Dark Knight Gives Time Warner a "Shattering" Weekend

What a weekend. Warner Bros' The Dark Knight shattered all sorts of U.S. box office records. The biggest three day opening weekend ever, clocking in at $155 million, beating Spiderman 3's previous record of $151 million. It's first 24 hours marked the biggest one-day gross in the U.S. of all time--$67 million.

And it broke ground for an Imax (IMAX) release, the 94 giant-screen theaters bringing an unprecedented $6.2 million this weekend. This record-breaker proving the power of quality content plus rave reviews and a solid franchise. Despite the economic downturn, tighter consumer spending, and competition from more entertainment options than ever, good movies still pack theaters.

It was also a great weekend for Hollywood; the biggest three day box office in history, with $258 million spent on tickets. Universal Pictures' Mamma Mia gave a boost, with the musical bringing in $27.6 million.

This mega performance proves that the market will expand if the content is worth it and dispels conventional wisdom that a mid-July opening couldn't be this big. I spoke to BoxOfficeGuru.com's CEO Gitesh Pandya who pointed out that this huge turnout exposes a new audience to more movie trailers, which will drive box office traffic later this year.

This is all great news for Warner Bros.. and its parent company Time Warner (TWX). The studio faltered with high-budget Speed Racer, which bombed at the box office. It bounced back with megahit Sex and the City, which exceeded all expectations. Time Warner's other studio, New Line, produced SATC, but with that studio getting folded into Warner Bros. as part of a consolidation plan, Warner Bros. distributed the film. With The Dark Knight and then Harry Potter and the Half Blood Prince coming out in November, Warner could finish the year with number three studio marketshare.

There's another player cashing in on Dark Knight, Legendary Pictures, run by financier Thomas Tull and backed by private equity and hedge fund money. Legendary has a deal with Warner Bros.. to co-produce and co-finance certain Warner Bros Movies. I'm hearing that Legendary put up half the reported $180 million budget for the film 300, which was a big win for Legendary, Superman Returns, reportedly less so.

Now Legendary doesn't technically get half of everything, since Warner Bros. probably takes a distribution fee and recoups a certain amount of its upfront costs before Legendary gets paid. When the movies perform less than stellar, this deal mitigates Warner Bros. risk. When the movies perform really well, the studio must wish it could take all the winnings. But with a movie like this, Dark Knight everybody makes money. I don't know what kind of talent deals they have, but it's safe to say both Warners and Legendary walk away from this movie with several hundred million each in revenue.