Institutions such as the California Institute of the Arts and the Film School of New York University had launched dedicated courses to study Duke and his films. Although, in the eyes of academic circles, his movies might be overly commercial, this is ultimately a commercial country, and no one would ignore tremendous success in the business world.
Moreover, most students trained by these institutions will also enter Hollywood or related industries, where practicality is more valued.
If a person succeeds once or twice, it may be by chance. But continuous success in the eyes of everyone is absolutely worthy of study.
Not just these professional institutions—even Duke's personal biographies appeared on the market. Like other unauthorized biographies of Hollywood stars, these unauthorized biographies were filled with all sorts of content.
Especially the ridiculous things he did in his early years. Back then, Duke hadn't hidden much, and in the circles of industry insiders and entertainment reporters, they weren't exactly secrets. Vividly described and coupled with his current fame and influence, it attracted quite a number of viewers.
The most famous of these is the scandal circulating in the music circle involving him and country diva Shania Twain and pop queen Madonna Ciccone. Moreover, some have confirmed parts of it from the mouths of the two divas themselves, and some film companies even wanted to adapt this relationship into a movie.
When a person becomes famous, all sorts of people and things will try to get connected with them by any means.
Duke had a good mindset. As long as these people weren't too excessive, he would turn a blind eye—this was the inevitable result of the celebrity effect.
After touring several major cities in the Western Pacific region, Duke returned to Los Angeles at the end of June. Transformers had also gone through its fourth weekend in theaters.
Although the film only brought in $16.06 million this weekend, it still claimed the top spot on the North American box office chart, easily achieving its fourth consecutive week at No.1 in North America. The cumulative box office for Transformers in North America had reached $366.54 million. The final box office number was highly likely to break the $400 million mark.
As for overseas box office, since the third week of release, Transformers had expanded to over 150 countries and regions. Compared to The Dark Knight, this upbeat film was more welcomed outside North America. After further expanding its overseas screening scale, the overseas box office soared once again and had now accumulated as much as $550 million.
The film's global box office also smoothly crossed the $900 million threshold, with its sights set firmly on the $1 billion target.
In China, after nearly thirty days of screening, the box office of Transformers had reached an incredibly close RMB 985.66 million, on the verge of becoming the first film in Chinese history to break RMB 1 billion at the box office.
Moreover, China Film Group also brought good news. After various efforts, Transformers had successfully obtained an extension key from a certain pair of giant scissors, allowing its theatrical run in China to be extended by another month. With a total screening period of sixty days, that would be enough time for the film to squeeze out most of the market's potential.
After returning to Los Angeles, Duke paid some attention to the data from Transformers. Most of his focus turned to other matters such as the film foundation he had established two years ago.
This film foundation was initially a follow-the-trend product when Wall Street started investing in Hollywood. Duke hadn't set up this film fund intending to invest in movies—it was meant to be the buyer of those package deals this year.
The success of Transformers was not just due to the film itself and its outstanding promotion; it was also inseparable from the broader social environment.
Currently, the North American economy was in turmoil, with companies from the insurance industry to real estate and finance all going bankrupt, and masses of people losing their jobs. In contrast to the economic turmoil, the North American film market tended to flourish. Perhaps hiding in a theater or at home and immersing oneself in a virtual world was the best way to escape the harsh reality.
In the first half of this year, the North American theater market had been operating at a high level, with box office numbers in these six months nearly 12% higher than the same period last year.
But none of this could change the overall economic situation in North America, especially for those fund companies that invested in Hollywood through package deals, which were now facing a serious crisis.
Despite Hollywood's seemingly booming surface, a major problem was hidden underneath lack of investment funds.
Not long after returning to Los Angeles, Tina Fey provided Duke with a complete report. According to investigations by multiple institutions, from January 2006 to December 2007, the total capital injected into Hollywood film production by major Wall Street banks, hedge funds, and wealthy limited partners amounted to $8.7 billion. Driven by this investment, Hollywood's film output over the more than two years leading to 2008 increased by more than 20% compared to the previous five years combined.
However, film investment was now drying up.
From last August to now, not a single new film fund had been established on Wall Street. These funds typically included financing partnerships through stocks, mezzanine funds, and bank loans.
In past years, Hollywood film companies could obtain part of the funds for film production through these funds.
