Good one, Hollywood: I nearly believed you when you said you lost money on HARRY POTTER 5
Jul 07
Whenever I explain to people that big movie studios (like Warner Bros., Universal, Paramount, etc.) don’t make much annual profit (relatively speaking), I’m usually met with blank stares or open incredulity. “But Tentpole: The Movie: Sequel #3 made $xxx million!” they say; “of course they make billions of dollars every year!”
That’s not actually the case. Why? Because, while Tentpole 4 made $xxx million at the box office, making back triple its budget, Overlooked Indie Drama, Mid-Tier Director’s Passion Project, Small-Time Fantasy Epic For The Kids and Star-Driven Comedy Vehicle failed to make their double-digit budgets back.
Net profit at the end of the year? Out of a $10 billion gross revenue, a studio might expect to see $800 million — before tax and expenses. That’s 8%. And that 8% has to be used next year to fund a whole raft of projects, big and small, in the hopes of increasing the total revenue, and thereby increasing the actual money that flows into the studio’s coffers.
Confusing this issue is Hollywood’s annoying habit of fudging paperwork. A fresh example of this is a leaked document from Warner Bros. indicating that Harry Potter 5 ( … And The Order Of The Phoenix, 2007) actually lost the company $167 million despite a $938 million gross revenue.
As the insiders at Deadline helpfully point out, a vast percentage of the expenses are in interest owed to money-lenders (about $57 million); the report doesn’t specify who the money’s owed to, though: did Warner Bros. borrow it from a bank or just “lend themselves” the money? In the case of the latter, that “interest” is pure profit, but counts as a negative on this balance sheet.
Why bother lying to the world and covering up your profits? To avoid paying royalties and per-dollar contracts based on net profit. If you sign a contract with an actor to pay them 5% of all net profit, the actor’s going to think “Gee whiz, thanks Mister, I’m going to be rich when this movie banks a billion bucks!” Little does she know, the accountants find a way to balance the budget into the negative, by arbitrarily inflating expenditures, to avoid paying the actor a blessed cent (beyond her up-front salary).
Upon reading about this financial tom-foolery, I dug a little bit deeper and found that this kind of thing has been going on for decades. Here are just a few examples poached from Wikipedia:
- Stan Lee, creator of Spider-Man, successfully sued Sony when they refused to pay him any of the first film’s profits, claiming a net loss (budget: $140 million; gross: $821 million).
- Winston Groom, author of Forrest Gump, refused to sell the rights to his sequel after Paramount failed to pay him royalties, claiming a net loss (budget: $55 million; gross: $677 million).
- Art Buchwald, whose 1982 script led to the 1988 Eddie Murphy vehicle Coming To America, successfully sued Paramount when he wasn’t paid for his involvement; again, Paramount claimed a net loss (budget: <$35 million; profit: $350 million).
- J Michael Straczynski, creator, producer, and lead writer of TV’s Babylon 5, was massively underpaid according to his contract, despite the show’s greater-than $1 billion worth. Quoth he: “Basically, by the terms of my contract, if a set on a WB movie burns down in Botswana, they can charge it against B5′s profits.” Warner Bros. claims that the B5 property is $80 million in debt.
- Peter Jackson and his studio Wingnut Films, fifteen different actors, and the Tolkien estate have all tried to sue New Line Cinema at one time or another, as New Line failed to honour contracts based on the mammoth Lord Of The Rings franchise, which grossed over $6 billion.
Besides cementing the greedy and detached stereotype attached to Hollywood executives, what does this fraudulent documentation mean at a ground level? It means that filmmakers who choose a percent-per-dollar salary over an up-front sum are being swindled (unless their name is Steven Spielberg), and it means that no-name contributors who have a big effect on a movie are being criminally cheated out of compensation.
This comes hot on the heels of news that the big three Twilight stars (Kristen Stewart, Robert Pattinson and Taylor Lautner) are being paid $25 million each to appear in the two-part finale, Breaking Dawn, and that Daniel Radcliffe (Harry Potter himself) is being paid $50 million to appear in his own two-part finale; that’s proof enough that studios have spare cash to throw down in order to secure things they really need — i.e. bankable faces — but are much more thrifty with their behind-the-scenes dealings.
Don’t get me wrong — I love a big spectacle movie like Lord Of The Rings or Star Trek as much as the next fellow, and it’s hard to imagine a cinema experience completely divorced from the Hollywood machine. But sometimes I wish there was a little more justice in the world, you know?
It’s kind of like that cliche guff from Spider-Man: with great power comes great responsibility. Maybe that should be amended to: With great bundles of cash comes the responsibility to pay people what you owe them, you greedy bastards.
“I don’t read the script; the script reads me:” LES GROSSMAN movie officially announced
Jun 10
Sure, Tom Cruise already mentioned this a few days ago, but I stopped paying attention to him some time around the couch-jumping incident several years ago. So I waited for official confirmation from on high and, lo and behold, it sprang from the ground this morning while nobody was looking: Paramount has confirmed a feature-length spin-off for Tom Cruise’s Les Grossman character, made infamous as the OTT Hollywood producer in Ben Stiller’s hilarious industry-spoof Tropic Thunder.
