Ed and Lorraine Warren, born in the 1920s, began their work in paranormal investigations and exorcisms in the 1950s. The popularity of "The Exorcist" in the 1970s brought increased media attention to paranormal events across North America, and it was during this time that the Warrens rose to fame.
The material for the two upcoming horror films, "The Conjuring" and "The Haunting in Connecticut," is derived from the Warrens' personal experiences, both stories taking place in Connecticut, north of New York. However, the sources of these projects' rights differ.
After gaining fame, the Warrens frequently participated in various interviews and authorized writers to create books, leading to numerous accounts of their encounters, some genuine and some fabricated. Additionally, the individuals who experienced these paranormal events also gave interviews to the media.
For these two projects, the former is based on the Warrens' own accounts, while the latter is adapted from a novel by Ray Garton, written after interviewing the Snedeker family.
After lunch, Simon brought Danny Morris to his office to continue their discussion.
"As for the script development, I'll draft an outline for you," Simon said as they sat across from each other at the desk. "The most pressing issue now is the rights. The Warrens have given many interviews and authorizations over the years. I need you to thoroughly investigate all their public authorizations. Danny, I don't want a situation where someone suddenly sues us for a billion dollars after the film's release, claiming infringement."
Historically, after the successful release of "The Conjuring," an author who had written about the Warrens' investigations demanded $900 million in compensation from Warner Bros. Such lawsuits are common in Hollywood, though a $900 million claim is laughable.
However, with greater ambitions for the series, Simon wished to avoid any potential legal disputes that could have been preempted.
Danny Morris, aware of Hollywood's frequent legal battles over rights, responded confidently, "Simon, the rights should be secure. We have the Warrens' recorded accounts and signed agreements for 'The Conjuring.' For 'The Haunting in Connecticut,' even though the Warrens are involved, it's based on Ray Garton's novel, and we have an agreement with him as well."
Simon nodded but then shook his head, saying, "Actually, Danny, I believe the Warrens' experiences offer more than just the value of a single 'The Conjuring' movie. According to the materials you've given me, the Warrens have been involved in paranormal investigations for thirty years and have collected numerous cursed or haunted items. Have you considered turning their experiences into a long-running series?"
"The Conjuring" is just a snapshot of the Warrens' extensive career. Danny Morris hadn't originally thought that far ahead, but Simon's words opened his mind. "That's a great idea, Simon. I'll immediately start investigating any external authorizations the Warrens might have given."
"Actually, you're still not quite getting it," Simon smiled. "My point is, since we've successfully created a DC movie universe, maybe we could also build a horror movie universe based on the Warrens' thirty-year career in paranormal investigation."
The DC movie universe is one of Hollywood's greatest achievements. For most filmmakers, the only thing that might rival it is the Marvel Cinematic Universe, which Daenerys Entertainment is poised to develop.
Danny Morris hadn't expected Simon to value the Warrens so highly, to the point of creating an entire movie universe around them.
Creating a "movie universe" is no small feat. While it was clear that a horror-themed universe wouldn't rival the scope of the DC universe, if successful, it would still be a landmark commercial case in Hollywood.
Moreover, the major advantage of horror films is their low production cost, which means lower risk.
Thinking quickly, Danny Morris couldn't help but swallow hard, realizing the potential scope of the project. Smiling wryly at his own reaction, he said seriously, "Looks like I have a lot of work ahead of me."
"This is just a concept," Simon cautioned. "The success of this idea depends on how well 'The Conjuring' and 'The Haunting in Connecticut' perform at the box office. If they are lackluster, then we can't even begin to talk about a movie universe. So, at least until the release of these two films, you shouldn't discuss this idea with anyone else."
Danny Morris nodded. Even without Simon's advice, he would have kept quiet to avoid being ridiculed in case of failure and to prevent competitors from catching wind of Daenerys Entertainment's plans.
As Danny Morris began to think about securing an exclusive agreement with the Warrens, Simon, seeing him deep in thought, didn't interrupt. Instead, he turned to read a document for a few minutes. When the time was right, he looked up and said, "Also, regarding 'Ace Ventura: Pet Detective,' I think Jim Carrey's performance style is unique. During production, give him as much creative freedom as possible. By the way, what's his contract like?"
Danny Morris, switching gears to focus on the immediate project, said, "Following the model of Julia Roberts' contract, it's a five-picture deal. The fee for 'Ace Ventura' is $200,000, with the subsequent four films capped at $5 million each, and the contract term is 15 years."
