No film is completely worthless.
And since the original Sleeping with the Enemy managed to earn more than $100 million at the North American box office, this movie clearly had something that could spark audience interest.
After Daenerys and Fox worked together on a coordinated PR push, when the film opened on June 15, mainstream media reviews leaned mostly positive. Some praised Michelle Pfeiffer's performance as the new lead, some complimented the cinematography and music, and some dug into the film's deeper exposure and condemnation of domestic violence.
In short, the tone was largely favorable.
When the aggregated media score came out, Sleeping with the Enemy's 6.7 rating was even higher than the 6.4 earned by the concurrent release Dick Tracy, and far above the sub-5 score the distribution team had expected based on test screenings before release.
On top of that, Sleeping with the Enemy was the first of Daenerys Entertainment's long-hyped ten co-produced films, so it already had a solid base of attention even before filming began. In the end, over its opening weekend, the three-day total, Sleeping with the Enemy played on 1,719 screens and took in $18.86 million.
With a per-theater average over $10,000 for the three days, it immediately joined the ranks of hot-selling films.
By comparison, Disney's Dick Tracy earned $22.54 million over its opening three days, which was higher than Sleeping with the Enemy, but it opened on 2,332 screens, so its per-theater average was actually lower.
An opening three-day total of $18.86 million was already comparable to Ghost's first-week seven-day total of $19.76 million.
Using the typical rule of thumb that a weekend accounts for 60% to 70% of a film's first-week gross, Sleeping with the Enemy's first-week total was likely to land between $27 million and $30 million. Even if, because of reviews, subject matter, and audience profile, it could not run as beautifully long as Ghost, as long as its second-week drop stayed under 30%, clearing the $100 million mark in North America would be easy.
Besides, even if it fell short of $100 million, compared to its $15 million production budget and $7 million marketing spend, even if Fox only held half the investment, and even after factoring in the 10% distribution fee, this film's return on investment would still very likely beat Die Hard 2, set to open June 29.
Unlike Sleeping with the Enemy's total $22 million spent on production and marketing, Die Hard 2, starring Bruce Willis, had a production budget alone of $70 million. Add in massive domestic and overseas marketing, and the film would need worldwide box office at least three times its production cost, $210 million, just to break even.
In Simon's memory, Die Hard 2's worldwide box office was only a little over $200 million.
In the new week, since he was set to guest on Madonna's Saturday concert, Simon flew to the East Coast on Monday, June 18.
Last year he had decided to take a year off and relax, but with too many things always on his hands, it never happened. So Simon simply treated this cameo as a break. After the cameo, he would fly to Melbourne to personally follow the filming of Batman: The Dark Knight.
During this time, Simon had been in very close contact with Madonna's team.
Madonna sold the live broadcast rights alone for $6 million, five times the ticket revenue of a single show at Brendan Byrne Arena, and equal to 10% of the entire tour's total ticket revenue. To achieve the best possible stage result, and to make every party feel they were getting their money's worth, Madonna, after a long campaign of coaxing and pestering, had already shoved two free film cameo favors onto Daenerys Entertainment. Then she also wrung two new songs out of Simon.
Of course, they were originally hers anyway.
If Simon did not want to, getting songs from him would have been impossible.
But Madonna was still relatively early in her career, and she did not have many songs suited for live guitar work. Simon treated this cameo as a break, but he also did not want to walk on and off in a mediocre way, so he agreed.
Simon did not ask for an appearance fee this time, but since it involved two new songs, plus the earlier one Madonna planned to hold for her next album as the lead, Bad Romance, the proper royalty split still had to be calculated. Naturally, Simon did not need to handle that personally.
Madonna finished her Toronto dates on June 17. Without Simon involved, moving to New York only required some light rehearsal to settle into the venue. But with Simon joining, aside from the nighttime shows starting on the 20th, the entire daytime schedule that week was spent rehearsing and polishing the three songs Simon would play on.
Given that one night's broadcast income was equal to one tenth of her total ticket revenue from the full sixty-show tour, Madonna was bursting with energy.
In the bustle, Friday arrived again in a blink.
The full-week box office numbers for June 15 to June 21 were released as well.
Disney's Dick Tracy took first place for the week with $34.74 million.
Right behind it, Sleeping with the Enemy, which opened the same week, posted $27.62 million for its first seven days, ranking second. That number clearly exceeded the distribution team's original expectations. After next week, the film would likely recoup all production and release costs from North American box office alone, and then it would just be profit.
Although the two Daenerys-related summer releases still had not taken a single weekly number-one spot, the third-place film, Ghost, drew even more attention than second-place Sleeping with the Enemy.
In its third week, after a big screen expansion, Ghost dropped only 12% from the previous week and still earned $18.01 million for the week. In three weeks, this fantasy romance, which had opened below expectations, had already accumulated $58.33 million.
Daenerys Entertainment had begun turning a profit.
And a box office curve that stayed nearly flat for three consecutive weeks suggested that Ghost's North American total would not stop at around $100 million. Industry forecasts generally believed Ghost would reach at least the same level as Pretty Woman.
Hollywood had assumed Daenerys Entertainment's strength lay in thrillers and horror. Over the past few years, Final Destination, The Butterfly Effect, and the Scream series were simply too famous. You could say that aside from that surprisingly successful early film Run Lola Run, Simon Westeros had built his foundation mainly on horror.
Only now, looking back, did people realize that Daenerys Entertainment had quietly created three romance classics that could enter Hollywood history: When Harry Met Sally, Pretty Woman, and Ghost.
And the success of Batman last winter proved even more that Simon Westeros had enormous potential in comic adaptations and action.
Add in Highgate Pictures' profitable prestige films, and it was obvious that Daenerys Entertainment had no weak spots.
