Why Waterworld wasn’t a flop

One of the common myths of modern movies, that we’ve explored in our broader look at the film here, is that Waterworld was a big box office flop. Certainly people expected it to be: when the budget ballooned to a then-staggering $175m, the movie was promptly dubbed ‘Fishtar’ in some quarters, a tip of the hat to the notorious money swallower, Ishtar.

Even today though, people think Waterworld bombed. It certainly comes up regularly in lists of supposed box office bombs.

But Waterworld wasn’t a bomb at all. In fact, it made a decent return in the end. And here’s why.

Firstly, it took good money at the box office. Whilst the $175m negative cost was presumably matched by a good $70-odd million of marketing, the box office returns weren’t bad. Waterworld took $264m in cinemas alone, and whilst Universal Pictures would have done well to see half of that, it certainly made a massive dent in the production budget.

Then, it proved to be a hit on video, across rental and sales. Then the television rights came into play. Waterworld, as it turned out, broke even relatively quickly. It continues to be a money maker, albeit a modest one, for Universal, given that it’s since popped up on DVD and Blu-ray, and continues to get pickup via viewing services and ongoing TV rights.

We should also note that it’s had further benefits for Universal. Whilst the tie in products – such as the soundtrack album, the videogame, the novel and the making-of book – hardly swelled the coffers, Waterworld has inspired a theme park attraction (and a rather good one) entitled Waterworld: A Live Sea War Spectacular. Right up to this year, Universal has been using said attraction at its parks in Los Angeles, Japan, and Singapore.

But then there’s the other reason why Waterworld‘s red ink was never much of a problem, even while it existed. And that’s accounting.

This is rarely talked about, but at the time that Waterworld was in production, and running heavily over budget, Universal Studios was in the process of being sold. Parent company MCA Inc was bought by the Seagram Company just after Waterworld wrapped production. Well, it bought 80% of it, but that gave it control of Universal.

However, Seagram was canny with the deal. Under the terms of it, MCA’s previous owners, Matsushuita, agreed to hold on to $1bn of Universal’s then debts. This isn’t uncommon when one company buys another, but Seagram ensured that the production costs for Waterworld were mainly footed by Matsushuita. In fact, Seagram, and thus Universal, was only liable for spending that took place on the movie after June 5th 1995, when the deal went through. That, then, was the post-production expenses on the film. It’s estimated that Universal, emerging under its new Seagram parent, ended up paying just $12m for Waterworld. The rest was effectively written off as part and parcel of a multi-billion dollar company takeover.

Bottom line: even without the accounting work, Waterworld would have turned a modest profit for Universal. With it? It turned a big one.

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