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May 07, 2007

Spiderman 3 Spins A Massive Web

Spiderman 3 blew away the all-time opening weekend box office brining in $148 million in domestic box office. The old record was set last year by Pirates of the Caribbean: Dead Man's Chest which grossed $135.6 million. Look for Pirates of the Caribbean: At World's End to be the new record holder when it opens this coming Memorial Day record. And that little film Shrek The Third due a week from Friday seems on target to open north of $100 million. So much for the death of the theatre business.

Spiderman has also opened in many overseas markets where it similar opening day and opening weekend records. The film has already grossed $375 million globally placing it in 96Th place on the all-time list. Spiderman is ahead of Batman Returns and Beauty and the Beast and just short of last winter's blockbuster, Happy feet, which grossed $384 million globally for its entire run.

We won’t know how high Spiderman 3 is headed until we see mid-week and second weekend box office but with little competition next weekend, the numbers will likely remain huge. A 60% decline would still leave Spiderman 3 with $60 million on its second weekend, which would be good enough for 35th place on the all-time opening weekend list. The biggest ever second weekend belongs to Shrek 2 at $72 million just ahead of $71 million for the original Spiderman. Pirates 2 is 3rd with $62 million on its second weekend a year ago.

My own estimate for Spiderman was $130 million, low but good enough to allow me to reward myself with the closest guess in last week's contest.

Here are a few other interesting facts on the weekend box office. Spiderman 3’s gross of $148 million exceeded the entire comparable weekend from a year ago where all the films in release brought in just $110 million with Mission:Impossible 3 leading the way in its opening weekend at $48 million. The total box office tally for this weekend is $181 million with the $71 million gain moving the quarterly box office from a 5.3% decline to a 3.5% gain. The gain should build considerably this coming weekend when the comparable period a year ago saw just $99 million in box office as the summer’s biggest flop, Poseidon, opened in second place to just $22 million, $5 million behind MI3: Spiderman 3 is likely to beat to beat the combined gross of those two films by at least $10 million next weekend and its weekday grosses will blow away MI3’s from a year ago. There are two new films in wide release this coming weekend that could find moderate interest including 28 Weeks Later, the sequel to the cult hit 28 Days Later, and Georgia Rule, a chick flick with a strong cast that might be good counter programming to the second weekend of Spiderman 3.....

Despite excellent performance so far this year, I think the massive box office momentum in place through the rest of May and June will power shares of Regal Entertainment up another couple of bucks over the next 6 weeks to my $23-24 target. I still expect to be a seller at that level as comparisons toughen in July against last year's release of Pirates 2. Later in the summer comps ease again however against what looks like a strong lineup this year including the third film in The Bourne Ultimatum and Rush Hour franchises. At $23-24, RGC would be trading at 9 times 2007 EBITDA adjusted for its ownership in National Cinemedia (NCMI). I think that it is a full valuation relative to other media stocks, most of which trade at 8-10 times 2007 EBITDA estimates.

Posted by Steve Birenberg at May 7, 2007 09:14 AM in Box Office