This is classic Loony Toons stuff. Hedge would make a great TV show along these lines. But that’s DreamWorks call, not mine. You’d think a movie that made $336 million worldwide would warrant a second glance. Here’s why it doesn’t…
The Over the Hedge film cost about $100 million to make (with allocated overhead included). Add about $70 million to market and advertise. That’s $200 million. Now the studio only gets about half of theater receipts. That’s about $170 million. So we’re at break even. Now subtract a 15% fee to Paramount for distributing the film and we’re about $25 million in the hole. DVD’s and merchandising bring in about $75 million to the studio. So, in the end the film nets about $50 million. Not bad. But it’s not the $300-$400 million that Shrek netted.
Now let’s say you want to make Hedge II. First off, you have to actually pay the actors this time. They did the first one for a fraction of their usual rates with the hope that there would be a sequel and they could cash in. That adds about $20 million to the budget. Now your margin is pretty slim. If the second film doesn’t perform as well as the first you could actually lose money. So, when you have the choice of doing Madagascar III (Mad II nets $200 million) and Hedge II, that’s no choice at all.
Combine this with the fact that DWA is a small studio that makes 2 to 3 movie per year and the choice becomes even easier. A larger studio could make Hedge II and amortize the potiential risk across 20-30 movies instead of just 3. This is why Sony made Open Season II, after Open Season I made less than half what Hedge made worldwide.
In the end, the only hope for Hedge II or a Hedge TV show is if DWA is bought by a large studio. Which will happen eventually. Eventually being defined as a long, long time.
And that was way more than you wanted to know about film financing.