Raphael Stevens

Michael B. Jordan’s directorial debut, Warner Bros.’ “Creed III,” releases March 3.
The Creed film franchise has flipped the script on the Rocky series, highlighting Black talent behind and in front of the camera, while paying homage to Sylvester Stallone’s iconic movies.
The first two Creed movies have been successful at the box office, each generating more than $100 million in ticket sales domestically.

Michael B. Jordan stars in “Creed III.”
Warner Bros.

LOS ANGELES — It’s an underdog story for the 21st century.
The Creed series is a Hollywood miracle in many ways. It’s a lucrative spinoff of the beloved, decades-old Rocky series, but it has its own modern style and sensibility.

And, while paying homage to the star and the stories that gave it a foundation, it has flipped the script on an enduring white working-class mythos by highlighting Black talent on both sides of the camera.
Warner Bros.’ upcoming “Creed III,” due in theaters March 3, also sees its lead actor take the helm as director, a move also made by Sylvester Stallone in 1979 with the release of “Rocky II.” The film will be Michael B. Jordan’s directorial debut.
“Michael B. Jordan has worked on some amazing television series and films and I’ve always said that the best film school is being on set,” said Shawn Edwards, a film critic who sits on the board of the Critics Choice Association and co-founded the African American Film Critics Association. “I think it was only a matter of time before [he] jumped behind the camera.”
Jordan’s road to the director’s chair was paved by Ryan Coogler, who wrote and directed the first Creed film, as well as Steven Caple Jr., who directed the second. Coogler, who hadn’t yet released his debut film “Fruitvale Station,” which also starred Jordan, approached Stallone about a Creed spinoff.
Several years later, he finally won him over. Stallone co-starred in the first two movies and co-wrote the “Creed II” screenplay. Stallone was not involved with the third Creed film and declined CNBC’s request for comment.

The first film, 2015’s “Creed,” followed Adonis, the son of Rocky’s longtime rival and later friend, Apollo Creed. The story examined the life of an orphaned boy living in the shadow of a boxing legend and dealing with his own underdog story as he sought to follow in his father’s footsteps and enter the ring.
“Creed” echoed much of the narrative cues of the original Rocky movies, which focused on a so-called “ham-and-egger” from Philly’s white working-class mean streets who becomes a heavyweight contender and, eventually, world champion.
But the new franchise also addressed issues regarding the Black experience and Black masculinity.
“It’s refreshing to see this focus, not on our traditional ways of thinking about Black representation in terms of the past and historical struggles against discrimination and oppression,” said Brandy Monk-Payton, a professor at Fordham University who specializes in Black media representation. “I think they’re embedded in the way in which [the film’s characters] move about the world … but at the same time, it’s not the centerpiece of the story. The focus of the story is this everyman who winds up going through a struggle and triumph.”

Michael B. Jordan and Jonathan Majors star in Warner Bros.’ “Creed III.”
Warner Bros.

That kind of story can only be told when Black artists are part of the production process and possess leadership roles within studios, industry insiders and experts say.
Sheldon Epps, one of the preeminent Black directors across television and theater, said it is only in the last decade or so that he saw a change in the diversity of Hollywood.
“I’ve been around long enough that in certain situations, I’ve been one of the few, or one of the only, Black directors or Black leaders of an arts institution,” he said. “In certain years, the only one on some of the television shows that I’ve done, like ‘Friends’ and ‘Frasier.’ And that was sadly true for many, many years.”
Epps said that slowly changed as more Black directors were hired to helm hourlong dramatic television shows, including Paris Barclay (“Cold Case,” “The West Wing”) and Eric Laneuville (“Lost”). He also pointed to Black auteurs such as Ava DuVernay as people who have risen to positions of power and used that position to uplift others. DuVernay’s series “Queen Sugar” had a policy that only female directors would be hired to work on the show.
“Participation by more artists of color in the process of creating the stories, not just making them, but the writing of them, is essential, because it it broadens the canvas,” Epps said. “Instead of getting a narrow view of Black people, or Latino people or Asian people, because the stories are being written from inside of those worlds we’re getting a much, much broader view of all of the varied communities of our nation.”

Jonathan Majors and Michael B. Jordan star in Warner Bros. “Creed III.”
Warner Bros.

