The blockbuster phenomenon Spider-Man has officially wrapped its theatrical run, raking in $510 million in North America and $750 million overseas, for a staggering global total of $1.26 billion.
While its North American haul fell short of Star Wars: Episode I – The Phantom Menace, its worldwide box office trails only Titanic, securing the number two spot in film history!
Just from ticket splits alone, Dunn Pictures pocketed $420 million—a massive windfall!
Even the Spider-Man soundtrack, released early and selling 280,000 copies for $5.5 million, feels like pocket change in comparison.
Of course, the more you earn, the higher the taxes.
Hollywood has a standard playbook for this: when a movie's a smash hit, you funnel company operating costs, shareholder dividends, and union payouts into the film's budget. It jacks up the reported production costs on paper.
Higher costs mean lower profits, and lower profits mean less tax.
That's why, outside of eco-friendly, defense, or recycling industries with special government breaks, investing in movies in Hollywood offers the lowest tax rates around.
No matter how ugly the books look, by year-end, Dunn Pictures had a clean $400 million extra in the bank thanks to Spider-Man.
Add in ticket splits from Girl, Interrupted, Memento, and Saw, plus VHS and DVD sales and rentals from My Big Fat Greek Wedding and Wedding Crashers, and Dunn Pictures' net income for the year hit $490 million!
The rental income from My Big Fat Greek Wedding and Wedding Crashers alone brought in over $28 million—a real surprise bonus.
Since rental revenue is tax-free, this kind of long-tail income is where movie studios truly shine!
Take MGM, for example. It's on its last legs, with lackluster new releases, but its library of over 2,200 films still pulls in $300 million a year from rentals.
IP—intellectual property—stands out in the grand sweep of time for a reason.
Dunn Pictures had a banner year, but the expenses… they're just as hefty and tangled!
Since May, after a $1 billion cash injection, Dunn Pictures snapped up Tarz TV, Focus Features, DP Television Production, and invested in Sillywood Animation—totaling $2.59 billion.
Movie investments were the big spenders: The Net, The Chronicles of Narnia, Mr. & Mrs. Smith, Unsinkable, A Beautiful Mind, Pirate League, and New York Storm, with over $700 million sunk in!
Then there's the TV side—Band of Brothers and Six Feet Under chewed up another $70 million.
All told, Dunn Pictures' investments this year hit $1.03 billion!
So, despite Spider-Man and Saw blowing up the box office and making rivals green with envy, the company's actual financials show a sharp drop in cash reserves.
Right now, Dunn Pictures is sitting on just $450 million in cash flow…
The state of Dunn Pictures' books explains why movie investments can rake in cash, yet studios keep sliding downhill.
MGM, Lionsgate, and Paramount face bankruptcy scares; Warner and Fox get swallowed up in acquisitions.
Making movies pays, sure—but studios' balance sheets never have spare change.
Say you shoot a film for $30 million total. After two or three years, it pulls in $40 million. On paper, that's a $10 million profit.
In reality, that money doesn't stick around. To keep the studio running, it's plowed right back into new films.
As time rolls on, production and marketing costs climb. A movie that cost $30 million two years ago might need $40 million today…
End result? That film didn't make a dime!
And if a new movie flops, you're in debt.
Cash trickles back slowly, expenses balloon yearly, and unions stir up trouble now and then. Studios struggle to stay afloat. Even Hollywood giants limp along, scraping up funds from Wall Street, the Middle East, and Asia to keep new projects rolling.
If Dunn hadn't played the stock market hard, scored big, and funneled cash into tech companies, his Hollywood savvy—foresight and access to prime IPs included—still wouldn't be enough to build a media empire like Disney.
These days, Dunn's not hurting for money.
At Steve Jobs' insistence, Apple's stock can't dip below $10, and Dunn's been quietly buying up shares—now holding 61% of the company. A decade from now, that'll be a jaw-dropping fortune.
But money doesn't drive Dunn anymore. He's after personal ambition.
