It wasn't until Lionsgate held their second internal screening that Navas instructed Gray to contact Seashore Entertainment to discuss the distribution of "The Purge."
"I didn't expect Mr. Davenport to be so young," Navas remarked upon meeting Michael Davenport, a bit surprised by his youth, but quickly added, "You're quite promising."
Michael wasn't one to take such compliments at face value. "Thank you," he replied, smiling. "I'm still new to Hollywood and am still figuring out the intricacies of the film industry."
Sensing a strategy, Navas realized that Michael might be downplaying his knowledge. "I've seen your film, 'The Purge.' It has unique elements but also many flaws."
Michael seized on the positive note. "Your company also sees the uniqueness? Unique features can attract audiences."
Navas wasn't fooled. "But the film's flaws will keep more people from buying tickets."
"You have far more experience than I do, and you're certainly more capable," Michael started with a bit of flattery before shifting gears. "You must know that no film can please everyone. Even 'Titanic' had its critics. 'The Purge' is just a horror-thriller."
Navas knew this well but wanted to push harder. "The supporting characters overshadow the main ones, severely impacting the audience's viewing experience."
Michael acknowledged, "That's indeed a flaw."
Navas smirked, sensing an opportunity to push for a more favourable distribution deal.
"But this flaw is also an advantage," Michael said, catching Navas off guard. "It clarifies the film's target audience."
He elaborated, "A clear target audience helps the distributor tailor marketing strategies, saving significant promotional costs."
Navas immediately thought of the prominent Black character, who ends up being a hero in the story. "You're targeting minority audiences?"
Michael didn't deny it. "I held test screenings, and a significant portion of horror fans liked it. Minority viewers also enjoy seeing characters like the main family face trouble."
Discrimination in America was rampant, and many enjoyed seeing such reversals in film.
Navas recalled a market research report from last year and said, "So, you kill off the corrupt main character?"
Michael didn't respond directly but pulled out collected data, pushing it toward Navas. "Here are the demographic proportions from last year to mid-this year. Minority audience shares have been steadily increasing by 3.5 percentage points in July compared to last January."
Navas recognized the validity of the data, having seen similar reports at Lionsgate.
Michael continued, "To some extent, Will Smith's success also reflects this change in audience demographics." He sped up his speech, "The number of Black moviegoers is proliferating. There are also many Arab Americans, and Asian Americans generally have a favourable view of Arabs. Some white people, like me, support equality in films."
As a relatively new company, Lionsgate wasn't as rigid as older ones and was more attuned to such trends.
Michael hoped to leverage this understanding at Lionsgate, given the poor terms offered by Sony. "Lionsgate specializes in horror films and knows the importance of word-of-mouth and strategic marketing. But film promotional resources are often overused, with waste rates exceeding 60%."
Navas nodded in agreement. Overblown marketing campaigns often lead to significant waste.
Michael suggested, "For this film, outdoor ads can focus on minority communities. TV ads can target media with high minority viewership. We can negotiate with theatres to increase screens and showtimes near these communities, which are often less busy."
He emphasized, "Even in promotions, we can highlight the Black character, increasing his presence in posters."
He added, "It's well known that violence is rampant in minority communities. Many have experienced violence and can resonate with a film condemning societal violence."
This theme was highlighted during filming and post-production to appeal to such audiences.
Despite Michael's arguments being somewhat general, Navas recognized the potential advantages highlighted.
If he were younger, he might have signed the deal on favourable terms immediately, seeing the unique marketing potential.
"You have a keen insight, Mr. Davenport," Navas admitted.
Michael humbly replied, "I conducted extensive market research before embarking on this project."
Navas didn't doubt him. "You make a good case."
Michael smiled, "This film can reduce typical marketing costs by at least a third, if not more."
Navas countered, "That's assuming 'The Purge' gets a wide release."
Michael presented more data, "Based on feedback from our test screenings, with proper marketing, a significant number of viewers will support 'The Purge.'"
Reviewing the data, Navas was increasingly convinced that passing on this film would be a mistake.
Michael's thorough preparation and strong arguments were hard to ignore. Navas felt he had met a formidable negotiator.
"Mr. Davenport, you've convinced me," Navas said, appearing to make a spontaneous decision. "Let's discuss the distribution details of 'The Purge.'"
Michael knew that even though they were negotiating with Lionsgate, Seashore Entertainment still lacked leverage and was in a weak position. He didn't celebrate yet, knowing more arduous negotiations lay ahead.
"How can I ensure 'The Purge' gets a North American theatrical release while securing some revenue for us?" Michael wondered.
Navas explained, "Lionsgate offers two distribution strategies: one with higher revenue share percentages but no upfront costs, and another with lower percentages but deducting marketing and distribution expenses later."
He looked at Michael, a slight smile forming. "Mr. Davenport, which one will you choose?"