North America rights for Kantara Chapter 1 were acquired at a staggering Rs 35 crore, including an Rs 8 crore refundable component.
Distributor, who purchased the film at inflated prices, are now staring at significant losses. Unlike Hombale’s previous releases, this deal was structured mostly on a minimum guarantee basis, leaving limited protection for distributors if the film underperforms.
While both the 2022 release of Kantara and this prequel have been commercially successful overall, the North America investment is disproportionate to its returns.
The film needs to gross approximately $7.5 million to break even, but analysts suggest it may struggle to cross the $4 million mark, putting Rs 27 crore at risk.
Despite reports of roaring success and strong collections elsewhere, Kantara Chapter 1 is likely to see losses in North America.
The inflated pricing and high expectations have created a challenging scenario for overseas distributors.