Los Angeles.
The Daenerys Entertainment branch in Burbank.
It was Friday, December 1, 1989.
With only 532 screens, 'The House Of Gucci' pulled in $9.55 million in its first week. The documentary, originally meant only for promotion without profit in mind, far exceeded everyone's expectations, and Ira Deutchman immediately began preparing to expand its screen count.
However, Gucci made a decision he found hard to accept: North American showings of 'The House Of Gucci' would stay capped at 532 screens, no additional screens whatsoever.
'The House Of Gucci' earned $9.55 million from just 532 screens in week one, and both buzz and word-of-mouth were rising; if they seized the moment and gradually expanded to around 1,000 screens, the doc could easily top $50 million domestically.
Kept at 532 screens, its North American gross would likely end around $40 million, a gap of at least $10 million.
With prep work already done, adding 500 more screens would cost Highgate Film only about $500,000 in print and shipping.
"Ira, this is Mr. Westeros' personal decision".
In Ira Deutchman's office, Angela Ahrendts, president of Gucci's U.S. division and in L.A. to discuss follow up marketing, gave this explanation when Deutchman again voiced doubts.
Hearing it was Simon who refused extra screens, Deutchman promptly dropped any thought of persuading Gucci otherwise.
Before signing, he and Simon had talked face to face; Simon made it clear that although his pay package included 5% of Highgate's net profit, Highgate's operations must still serve Daenerys Entertainment's overall interests, internal synergy would not change.
The same applied across every company in the Westeros System.
Deutchman's 5% profit share meant little when Simon's mandate prevented him from always putting Highgate first, let alone turning it into his private fief.
Pushed out by partners at New Line, he now enjoyed Hollywood clout and compensation his old peers could only envy, he was content and offered no resistance to Simon's call.
Nor dared he.
Working in the same Burbank lot, Deutchman could feel how rough Robert Rehme's days had become.
After a failed jump ship, Simon hadn't ousted him and even paid for his Manhattan condo.
Yet Rehme, once third in command after Simon and Pascal, now saw his power split three ways, with Pascal clearly muscling into distribution.
Once Pascal finished absorbing the network, Rehme would be marginalized, expendable at will.
Worse, with Daenerys' current clout, if Simon didn't release him, Rehme had nowhere to go. At fifty-plus, he couldn't start over outside Hollywood.
Knowing he was being sidelined, Robert Rehme could neither fight back nor slack off, lest he be fired early.
Completing the three-year contract meant a clean break and another job; getting tossed out now would leave him no footing in today's Hollywood.
Ira Deutchman had no wish to end up like Rehme.
Still puzzled, he asked Ahrendts, "Angie, I get that Gucci never meant 'The House Of Gucci' to profit, but as a brand documentary, shouldn't we want as many eyeballs as possible?"
"Ira, Gucci is a luxury house, our products aren't for the masses. Had the film flopped, we'd push it wider. Now we want everyone to know about it yet not everyone to see it, keeping Gucci aloft and exclusive". She handed him a fresh marketing plan. "So we're adding $3 million in promo to make 'The House Of Gucci' famous".
Deutchman took the file and did quick mental math.
At 532 screens and a $40 million gross, after costs Gucci's share of box-office profit would be about $3 million.
They planned to plow every dollar the documentary earned back into brand buzz.
Curious, Deutchman asked, "Angie, mind if I ask how Gucci's sales have been lately?"
Angela Ahrendts smiled. "Overseas I can't say, but Stateside Gucci did $8.03 million last week, up 51% from the week before. This week should break $10 million".
Deutchman instantly saw why Gucci was happy to forgo box-office cash.
Luxury margins are huge; one week's U.S. gross profit likely topped whatever the film could earn them.
As Gucci America chief, Ahrendts directly felt the doc's lift on sales.
Year-end is peak season; without the film, weekly sales hovered around $5 million, enough to beat their $150 million annual target.
Now, thanks to 'The House Of Gucci', store traffic has jumped.
December had been forecast at $20–25 million; it now looks set to hit $40 million, pushing the yearly U.S. total to $170 million.
With Gucci's surge, media are calling the family's sale earlier this year a colossal blunder.
Daenerys bought 63% for $170 million, valuing Gucci at $270 million; barely a year later pundits say it's already worth $1 billion.
They finished by mapping out further promotion for 'The House Of Gucci'.
Thirty minutes later, wrapping up, Ahrendts said goodbye outside the office just as Madonna, rocking a black trench and knee-high boots, full queen vibe, rounded the stairwell.
The two women embraced. "Was going to call tonight, Ang. That new black metal-chain tote? Can you find me one? L.A.'s sold out, and New York said no stock, so annoying".
Angela Ahrendts explained: "This is a limited edition launched alongside the recent documentary, only a hundred pieces in total. Thirty were released at North American boutiques and they sold out last weekend. I can have someone bring one over from Europe for you".
