CVP, movie production. Royal Rumble Productions has just finished pro- duction of Feature Creatures, the latest action film directed by Tony Savage and starring Ralph Michaels and Sally Martel. The total production cost to Royal Rumble was $5 million. All the production personnel and actors on Feature Creatures received a fixed salary (included in the $5 million) and will have no residual (equity interest) in the revenues or operating income from the movie. Media Productions will handle the marketing of Feature Creatures. Media agrees to invest a minimum $3 million of its own money in marketing the movie and will be paid 20% of the revenues Royal Rumble it- self receives from the box office receipts. Royal Rumble receives 62.5% of the total box office receipts (out of which comes the 20% payment to Media Productions).

Assume in its first year of release, the box office receipts for Feature Crea- tures total $300 million. What is the operating income to Royal Rumble from the movie in its first year?