal Reserve lent billions of dollars to the nation’s largest banks during the financial crisis in the fall of 2008. It also lent $400,000 to the Eudora Bank, a community lender with a single location in the center of Eudora, Ark.

Day after day in late October and early November, near the high-water mark of the Fed’s efforts to rescue Wall Street, the central bank also made dozens of similarly modest loans to small banks in communities across the country.

Some banks, like Howard Bank, a suburban lender with four offices outside Baltimore, borrowed as little as $1,000 — a fire drill in case things got worse.

Other borrowers already were facing dire problems. Several have since failed, including La Jolla Bank in Southern California, which took $6 million.

The Fed released a complete list Thursday of banks that borrowed during the crisis from its discount window, its oldest and broadest emergency lending program. The central bank already released similar information for its other lending programs.

As with those other programs, the discount window mostly served the giant banks like Bank of America, Citigroup and Washington Mutual, whose struggles to survive the consequences of reckless lending and investment have defined the narrative of the crisis.

But the discount window was unique because it was open to smaller banks, too. The other emergency programs were created during the crisis to support the trading and investment activities that are concentrated in New York. The discount window, which predates the crisis by almost a century, was created to help commercial banks weather cash squeezes.

The long list of banks that lined up at the window, which the Fed provided in the form of a daily loan register, shows a crisis stretching far beyond Wall Street.

On Wednesday, Oct. 29, 2008, for example, the Fed lent money to 60 different banks, in amounts ranging from $1,000 to $26.5 billion.

At least 10 of those banks have since failed.

Borrowing from the discount window is considered a sign of weakness, and banks historically have avoided it if they can. From 2003 through 2006, the Fed lent an average of less than $50 million each week.

By the summer of 2007, however, the central bank was increasingly concerned that a growing number of banks needed help but were unwilling to borrow. In August, the Fed slashed the cost of borrowing from the discount window by half a percentage point. Then it arranged for four of the nation’s largest banks, Bank of America, Citigroup, JPMorgan Chase and Wachovia, to take what were described as symbolic loans of $500 million.

By the peak of the crisis in late October and early November 2008, the volume of outstanding discount window loans reached above $100 billion.

The Fed has long treated its interactions with banks as confidential but a series of federal courts ruled that it had to provide information on its emergency lending programs in response to Freedom of Information Act requests filed more than two years ago by Bloomberg News and the Fox Business Network.

The Fed provided the data to reporters Thursday in the form of several hundred electronic images of the original documents, loaded on a compact disc, distributed by hand at 10 a.m. in the cramped security checkpoint outside its headquarters building.

By contrast, the Fed released data on its other emergency lending programs in December by creating a public, searchable Web site.

Bankers have expressed concerns about the release of the data, saying that the prospect of publicity will deter future borrowing.

“I think it will make it harder for people to use the discount window in the future,” Jamie Dimon, chief executive of JPMorgan Chase, said Wednesday.

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