The press release mentions Ben Stiller, so he’ll likely make a return in some capacity (hopefully to direct); Scott Pilgrim Vs The World scribe Michael Bacall is working on the script; no plot details or release date ball-park have yet been released, but I don’t care; the thought of seeing more scenes like the one below is exciting enough for me to be interested (quotes from the press release below video).
HOLLYWOOD, CA (June 9, 2010) – Paramount Pictures and MTV Films announced today that they are set to develop a movie around mega-producer Les Grossman. The announcement comes on the heels of Grossman’s groundbreaking and visionary production of the soon-to-be Emmy® award-winning 2010 MTV Movie Awards Sunday night. Tom Cruise, along with Ben Stiller and Stuart Cornfeld of Red Hour Films will produce and have secured the life rights to Grossman.
Grossman, best known as a mega producer, has most recently mentored talents such as Rob Pattinson and Taylor Lautner. In 2008, Grossman was introduced to the masses by Stiller in the comedy “Tropic Thunder” where the famed producer had a cameo playing himself.
Said Ben Stiller: “Les Grossman’s life story is an inspiring tale of the classic human struggle to achieve greatness against all odds. He has assured me he plans to quote, ‘F**king kill the sh*t out of this movie and make Citizen f**king Kane look like a piece of crap home movie by the time we are done.’ I am honored to be working with him.”
When asked what the screenplay was about Grossman responded: “To quote my great friend Kirk Lazarus, ‘I don’t read the script, the script reads me.’”
Adam Goodman, Paramount Film Group President said, “Everything I learned in this business, I’ve learned from Les. I started out as his assistant, and from the first day he threw his desk at me when I got his lunch order wrong, I have loved him like a father. I am forever grateful to Ben and Stuart Cornfeld and their ability to secure his highly-coveted life rights,”
Tom Cruise is said to be in talks to portray Grossman in the film.Michael Bacall (“Scott Pilgrim vs. the World”) will write the script.
Studios seem suspiciously certain that INCEPTION will dominate the box office in July
Jun 10
Inception is due to hit US screens on the 16th of July. The Sorcerer’s Apprentice was slated to appear on the same date, but it’s since been moved forward a couple of days to the 14th, to get a head-start on Christopher Nolan’s latest mind-bender. Dinner For Schmucks, originally slated for a 23 July release, has been pushed back a week because “the July 30 frame is a less competitive date for adult films and gives “Dinner” more distance from “Inception” (July 16) and “Salt” (July 23).”
Do Disney and Paramount / Dreamworks know something that we don’t? Are they making these decisions based on the overwhelming box office success of The Dark Knight in 2008? Are these decisions influenced by the tidal wave of positive buzz for Inception in the blogosphere? Or have they consulted their crystal balls and determined that Inception is going to be some kind of unstoppable juggernaut?
Find out what all the fuss is about on 16 July 2010 if you live in the US or UK; or later on the 22nd if you live in Australia.
3D ticket prices may have dented SHREK 4′s opening weekend
May 25
Paramount must be blushing with embarrassment right now. Shrek Forever After recently debuted in the US, pulling a $70m opening weekend (by no means to be sneezed at); 61% of that gross came from 3D and Imax 3D screenings. It appears about half of the audience chose to see Shrek 4 in 2D; why fork out more cash when it’s just Shrek 4 and not a “big deal” film like Avatar? Paramount was expecting a somewhat bigger haul, especially when factoring in the exorbitant 3D prices.
59% fewer people rocked up to Shrek 4 than did Shrek 3 in their respective opening weekends. 3D or no, consumers know the Shrek franchise is an ailing one, and won’t drop $20 on it when they know they could spend a few bucks less for the same movie without the glasses. Lesson learned for Paramount — and all other distributors of 3D movies — 3D is not a selling point: the movie itself is.
THE RING 3…D… No joke.
Apr 28
I wish I could have been at the meeting where the genius being Paramount concluded:
(A) Films in 3D are so fucking hot right now
(B) People really dug Japanese horror last decade
(C) We own the rights to The Ring, and ‘part three’ would be the next installment…
OMG! Wait!
(D) We can call it The Ring 3D! The marketing practically takes care of itself!
(E) Green lit.
The trend of every damn film being announced in 3D is getting very tiring, not to mention the equally hideous trend of naming the third film ’3D’. Clever.
Is milking Japanese horror for all its worth while beating an originally successful film to death by forcing trilogies/sequels onto it really going to make money? The answer is probably yes, sadly.
I could question the creditability of Paramount and this horrendously insulting move all I like, but this will likely make a fair box office return. If the creepy girl climbing out of the TV is adapted correctly to be climbing out of the cinema screen toward an audience in 3D it could have some potential. My money’s on it coming off cheap and ridiculous.
Also consider the fact that the kids featured in this unprecedented, bound-to-be -woeful sequel (if The Ring 2 was any indication) will need to search high and low to find a video player that is still plugged into a television to play the doomed VHS cassette tape that features the cursed footage. As a result, I smell product placement opportunities for the iPhone. Which would make sense as THR revealed in their exclusive that the sequel will be geared towards the teen market (duh) and aims to ‘re-boot the franchise’. Nope, these studios ‘aint done by a long shot.
OPINIONS COUNT