Why Big Bear David Tice Is Bullish
Anyone who reads the newspaper or watches CNBC knows David Tice. He is the founder of the Prudent Bear Fund.
Recently, one of Tice's tweets caught my eye—he is the lead investor in the new movie Soul Surfer (TriStar Pictures) which is out in theatres today. It's about the inspirational story of Bethany Hamilton who at the age of 13 was attacked by a shark while surfing and her courageous way back to riding the waves as a professional one-arm surfer.
It's not every day you get to sit down with a quintessential bear and talk about something bullish so I thought now would be a great time to talk to David about something he is excited about.
LL: What made you decide to be the lead investor of Soul Surfer?
DT:Believe it or not, I never thought I would invest in a film. I'm kind of a judicious investor and a realist. I always thought anything that was too cool to talk about at cocktail parties would make bad investment. I was not inclined to invest that way, but the story was so magical and powerful. I saw this movie project as an investment. I'm not your stereotypical venture investor but I do like inspirational movies. I love movies like Rocky, Ruby, October Sky, and I like to inspire kids and this movie is just that.
It's the story about Bethany Hamilton which was so overwhelmingly popular. I am not a big surfer but I find it very appealing. I even was able to learn to surf in Hawaii and I did get up for five seconds. I love the look of crashing waves and acrobatic bodies on surfboards. But besides all that, there is also a faith message in this story that I knew would be well received by the faith based community.
I think the Christians in the country tend to come out and support movies with a faith message in them. My intent was to create a cross over movie because faith was and is organic to Bethany and her family's life. So my down side was covered because of the faith message. It would be subtle and still hopefully attract the main stream.
LL: Soul Surfer is one of several faith-based films similar to The Blind Side. It was originally set to be released in 300 theaters but TriStar decided after seeing the final product to release in 2,000 theaters. That's a bullish sign. How successful of an opening do you hope it will be?
DT: I'm a first time movie guy and I know I'm starry eyed. I believed in this movie from the beginning. I have great movie pros around me that are thinking it should do pretty well. They have all this tracking that says we will be behind Arthur because they are spending more marketing dollars and is on more screens, but I don't know.
I might be starry eyed and crazy but I think we can beat Arthur. It can be big! There are a lot of people out there, including families that are kind of tired about bathroom humor movies. I think Hollywood ignores them. I think we could to $100 million.
LL: Soul Surfer had a reported budget of $15 million and it reportedly exceed it. Can you say what the budget in the end was?
DT: In Hollywood you are not really allowed to talk about that so I can't say.
LL: You briefly mentioned your down side risk earlier. Risk mitigation is one thing all money managers like yourself weigh with all of your investing decisions. How do you take into account risk mitigation in a movie?
DT: A big part of my down side analysis was looking at the faith base side and I saw where Fireproof was a very in your face evangelical movie and it was made a half a million dollars and 33 million dollars in box office and so I felt like if we got the faith base community behind us at all it would cover my downside.
We also have claimed back some of the foreign territories from Sony so therefore I think we will get some foreign sale estimates of several million dollars that would defray my negative costs. Film economics are complicated- the exhibitor takes half, then there's the Print and Advertising component, and the studio takes out a distribution fee.
There is a lot to take into account. We know we will have some DVD sales and a tv deal. Sometimes the domestic box office doesn't necessarily mean that much to your negative cost because of the big takes from the exhibitor and P&A component.
LL: Approximately 50 percent of box office receipts are returned to the studio. What do you consider to be a good return for such a film in terms of percentage on your return on investment?
DT: I'm still the starry eye. I hope to make two or three times my money. I'm not just looking at this as a 25 percent return. But if I get a 30, 40 percent return and I made a great film and had a lot of fun and create great art that touches people I will be happy. I am just so proud of my team. Even though I was the guy writing the checks, I did throw myself into this. I was on the set every day from call to wrap.
I moved to LA and was involved in post production in the Summer and have been involved in marketing of the movie. It has been a great experience. I found out there is a real business orientation in the way they utilize budgets and money.
Its really like a start up company that goes up from cradle to grave. After the premiere and once the DVDs are produce its done. Its fascinating from that perspective. We had great support by Film District, Sony, Bob Berney and Jeanne Berney, they were the ones who were responsible for marketing the Passion of the Christ which did 600 million and 200 million dollars for My Big Fat Greek Wedding.
We think this movie will have legs and stay in the movie theaters for a while because it is an uplifting movie. I'm just very, very, proud to be involved and I'm proud of my team and of Bethany and her family. They are great people and her life story is inspirational.
|RELEASE DATE||MOVIE||DISTRIBUTOR||BUDGET||US GROSS||WORLDWIDE GROSS|
|5/25/07||Pirates of the Caribbean: At World's End||Buena Vista||300 MM||$309,420,425||$960,996,492|
|12/31/12||The Hobbit Part 1||New Line||270 MM||UNKNOWN||UNKNOWN|
|12/31/13||The Hobbit Part 2||New Line||270 MM||UNKNOWN||UNKNOWN|
|11/24/10||Tangled||Buena Vista||260 MM||$200,084,028||$576,984,028|
|5/4/07||Spiderman 3||Sony||258 MM||$336,530,303||$890,871,626|
|7/15/09||Harry Potter and the Half-Blood Prince||Warner Bros.||250 MM||$301,959,197||$933,959,197|
|12/18/09||Avatar||20th Century Fox||237 MM||$760,507,625||$2,783,550,045|
|6/28/06||Superman Returns||Sony Pictures||232 MM||$200,120,000||$391,120,000|
|11/14/08||Quantum of Solace||Sony Pictures||230 MM||$169,368,427||$576,368,427|
|7/7/06||Pirates of the Caribbean: Dead Man's Chest||Buena Vista||225 MM||$423,315,812||$1,065,659,812|
|5/16/08||The Chronicles of Narnia: Prince Caspian||Buena Vista||225 MM||$141,621,490||$419,490,286|
|6/24/09||Transformers: Revenge of the Fallen||Paramount||210 MM||$402,111,870||$836,303,693|
|5/14/10||Robin Hood||Universal||210 MM||$105,487,148||$322,320,108|
|12/14/05||King Kong||Universal||207 MM||$218,080,025||$550,517,357|
|12/7/07||His Dark Materials: the Golden Compass||New Line||205 MM||$70,107,728||$372,234,864|
|3/5/10||Alice in Wonderland||Wald Disney Co.||200 MM||$334,191,110||$1,024,391,110|
|6/30/04||Spiderman 2||Columbia||200 MM||$373,524,485||$783,705,001|
|5/28/10||Prince of Persia: Sands of Time||Buena Vista||200 MM||$90,759,676||$335,059,676|
|6/18/10||Toy Story 3||Buena Vista||200 MM||$415,004,880||$1,064,404,880|
|12/19/97||Titanic||20th Century Fox||200 MM||$600,788,188||$1,842,879,955|
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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."