Will Time Warner Shares Benefit From the Lego Movie?
Last summer, when I first saw previews for The Lego Movie, I suspected it could be one of the greatest faux computer-animated films ever made. Nearly everyone in the course of their lives have played with Legos at some point or have purchased the construction sets as gifts for age-appropriate children. In a sense, the movie appeals broadly in that it plays to adults’ inner child whilst directly appealing to children. And children are indeed clamoring for the film. You see, it is not just about Legos but also has Lego versions of popular superheroes and cartoon characters throughout. It will appeal to a wide audience. Generally speaking, a February release usually doesn’t end up being a blockbuster. But that could change with The Lego Movie, and there are ways to profit.
How to play it and why the film will be a success
Remember what The Hunger Games did for Lions Gate Films (NYSE:LGF) stock? If you don’t, it was a huge catalyst to drive the stock higher. Disney’s (NYSE:DIS) Frozen is still in theaters and has seen more sales than most projected. It was great for the DIS fourth quarter and will impact the first quarter, at least for the movie/film division. With The Lego Movie, we are dealing with Time Warner (NYSE:TWX) and Warner Bros. studios. Thanks to a barrage of clever and entertaining previews and an overwhelmingly positive response from critics, Warner Brothers and TWX are about to strike box office gold with the toy-inspired film, which as I type is now completing its opening weekend in theaters across the United States.
The film is being shown in nearly 4,000 theaters. Last night as I walked through one of New York’s largest malls, Regal Cinemas (NYSE:RGC) had every showing of The Lego Movie reading “sold out.” That is how I judge winners. But one may question this and say, what if it fizzles out after this weekend? A legitimate question that I think is unlikely for several reasons.
As of right now, The Lego Movie has an incredible 96 percent Fresh rating on Rotten Tomatoes and is largely being hailed as a clever, inventive, and energetic film for all ages. What about IMDB.com? This is my go-to source for determining how “good” a movie is. Feel free to check out classics like Forrest Gump, Casablanca, etc. Well, at the time of this writing, The Lego Movie is boasting an amazing 9.0 IMDB rating, which is exceptionally high for this website, which tends to rate even the best of movies 8.0-9.25.
Fandango announced that The Lego Movie was its second highest-grossing advance ticket seller among all animated films, trailing only 2010′s Toy Story 3 and beating out Frozen and Pixar’s Monsters University for advance sales. Realize that in 2013, Frozen set records thanks to the best Thanksgiving weekend launch of all time, earning a massive $67.4 million in the U.S. alone. Monsters University took home $82.4 during its first three days. What about The Lego Movie?
I suspect The Lego Movie will be giving these films a run for their money, and that is good for shareholders of TWX, as Warner Bros. was due for another smash box office hit. The best February launch of all time was the $83.8 million record set by 2004′s The Passion of the Christ. The Lego Movie came in over $50 million this weekend. It is not surprising, given those strong advance sales and sold-out theaters. The film is now in the top four February films of all time, putting it in the same league as 2001′s Hannibal and 2010′s Valentine’s Day, which currently hold second and third place with $58 million and $56.3 million, respectively, for their launch weekends.
There are no other big hits in theaters that can compete right now. There is The Nut Job in its fourth week, which is really about all there is in the way of family films and films that apply to a broad audience. If families leave theaters as happy as critics seem to think they will and IMDB is indicating, you can be sure it’ll translate to massive box office success over the next few months.
The cast is full of stars doing voiceovers, which may draw fans that otherwise have no interest in the film. All of the deals the studio is making with stores and kid-friendly restaurants should also boost sales. And, for some anecdotal evidence, my sons have been begging me to see this film. As someone who generally waits for films to be released on DVD or Blu-ray, TWX will certainly be getting a chunk of change from my family this week. News of the movie’s sales for the first full week may be a catalyst for the stock in the coming week.