In hindsight, knowing what Simon knew about Jim Carrey's rise, Carrey would likely never have signed such a contract if he had foreseen the future.
In the original timeline, 1994 was a remarkable year for both Hollywood and Jim Carrey. He had three major hits in one year: "Ace Ventura: Pet Detective," "Dumb and Dumber," and "The Mask," with the latter two breaking into the year's top ten box office.
Hollywood often celebrates stars joining the $20 million per film club, but many might not know that Jim Carrey was the first to achieve that milestone without needing profit sharing, solely through a fixed fee.
Had Carrey foreseen his success, he wouldn't have agreed to a contract that capped his pay at $5 million, which is a hefty sum but far below his eventual worth.
However, there's no undoing what's done.
Simon planned to manage Carrey's rise more carefully, avoiding a scenario where he had three blockbuster films in one year.
In 1994, Carrey's three films were "Ace Ventura: Pet Detective," "The Mask," and "Dumb and Dumber." Daenerys Entertainment already had the script for "Ace Ventura" and had acquired the rights to "The Mask" from Dark Horse Comics. "Dumb and Dumber," however, posed a challenge.
Originally, "Dumb and Dumber" was credited to the Farrelly brothers as writers and directors, but its initial story came from John Hughes. Hughes sold the concept to New Line Cinema, which then developed it into a full screenplay with the Farrelly brothers.
After the success of the "Home Alone" series, Hughes had shifted focus entirely to producing and writing for Hughes Entertainment, with increased demands for profit sharing. For his recent collaboration with Warner Bros. on "Dennis the Menace," Hughes secured a 10% gross revenue share across all channels.
Gross revenue is a vastly different concept from net profit. For example, a 10% share of gross revenue from box office sales means Hughes gets his cut from the studio's share of ticket sales before any production or distribution costs are deducted.
This agreement puts the studio at risk if the film doesn't perform well, as Hughes benefits regardless.
Simon recognized that "Home Alone 2" would likely be the last project Daenerys Entertainment would do with Hughes. Given the circumstances, there was no interest in negotiating for the story of "Dumb and Dumber," avoiding the risk of conflicting with another existing project.
Continuing the discussion for another half hour, Simon and Danny Morris finalized the plan to develop "Ace Ventura" and "The Mask" consecutively, with Jim Carrey as the lead in both.
Production on "Ace Ventura" was set for later in the year, aiming for a release by Easter the following year. "The Mask" would start filming early the next year with a year-end release planned. This approach would keep Carrey's fees relatively low, as he wouldn't have become a major star by then.
After Danny Morris left, Simon's assistant reminded him of the upcoming financial review meeting for Daenerys Entertainment. The 1992 financial report would be available in February, and this was a routine weekly update.
With preparations underway for an IPO by the end of this year and a planned listing in the summer of 1994, the 1992 financials were crucial for driving this process forward.
For Daenerys Entertainment, the most significant segment remained the film business in 1992.
The year's North American box office top ten, as of December 31, 1992, were:
1. "Wonder Woman" - $371 million
2. "Aladdin" - $176 million
3. "Jurassic Park" - $163 million (still in theaters)
4. "Lethal Weapon 3" - $143 million
5. "Home Alone 2" - $142 million (still in theaters)
6. "The Ring" - $131 million (still in theaters)
7. "A Time to Kill" - $114 million
8. "Teenage Mutant Ninja Turtles" - $113 million
9. "Sister Act" - $108 million
10. "Indecent Proposal" - $93.11 million
From this list, aside from "Aladdin," "Lethal Weapon 3," and "Sister Act," the other seven films were all associated with Daenerys Entertainment.
This market
share dominance, similar to the previous year, was even more pronounced in 1992 following the acquisition of MCA, increasing the studio's production capacity.
In 1992, the North American box office grossed $5.36 billion.
Of this, films directly released by Daenerys Entertainment—41 titles in total, calculated based on the box office from January 1 to December 31, 1992 (including 1991 films' revenue in 1992 and excluding 1992 films' revenue in 1993)—grossed $2.13 billion, capturing 39.7% of the market.
Including the $294 million from co-productions like "A Time to Kill," "Indecent Proposal," and "The Last of the Mohicans," this share rose to 45.1%.
In Hollywood, where studios celebrate market shares exceeding 20%, the emergence of a giant commanding nearly 40% of the market is a phenomenon bordering on oligopoly status.
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