And stories about Black protagonists sell tickets.
“The Woman King” snared nearly $100 million worldwide during its run in theaters last year, and Coogler’s two “Black Panther” films, under the Marvel banner, together generated more than $2 billion at the global box office.
Both “Creed” and “Creed II” generated more than $100 million at the domestic box office, according to data from Comscore. And the third film is expected to generate between $25 million and $35 million during its opening weekend.
“It’s broadened the audience,” said Rolando Rodriguez, chairman of the National Association of Theatre Owners. “There’s a specific additional energy that’s brought out within the Hispanic and African American community.”
Rodriguez posits that while Black people make up 13% of the population, Black moviegoers will represent around 20% to 22% of total ticket sales for “Creed III.” Similarly, the Hispanic community equates to around 19% of the population, but represents 25% to 28% of movie tickets sold.
“That really helps the overall movie, because it’s not taking away from other audiences,” he said, noting that other demographic groups will still turn up for the film, so it’s not a replacement of those audiences.
“I get excited about it because it’s nice to see some of these diverse movies where these young men and women can actually see themselves on the screen being represented as leading actors and actresses,” Rodriguez added. “That you can be somebody that can become, hopefully, a CEO or a movie star, producer or director … I think it sends a very important social message.”

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The movie theater industry is consolidating in the wake of the pandemic. Since 2019, the number of total screens in the U.S. have decreased by around 3,000.
Surviving theaters have been forced to innovate, even as Hollywood production returns to normal and studios have more content to offer.
As the space contracts, cinema operators are improving technology and seating, while also bolstering their food and beverage offerings.

Girl watching a comedy movie at the cinema with her friend.
Rgstudio | E+ | Getty Images

LOS ANGELES — The movies are still big. It’s the multiplexes that are getting smaller.
Since 2019, the number of total screens in the U.S. have decreased by around 3,000 to just under 40,000.

This consolidation was a direct result of the Covid pandemic, which shut down theaters for a time and triggered a surge in streaming subscriptions. A number of regional chains have shuttered for good, while others were left to reevaluate their financial footing. For many, that meant closing locations or selling off leases.
“Think about retail out there in general, it’s repositioning itself, you don’t have as many of the same branded stores in the marketplace,” said Rolando Rodriguez, chairman of the National Association of Theatre Owners. “Consumers are a lot more selective, and I think that for the economics that are necessary, you’re not going to see these 30-plexes anymore.”
Rodriguez said that most newly built locations will range between 12 and 16 screens and those with larger, preexisting footprints will look to repurpose some space for supplementary activities for moviegoers, like arcades, bowling alleys or bars.
Theaters have been forced to innovate, even as Hollywood production returns to normal and studios offer more movies for release than they were able to during the earlier stages of the pandemic.
As the space contracts, cinema operators are investing in the basics, improving sounds, picture quality and seating as well as in bolstering its food and beverage offerings, events and alternative programming. The aim is to improve the baseline experience for moviegoers regardless of the type of ticket they purchase.

“We do better when people get in the habit of seeing,” said Larry Etter, senior vice president at family-owned regional chain Malco Theatres. “And I think that’s what’s going to happen. I think we’re going to recreate the habitual effect that on Friday nights or Saturday nights or whatever it is, we’re gonna go to the movies.”