For example, in 2006, Ryan Kavanaugh established Relativity Media and raised over $2 billion in cash and debt capital from hedge funds like Elliott Associates and traditional banks like Deutsche Bank. With this, he created Gun Hill Road Film Fund 1 and 2.
But now, banks had become increasingly picky in issuing loans many banks were barely surviving themselves. The difficulty and cost of obtaining loans were self-evident.
The Wall Street crisis could impact the entire world Hollywood was certainly not exempt. Many film producers were anxiously living off previously secured stock funds or lines of credit, while struggling companies like MGM were searching everywhere for sponsors.
Who would be the next person willing to burn money in Hollywood? That was the answer many studios desperately wanted.
If oil prices and Mumbai's stock market were still holding high, then tycoons from the Middle East and India wouldn't be stingy. But now, with the financial crisis upon everyone, people could barely care for themselves this channel seemed unlikely as well.
On the surface, North America's box office was booming, and Hollywood appeared to be flourishing. But in reality, its revenue sources were shrinking.
So far this year, Hollywood's DVD sales revenue had dropped 19% compared to the same period last year. Overseas distributors were only interested in pre-purchasing copyrights for typical Hollywood blockbusters like Transformers and Indiana Jones.
"In the current situation, if a film doesn't have major stars or renowned directors involved…"
In the office, as Duke's eyes left the document, Tina Fey spoke up at just the right moment. "There won't be any overseas buyers willing to pre-purchase the distribution rights."
The sharp decline in pre-sale revenue was also a major problem facing Hollywood.
Tina Fey added, "Revenue from television has also declined due to falling ad sales and competition from online video."
Hearing this, Duke couldn't help but sigh. Although he personally wouldn't be impacted much, the economic crisis's effect on Hollywood was far greater than he had once understood.
Even a world-renowned director like Spielberg is now worried about funding.
Earlier this year, India's Reliance Communications Group had promised to invest $550 million in his DreamWorks studio, allowing it to successfully separate from Paramount Pictures. The premise was that JPMorgan Chase would provide $700 million in financing.
But not long after, the stock market collapsed, and Reliance Communications' market value shrank by more than sixty percent. Faced with harsh realities, Spielberg and JPMorgan Chase reduced the financing amount to $325 million, and Reliance Communications only needed to provide a matching investment. However, DreamWorks' share of each film's production cost had to increase from forty percent to seventy percent.
No production company wants to face such a situation. This also means that if a big-budget film fails, the consequences will be disastrous.
It's not just DreamWorks. Tightened capital has also forced major studios to adjust the ratio of different film types being produced. The entire industry is now showing a "dumbbell effect"—a frequent output of both high-budget and low-budget films, while mid-budget films are becoming increasingly rare.
Hollywood studios are putting more money into blockbusters like "Transformers." On the low-budget side, more films like "Underworld" are appearing, while movies like "The Happening," with budgets between $50 million and $100 million, will significantly decrease.
To be precise, Hollywood is experiencing an unprecedented "money shortage."
To borrow a phrase from across the Pacific, those holding large sums of cash now will become Hollywood's "Gods of Wealth."
Duke remembered clearly that the person who once played this role was David Ellison. With his abundant cash flow, he acquired stakes in various film slate deals at low prices and, with the posture of a savior, rescued Paramount Pictures, thereby truly gaining a foothold in Hollywood.
However, the one leading the way is no longer David Ellison.
"Dune Capital and Relativity Media are both facing very serious crises,"
Sitting across from Duke, Tina Fey spoke about the latest situation. "If they can't integrate internal resources and secure sufficient liquidity, they're highly likely to go the way of Lehman Brothers."
"How are the talks with them going?" Duke asked.
"I personally talked with Ryan Kavanaugh three times. He insists on fifty percent and won't budge."
Tina Fey frowned as well. Though it was taking advantage of the situation, trying to acquire their film investment shares at half price was not easy.
"Keep negotiating. Try to push it down to forty percent," Duke thought for a moment and instructed, "Other deals can wait. The stakes that Walkie Fund holds in Fox's 'Avatar' and 'New X-Men,' Disney's 'Alice in Wonderland' and 'Pirates of the Caribbean 4,' and DreamWorks Animation's 'The Croods' and 'How to Train Your Dragon' are the priority!"
"I understand." As Tina Fey was about to leave, she remembered something. "It's said that David Ellison is also interested in taking over some slate deals."
"Is that so…" Duke only thought for a few minutes before saying, "Follow the original plan leak the news."
...
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