Total Recall, which had initially suppressed Ghost, saw its third-week drop narrow significantly compared to last week's 41%. This week it fell only 26%, but its weekly gross slid to fourth place, earning just $15.74 million, with a cumulative total of $72.14 million.
At that pace, Total Recall's North American total was projected at only around $120 million.
In fifth place, Warner Bros.' Harrison Ford crime thriller Presumed Innocent also showed an unexpected trajectory. Its opening was not high, but in its second week it dropped only 13%, bringing in another $10.17 million, and it had a strong chance of reaching $50 million or more in total.
Meanwhile, in the new week, two more films opened in North America: Eddie Murphy's Another 48 Hrs. and the fantasy horror comedy Gremlins 2, produced under Steven Spielberg's name.
Inside an apartment at East 68th Street and Fifth Avenue in Manhattan.
Simon and Janet sat at the dining table, eating breakfast while casually flipping through the past week's box office numbers.
The summer releases already on the board, Ghost and Sleeping with the Enemy, were essentially settled. With those two anchoring the season, Simon was not too worried about July 6's Teenage Mutant Ninja Turtles, July 27's The Hand That Rocks the Cradle, or August 10's Hellraiser 3.
After Simon set the box office report aside, Janet said, "That mattress company, Simmons, we've basically finalized it. Do you want to go take a look this morning?"
Simon had noticed Simmons mainly because, across the ocean, the name was so famous it was practically synonymous with mattresses.
But after reading the materials earlier, he learned that this old established brand had been performing poorly in recent years. And before Simon even noticed it, Simmons had already changed hands twice, in 1986 and 1988.
The first buyer was a private equity fund, which bought Simmons in 1986 for $124 million. After two years of operation, Simmons broke free from its earlier troubles, and even after the 1987 market crash it still showed a healthy upward trend.
The Simmons management team, convinced their own contribution was decisive, proposed a management buyout in 1988. The private equity fund did not insist on holding, and cashed out cleanly, walking away with $240 million.
Simmons became an employee-owned company.
Then, clearly overestimating themselves, and weighed down by the heavy debt left from the buyout, plus ill-timed internal reforms to how benefits were distributed, Simmons's improving situation reversed sharply over the past two years. It looked eerily similar to the tobacco giant RJR Nabisco, which was also slipping into trouble around this time.
Hearing Janet bring it up, Simon asked, "What's the price?"
"Ninety-six million for one hundred percent equity," Janet said. "But after we acquire it, we also take on $136 million in debt."
More than $100 million in debt was obviously the residue from the last management buyout.
Simon thought about it and asked, "Apollo Management isn't funding it alone, right?"
Janet shook her head. "Of course not. We brought in two other private equity funds. We put up $36 million, take 37.5% of the equity, and we hold control going forward."
Simon nodded in approval.
Even adding the $136 million in debt, Apollo Management, which still held $500 million in cash, could afford a $96 million investment, but that was not private equity style. Putting all your money into one deal increased risk and also made it harder for the fund to exit at the right time and cash out.
Taking only part of the investment while still securing control of the acquired company was, in Simon's view, the best approach.
After thinking for a moment, Simon said, "After the junk bond market collapsed, the old Drexel, KKR, Carl Icahn, Ronald Perelman model, swallowing companies with extreme leverage and then quickly cashing out by carving up and selling assets, is not going to work anymore. From now on, private equity should focus on improving the operations of the companies it buys. Maybe while doing acquisitions, Cersei Capital can also cultivate a dedicated professional manager team."
Janet nodded seriously. "I'll discuss it with them this morning."
Seeing how readily Janet agreed, Simon added, "Of course, I might be wrong. You're the experts."
Janet leaned closer into him. "Even if you're wrong, I'll still listen."
Simon acted like he could not handle it and leaned away, laughing. "Don't do that. It's too easy to make a man's pride swell up."
Janet blinked a couple of times, her gaze sliding downward. "You're swelling up? Need me to help?"
Simon flicked her on the forehead.
After a bit of teasing, Janet lowered her voice again. "I already had them start building crude oil futures long positions. If your judgment is wrong this time, we're going to lose a fortune."
Even though Saddam had threatened to go to war to protect Iraq's oil interests, the Middle East still showed no signs of imminent conflict, and most people did not believe Saddam would really start another war.
Recently, oil prices had been fluctuating between fourteen and fifteen dollars a barrel. Simon knew the low point of this crisis was around thirteen dollars.
But many analysts predicted that because Saudi Arabia, Kuwait, and other producers kept increasing output, international crude might fall to around ten dollars.
If the August 2 war did not happen as scheduled, and oil dropped to ten dollars a barrel, then not only would Cersei Capital give back all the profits it had made in recent months by shorting, it might even lose principal.
It really was an extremely risky bet.
Of course, high risk also meant high reward.
If they waited to bet until the situation became clear, then when everyone saw war on the horizon and piled into longs, there would not be much profit left for Cersei Capital.
Thinking of that, Simon smiled at Janet and said, "If we lose, we lose. We've been too eye-catching these past few years. Honestly, I really want to lose money somewhere for once."
Janet smiled and did not say more.
After breakfast, Janet headed to Cersei Capital's headquarters in Midtown. Simon did not go to Jersey City. Madonna had performed a concert last night, and she probably had not even gotten out of bed yet.
Simon's destination was Daenerys Entertainment's East Coast office in Greenwich Village.
There was a newly acquired project to discuss this morning, called Wayne's World, adapted from a Saturday Night Live sketch, created by Mike Myers, who would later star in the Austin Powers series.
After Simon guided New World Pictures president Danny Morris toward the goal of expanding into the raunchy comedy market, he quickly spotted this offbeat comedy, which in another timeline would gross over $100 million in North America, among the batch of projects Morris had been hunting.