The premium push

Already, the industry is seeing improvements in ticket sales. Through Monday, the 2023 box office has tallied $958.5 million in ticket sales, up nearly 50% compared to last year and down just 25% from 2019, according to data from Comscore.
This is a marked improvement from the meager $98.7 million box office tally during the same period in 2021.
Foot traffic has also improved, but continues to linger behind pre-pandemic levels. In the two decades before the pandemic, the industry sold an average of 1.1 billion tickets per year, according to data from EntTelligence. Even as Covid restrictions were lifted in 2022, just more than half that number of tickets were sold for the year. And ticket sales should rise in 2023 as studios release more films.
While cinema operators are pleased that studio production has increased, they are no longer taking audiences for granted.
To that end, operators have started with upgrading projectors. Over the last few years, movie theater operators have been removing traditional digital projectors and installing laser units, citing cost savings over time and a better picture quality for moviegoers.
“It’s a little bit expensive, but it will produce a better product on the screen,” Malco’s Etter said. “The more light you have the clearer everything is and the easier it is to see. And it will be much more economical. It’s sustainable because you are going to use about 60% of the utilities that you did before.”
Etter explained that traditional digital bulbs need to be replaced after around 2,000 hours and produce so much heat that theaters have to pay more to air-condition the projector rooms. And laser components last for 20,000 hours so they can go years without being replaced.
Many theater operators told CNBC they are planning similar upgrades to sound systems, saying they have partnered with companies like Dolby to bring quality speakers into their auditoriums.
“We’ve invest in Dolby Atmos, we’ve invested in new screens, we’ve invested in laser projection,” said Rich Daughtridge, president and CEO of Warehouse Cinemas. “To me, that’s baseline. I feel like you have to create the best sound and picture experience you can create to get people motivated to spend money to come out to the cinema.”

General atmosphere during the IMAX private screening for the movie: “First Man” at the IMAX AMC Theater on October 10, 2018 in New York City.
Lars Niki | Getty Images Entertainment | Getty Images

Across the industry, theater chains big and small are also replacing outdated stadium seating with recliners in a bid to improve the overall cinema experience.
“[We are] really looking at our theaters and making sure all of them are amazing,” said Shelli Taylor, CEO of Alamo Drafthouse. “So if they don’t have recliners, we’re going in and we’re upgrading. We’re giving face-lifts where needed and just really refreshing and making sure that we continue to deliver that premium experience which people grow to love and expect from Alamo.”
These improvements are part of a wider trend that started prior to the pandemic. Consumers have begun to opt for more premium theatrical experiences for blockbuster features, choosing to pay more money to see films on bigger screens or in specialized theaters.
In 2022, 15% of all domestic tickets sold were for premium screenings, with the average ticket costing $15.92, according to EntTelligence data. A standard ticket costs an average of $11.29.
So far in 2023, that premium ticket average is higher — $17.33 each — because so many moviegoers saw Disney’s “Avatar: The Way of Water” in premium formats and 3D.

Event cinema, niche programming

Big blockbusters have always been a driving force of ticket sales for cinemas. Before the pandemic, theater owners relied predominantly on studio advertising — trailers, TV spots and posters — to promote content and drive moviegoers to cinemas. Now, they are putting more in that mix.
Loyalty programs, direct marketing and special events are some of the recent tactics operators have employed to bring in audiences. AMC launched its first-ever advertising campaign in 2021 featuring Nicole Kidman with the tagline “We make movies better.” The company invested around $25 million in the campaign.
Budget-conscious smaller chains have to be a little more creative.
“I’ve had lots of conversations with distributors just talking about better and more efficient ways to market their films,” Warehouse’s Daughtridge said. “Often, that is data marketing and paid social, better trailer placements and [putting] tickets on sale at the right time.”
“I think there’s a lot of low-hanging fruit,” he said of email lists, loyalty programs and social media for personalized marketing.
Warehouse, which will soon open its third location, has also run promotions that range from offering margaritas with movie tickets to special “daddy-daughter” date night showings. Mid-pandemic, Warehouse Cinemas capitalized on the release of Solstice Studio’s “Unhinged” by hosting a car smash event during the film’s fifth week in theaters.
More recently, the chain held “pajamas and popcorn,” a promotion that entitled customers who wore PJs to the cinema a free popcorn. During that promotion, the company showed an Indiana Jones film and the classic animated dinosaur film “The Land Before Time.” Tickets were $5 each.
“The Land Before Time” showings sold 1,400 tickets, Daughtridge said.
“It was one of those events that just popped off,” he said. “We didn’t expect it to do that much business.”
For big chains like AMC, Regal and Cinemark, alternative programming has come in the form of live events, with cinemas setting up streams for concerts, sports and even Dungeons & Dragons campaigns.
Mid-sized chains like Alamo Drafthouse are even delving into the whimsical. When Oscar favorite “Everything Everywhere All at Once” played in cinemas, the theater chain passed out hot dogs to ticket buyers who went to its “feast” event to mark the famous hot dog fingers scene in the film.

Still from A24’s “Everything Everywhere All at Once.”

