CASE STUDY
SPACE JAM is a case study in synergism and perhaps bad business acumen. You have to first establish that SPACE JAM generated huge revenues, somewhere over five BILLION dollars from all sources. To put this into perspective, the entire film industry’s domestic box office revenue was approximately that figure. A movie generates revenue from many sources. The rule of thumb at that time was that the total revenue of a film during its life is that domestic box office represents one sixth of the total revenue. Some films generate more and of course some generate less. A franchise film gets revenue from toys, games, clothes, other stuff. SPACE JAM is one of the best examples of all time.
There are two players here, Phil Knight, of Nike, and Bob Daly, of Warner Brothers. Nike paid for all the development and Warner Brothers reaped the rewards. Nike paid for the development of the characters and paid for the test marketing (the Super Bowl) to show that the characters and concept were still relevant. Riswold put Michael Jordan and Bugs Bunny together. I don’t know how Jim’s mind works but the idea was brilliant and Nike and Phil bought into it. Jim wanted me involved because he was having trouble with Warner Brothers ‘modernizing’ the characters. We plowed through several months of pounding them until they succumbed. Jim Lima, who had worked with me as a concept artist, on some Michael Jackson projects, actually redrew Bugs in more modern form (features, camera angles). WB finally bought in and we did the commercial. It came in number one in the USA Today Super Bowl poll. That means that several hundred million people watching the Super Bowl made it their favorite. What many clients don’t understand is that advertising on the Super Bowl is one of the best test markets. It’s a relative bargain for research. Instant results. Millions of people liked this idea.
So Phil Knight paid for all this plus a fee to Warner Brothers for use of the characters. He also paid for the air time that proved the concept worked. Brilliant business practice. Get someone else to pay for your research and generate ideas and also make a profit. Several years later, the film comes out, generates huge revenues and Nike doesn’t see a penny, despite the film’s being based on a series of Nike commercials. Hollywood strikes again. Don’t feel sorry for Phil.
The guy that called it was Jim Riswold. He said that SPACE JAM was nothing more than a long commercial and he was right. A successful one at that. Huge box office, huge soundtrack, huge video, huge television, huge airplane revenue, huge toys, candy, pinball machines, backpacks, shoes, t-shirts, jackets, etcetera, etcetera, etcetera. Phil Knight did the homework and Warner Brothers nailed the test.