Why You Must Go See That 'Flop' 'King Arthur: Legend of the Sword' Finding your destiny is great but hedge your bets.
By Gene Marks Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
King Arthur: Legend of the Sword is unfortunately, a huge box office flop. But you must go and see it!
The story is great, of course. Who doesn't love the legendary tales of the English king who pulls a sword from a stone and realizes his true destiny? Everyone loves the film's director, Guy Ritchie (Lock, Stock and Two Smoking Barrels and Snatch are two of my favorite films). Is there anyone who doesn't love Jude Law or the Sons of Anarchy's Charlie Hunnam or the gorgeous Astrid Bergès-Frisbey? The acting was great, the writing was sharp and the overall production was terrific. Yes, it's 2017 and I used the word "terrific." That's how terrific the film is. I'm not alone in my admiration either. The movie got a 7.3 on IMDB and everyone knows that anything over a 7 is a legit rating.
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King Arthur: Legend of the Sword has all the right stuff -- a terrific director, terrific actors, terrific writing and a huge, huge budget to make it all happen. I'm sure when the movie was pitched it seemed like a sure thing for its investors, but unfortunately, the movie flopped.
IMDB reports that it grossed only $27 million worldwide ($15 million in the U.S.) through May 19. Industry experts, according to this article in The Guardian, are predicting that the film will lose $150 million for its studio, Warner Brothers, which spent $175 million to make the film, not including the costs of marketing and publicity. Was it the story? The lack of actors with household names? The production value? It can't be. I just told you how terrific it is! No one really knows why the film failed so miserably. Some are saying it's an "epic disaster" for Warner Brothers.
A disaster? Not really.
Disasters are rare for big companies like Warner Brothers. Of course, losing $150 million hurts. But the company, which has been around for more than 90 years, has seen its share of bad bets in the past (remember Jack the Giant Slayer? I didn't think so). That's what the movie business, and every business, is all about -- a bet.
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Warner Brothers has 8,000 employees working in its movie, television, digital and a dozen other divisions and subsidiaries. The company grossed about $13 billion in 2015 and had an operating income of about $1.4 billion. Of course, its executives and shareholders aren't happy about King Arthur: Legend of the Sword, but they've been to this rodeo before. The loss represents just a small percentage of all its other investments. For them, it's not a disaster.
I'll tell you what's a disaster. My friend James who started up a coffee shop a few years ago.
James didn't lose $150 million. He lost about $50,000. Like the people at Warner Brothers, he thought he did everything right when starting up his business. He researched his location, leased a great space, served a terrific product. Was it too much competition? The pricing? The decor? Who knows? But the shop lost money month after month and James has yet to figure out why. Sound familiar? After giving it a go for almost three years he closed it up.
Now this is an epic disaster. For James. He lost $50,000. He had to file for personal bankruptcy. He and his wife put all of their savings into the coffee shop. Now, they have nothing. This is not just a financial disaster. It's a disaster of poor business judgment. I love James but he's not a very good business person. No smart business person bets the farm on a business investment, no matter how terrific it sounds. Everything in business is a bet. Not even Guy Ritchie, Jude Law, a $175 million and the King Arthur legend is a sure thing in this world.
Sure, businesses of all sizes -- like Warner Brothers -- make big bets on some things. But, like going to the casino, they're always prepared to lose money. They always have other sources of income and savings to offset any losses. Smart business people invest a portion of their assets, not the entire enchilada. James made the same mistake that many startups make -- he bet it all on one horse.
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This is the reason why you must go and see King Arthur: Legend of the Sword. It's not just a terrific movie about medieval England (it is). It's also a great lesson for doing business in the 21st century. Don't bet the farm on any business idea, no matter how terrific it may sound.