The company also worked with the Lincoln Zoo ahead of the opening of its new location in the Chicago neighborhood of Wrigleyville to do an outdoor screening of “The Lion King” in the lions’ den at the zoo.
Alamo isn’t the only chain innovating with food and beverages. Concessions have long been a staple at the cinema, but in recent years theater owners have expanded on the traditional popcorn and soda fare.
Cinepolis, which operates more than two dozen cinemas in eight states, is a luxury dine-in theater chain that offers a wide variety of food and beverages, ranging from chicken wings to lobster tacos. Cinepolis hosts “movie and a meal,” a specialized dinner that is catered to a specific new film release.
“For us, the food is crucial for local experience,” Cinepolis CEO Luis Olloqui said, noting how more people have big high-definition TVs at home, coupled with the ability to order out from top notch restaurants.
This trend isn’t likely to slow down, and industry insiders are optimistic about the future of the movie theater business.
“I think we, unfortunately, had some very bad public relation aspects through the course of Covid,” said Rodriguez of the National Association of Theatre Owners. “And now we have to kind of rebuild that muscle with the consumers and remind them, ‘Hey, you know, that’s behind us. Theaters are fine.'”

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Warner Bros. Discovery filed a lawsuit against Paramount on Friday over the streaming rights for “South Park”
The company is seeking hundreds of millions of dollars from Paramount for what it views as a breach of contract for the exclusive rights to the comedic cartoon, which lives on Warner Bros. Discovery’s HBO Max.
Paramount said in a statement the claims are “without merit” and believes it is still adhering to its contract.

Stan Marsh, Kyle Broflovski, Eric Cartman and Kenny McCormick attend The Paley Center for Media presents special retrospective event honoring 20 seasons of ‘South Park’ at The Paley Center for Media on September 1, 2016 in Beverly Hills, California.
Tibrina Hobson | Getty Images

Warner Bros. Discovery sued Paramount Global looking to enforce the streaming rights of “South Park,” setting the stage for a legal battle between two media behemoths as the streaming wars intensify.
On Friday Warner Bros. Discovery filed a lawsuit against Paramount, South Park Digital Studios and MTV Entertainment seeking hundreds of millions of dollars for what it believes was a breach of contract.

Warner said it agreed in 2019 to pay more than $500 million, or approximately $1.69 million per episode, to license “South Park,” the longstanding cartoon featuring bad-mouthed elementary school children that has been airing on Paramount’s cable-TV network Comedy Central for decades, for its own streaming platform HBO Max.
During the bidding process for the “South Park” rights, the filing said, Paramount allegedly asked whether Warner Bros. Discovery would consider sharing the rights to the show for Paramount’s own streaming service.
“Warner/HBO rejected the proposition as a ‘non-starter,'” according to the lawsuit.
However, Warner alleged in its lawsuit that Paramount went back on its contract and withheld “South Park” specials and other related content. The suit points to Paramount’s own fledgling streaming service, Paramount+, as the reason.
A Paramount spokesperson denied the claims made by Warner in Friday’s lawsuit, adding that Warner has stopped paying licensing fees.

“We believe these claims are without merit and look forward to demonstrating so through the legal process,” a Paramount spokesperson said in a statement. “We also note that Paramount continues to adhere to the parties’ contract by delivering new South Park episodes to HBO Max, despite the fact that Warner Bros. Discovery has failed and refused to pay license fees that it owes to Paramount for episodes that have already been delivered, and which HBO Max continues to stream.”
Although the agreement called for HBO Max to receive the first episodes of the latest season of “South Park” in 2020, Paramount said it notified Warner in March that it would halt production of the season as a result of the pandemic
Warner then claims that “South Park” and its creators moved forward with the production of other types of content, such as two pandemic-themed specials that aired between September 2020 and March 2021.
Warner further alleges the scheme was in the works when Paramount’s subsidiary MTV signed a deal with the “South Park” creators in 2021, which called for exclusive content for Paramount+, reportedly worth $900 million.
“We believe that Paramount and South Park Digital Studios embarked on a multi-year scheme of unfair trade practices and deception, flagrantly and repeatedly breaching our contract, which clearly gave HBO Max exclusive streaming rights to the existing library and new content from the popular animated comedy South Park,” a Warner Bros. Discovery spokesperson said in a statement Friday.
The showdown comes as streaming services have been vying for subscribers and looking to reach profitability in the near future. Media companies have been spending billions of dollars on content to attract customers, and have recently begun cutting costs as increased competition has led to slowing subscriber growth.
This week Warner Bros. Discovery reported a big loss in its quarterly earnings as the company faces a softening advertising market, which has weighed on its revenue. The company said, however, that it added 1.1 million global streaming subscribers, bringing its total to 96.1 million for services including HBO Max and Discovery+. Losses for the streaming business also narrowed to $217 million for the period, “a $511 million year-over-year improvement.”
Warner Bros. Discovery plans to launch a combined HBO Max and Discovery+ streaming service this spring.
Meanwhile, Paramount said last week Paramount+ hit 56 million subscribers in its most recent quarter. The company plans to increase the price of its streaming service when it combines Paramount+ and Showtime later this year. Paramount also said it was affected by the tough ad market.