Apple's loaded, sure, but Jobs runs the show, not Dunn Walker. And even if Dunn took over, he doesn't have the chops to manage it.
He needs his own turf.
A space he can control.
The choice? Hollywood, naturally!
But the cash from movies alone won't catapult Dunn Pictures into a Disney-level media titan overnight.
He needs funds from other ventures to keep things spinning—acquisitions to grow the film business while branching out.
Movies, though…
They're Dunn's passion. Directing's his craft.
…
Rose Pictures is registered now, but it's still an empty shell.
Dunn knows, though, that as feminism rises, feminist films will catch a wave, and Rose Pictures will ride it high.
It's a shell today, but the future's bright!
The head of this company has to be a woman. Ideally… down the line, the whole staff will be women, making it a standout in Hollywood.
After recommendations from Bill Mechanic and Michael Ovitz, Dunn settled on Rose Pictures' president: Kathleen Kennedy.
No relation to the Kennedys, Kathleen came from humble roots. She started as a lowly secretary at Lucasfilm, caught Steven Spielberg's eye during a collaboration, and climbed her way up to producer.
Now, she runs Kennedy/Marshall Company with her husband, serving as president and overseeing operations.
But it's a tiny outfit—barely a blip. No investment power, no copyright stakes in the big commercial films it helps make.
Its main gig? Helping the couple dodge income tax.
The feds go easy on movie businesses—layered policies bring corporate tax down to 25%, way below the 39% personal rate.
So when Dunn came calling with a warm invite, Kathleen Kennedy had zero reason to say no.
Through a hookup from CAA bigwig Kevin Huvane, Dunn met this Hollywood powerhouse for the first time and had an open, honest chat.
They hit it off.
"Rose Pictures is just a shell right now, with almost no projects," Dunn said. "So you can keep working with other studios—preferably ours, of course. And you can stay president at Kennedy/Marshall too."
Dunn always brought sincerity and warmth to talent.
Kathleen smiled. "Dunn, thanks for being generous. But as Hollywood's first studio focused on feminist films, I'd rather see Rose Pictures hit the ground running."
Dunn frowned. "That's… tricky. Kathleen, you know feminism's just a trend—it's not mainstream yet. Rose Pictures needs time to find its footing."
"There's another way."
"Oh?"
"Any Dunn Pictures film with even a hint of feminist themes, Rose Pictures should co-produce—whether it's a small indie or a big commercial flick. That'll crack the market open fast."
Dunn nodded. "That works."
Kathleen grinned. "And if you could toss me some cash so Rose Pictures can invest in feminist projects at other studios, that'd be even better."
Dunn laughed heartily. "There'll be funds, but not a ton. My new script, Juno, has an $8 million budget—Rose Pictures can handle it. Other cash? You'll have to wrestle Bill for it—I'm tapped out."
Dunn Pictures has $450 million on hand. Looks like a lot, but it's tight.
Next spring, Spider-Man 2 and Daredevil kick off—big projects. Summer brings Harry Potter and the Sorcerer's Stone.
Bill Mechanic told Dunn: no more cash injections, no more wild moves.
Both sides wanted this to work, and Kathleen wasn't about to push too hard. She got the hint. "One last thing—I'd like a role in Dunn Pictures' production department."
Dunn eyed her. "Our production department's different. Not much power, lots of red tape—market analysis, art analysis, even the writers' room call shots."
Kathleen waved it off, chuckling. "Dunn, you've got me wrong. I don't want power. If Rose Pictures is tying into all your feminist projects, having a spot in production just makes things smoother."
"Oh, like that? Easy fix. I'll tell Bill—you can hang a VP title in production."
Truth be told, Dunn figured Kathleen's skills could land her a full VP gig at Dunn Pictures, no sweat.
No rush. Trust and chemistry come first.
Kathleen stood, smiling at Dunn and extending her hand. "So… you're my boss now?"
Dunn laughed warmly, grabbing her hand with both of his. "Here's to a great partnership!"