"Thank you, Angie, you're an angel", Madonna said, linking her arm through Ahrendts's. "But if it's selling so well, why not make more?"
Angela Ahrendts laughed. "Make more and it wouldn't be limited. Each of the hundred bags is numbered. There will be exactly one hundred worldwide, no more, no less."
Madonna, of course, knew perfectly well what "limited edition" meant; she'd only been joking.
Once it was settled, Angela Ahrendts took her leave, never once mentioning money.
The bag Madonna had asked for was priced at $2,999, nearly ten times the cost of some basic Gucci handbags.
Gucci can't rival the 'king of handbags, Hermès. Its previous high-end bags hovered around $1,000, so this $2,999 piece marked a cautious push into even more premium territory, hence the run of only one hundred.
To avoid the embarrassment of unsold stock, the hundred bags were split across North America, Europe, and Asia.
The experiment clearly worked.
The thirty bags allotted to North American boutiques sold out almost immediately last Saturday morning. Nearly a week later, big names like Madonna were still asking, proof the publicity had hit the mark.
Gucci had also sent the limited bag to several actresses closely tied to Daenerys Entertainment for street-style shots. Madonna, though she'd attended the last Gucci show, hadn't been among them.
Still, when Madonna asked outright, Angela Ahrendts didn't hesitate; gifting the singer would only boost Gucci's visibility.
Madonna hadn't shown up in Burbank for no reason.
Once Angela Ahrendts was gone, Ira Deutchman and Madonna went into an office and sat down.
"M, Highgate Film can take on your concert documentary for next year. But I can't agree to the $2 million advance plus forty percent of the profits you're asking".
Madonna had first mentioned the idea of a documentary about her upcoming world tour to Simon in Milan.
Simon had been lukewarm, but Madonna had kept it in mind.
After 'The House Of Gucci's success last week, she'd had her agent approach Ira Deutchman for preliminary talks. A shrewd woman, she knew Daenerys Entertainment wouldn't mind another similar documentary after 'The House Of Gucci's triumph.
And because of 'The House Of Gucci', Hollywood could easily line up investors for such a documentary, yet, thanks to a young miracle-maker, Madonna was convinced she should stick with Daenerys Entertainment.
"Ira, 'The House Of Gucci' will probably pull in fifty million just at the North American box office. I believe my concert film has the same potential, so two million up front plus forty percent of the profits is completely reasonable".
Ira Deutchman shook his head. "Music docs and fashion docs are different. You remember Michael Jackson's Moonwalker four years ago, MGM launched it on 906 screens, huge expectations, and it only made $4.21 million".
Madonna smiled at Deutchman. "Ira, MGM's a has been; everyone knows they can't get anything right".
"All right, M, here's what Highgate can offer," Deutchman said, cutting the small talk. "We'll budget the doc at three million. Two options: first, the Gucci model, Gucci put up half the $10 million budget for 'The House Of Gucci' and covered P&A, so they get a corresponding share, while Highgate takes a fifteen percent distribution fee from all revenue streams".
Madonna knew Gucci hadn't bankrolled 'The House Of Gucci' for profit but for brand exposure, hence their lavish spend. She'd seen reports: of the ten-million budget, Gucci had paid seven-and-a-half million. She wasn't willing to shoulder that risk.
"What's option two?"
"Your advance plus profit deal. Daenerys Entertainment covers all production and release costs, but I can only give you five hundred thousand up front and twenty percent of the profits."
Her original $2 million advance had essentially been a buy-out. Cutting it to half a million brought it down to her current acting fee.
After a moment she said, "One million, thirty percent of the profits".
Ira Deutchman shook his head. "Twenty percent, tops".
Madonna seized the opening. "Deal, one million and twenty percent of the profits".
"M, I meant five hundred thousand plus twenty percent. If you don't take option one, Highgate carries all the risk".
"One million plus twenty percent is my floor, Ira. If you say no, I'll take the project elsewhere".
Deutchman looked pained, hesitated, then reluctantly stood and offered his hand. "All right, M, deal".
Madonna shook his hand, sat back down, and immediately felt she could have pushed for more.
Everyone knew Ira Deutchman loved ultimatums: take it or leave it. This time he'd folded too easily.
A certain man's silhouette flashed through her mind, and she regretted it even more.
She really should have held out longer.
Still, she wouldn't renege. One million up front plus twenty percent of profits was probably Highgate's final offer.
Realistically, she didn't expect 'The House Of Gucci' numbers, Moonwalker had flopped, after all, but if the doc pulled in ten or twenty million domestic, she'd pocket several million, no small sum.
And who could say it wouldn't happen?
Her team projected next year's tour would gross over fifty million; she'd take forty percent, twenty million.
If Simon Westeros could make the concert film perform like 'The House Of Gucci', her twenty percent of all revenue streams from the doc could match what she'd earn from the tour itself.
That's why she'd turned down other studios willing to pay a bigger advance.
Shrewd as she was, Madonna wasn't short on the necessary daring.