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Space Force leadership described a new “mutual fund approach” to its next round of buying rocket launches from companies.
“As opposed to picking a single stock, we pick two different approaches, because we thought that would best allow the government to pivot,” Colonel Chad Melone told press in a briefing Friday.
Space Force is taking a dual-track approach to buying about 70 launches, with more flexible requirements that will increase the number of companies that can compete.

The headquarters of Space Systems Command in Los Angeles, California.
U.S. Space Force / Jose Lou Hernandez

The U.S. military is preparing to buy another round of rocket launches from companies next year, and Space Force leadership says they’re taking a new “mutual fund approach” to the acquisition strategy.
“As opposed to picking a single stock, we pick two different approaches, because we thought that would best allow the government to pivot,” said Colonel Chad Melone, the chief of the U.S. Space Force’s Space Systems Command’s Launch Procurement & Integration division, in a press briefing on Friday.

Earlier this month the Space Force kicked off the process to buy five years worth of launches, under a lucrative program known as National Security Space Launch Phase 3. In 2020, the second phase of NSSL awarded contracts to two companies – Elon Musk’s SpaceX and United Launch Alliance, the joint venture of Boeing and Lockheed Martin – for about 40 military missions, worth about $1 billion per year.

Source: Space X; Red Huber | Orlando Sentinel | TNS | Getty Images

But, with a number of companies bringing rockets to market, Space Force is splitting NSSL Phase 3 into two groups for about 70 launches. Lane 1 is the new tack, about 30 missions with lower requirements and a more flexible bidding process that allows companies to compete for launches as rockets debut over the coming years. Lane 2 represents the legacy approach, with the Space Force planning to select two companies for about 40 missions that have the most demanding requirements.
“Several factors have strongly influenced our strategy, most notably the ever growing commercial launch market, [and] the greater than 50% increase in national security space missions over what we had in Phase 2,” Colonel Doug Pentecost, the Space Systems Command’s deputy program executive officer, told press.

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Space Force leadership named several companies that can now compete in the dual-track process, including Rocket Lab, Relativity and ABL Space. Pentecost also noted that, a “couple months ago,” Space Systems Command signed a certification plan with Jeff Bezos’ Blue Origin for its New Glenn rocket, with the company aiming to prove it can fly national security missions after three launches.
Pentecost emphasized the cost savings behind the competitive approach of buying launches. For the most powerful rockets, Pentecost said SpaceX’s Falcon Heavy and ULA’s Vulcan rockets “are about half the cost” of what the prior decade’s Delta IV Heavy rockets cost, savings of “almost 50%” for the military to put “the biggest satellites into space.”

“We are saving a ton of money on the high end, while we’re still managing to utilize the commercialized prices on the low end,” Pentecost said.
Separately, Space Force is closely watching the growing demand for commercial launches. Melone said non-military satellite missions would need to be “on the extremely high side” of current projections to limit Space Force’s plans, either through the availability of launch ranges or companies’ production capacity.
Already, companies are hitting unprecedented annual launch rates. Space Force projects its Eastern Range in Florida will see 92 launches in 2023, up from 57 in 2022, and its Western Range in California will have 42 launches in 2023, up from 19.

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