Saw pic related recently and it got me wondering about how huge Hollywood pictures are financed, and who really makes the money on them.
Any articles, videos, podcasts, books etc. would be greatly appreciated.
Saw pic related recently and it got me wondering about how huge Hollywood pictures are financed, and who really makes the money on them.
Any articles, videos, podcasts, books etc. would be greatly appreciated.
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Ask yourself this: does any studio really have $200+ million in cash on hand at any given time? No. That's why you sometimes see multiple studios in the opening credits. Some are just there for securing financing. Which is where Hollywood accounting comes in.
Film financing can be from loans, product placement deals, entrepreneurs, etc. It is when those people (and directors, actors, producers, etc.) start asking for percentage points on profit is when the studio gets real fucky. They will literally drive up any and all expense they can to make it appear the movie hasn't made money. Since most production companies are owned outright by the major distribution studio, it really doesn't matter if the production studio loses money "paying" the parent company to use the IP and stuff.
To get back to other sources of income, you may have seen the past decade various cities offer tax credits to film there. New Orleans, Atlanta (Marvel's current main spot), Pittsburgh, Chicago, Detroit. On and on and on. Look at what's going on right now with George Miller and Mad Max. WB doesn't want to pay him his bonus, so they're coming up with excuses not to. So anytime there is a dispute in paying somebody and the studio drags their feet, you will know.
Take a look at this pic from Deadline's annual most profitable movies (timed with NCAA March Madness). You can see where the movies make their revenue and where the money goes out. Participations are the percentage points I noted before. So while Marvel movies make a bunch of money at the box office, they have to go back and pay the talent and financiers. Residuals are for paying the talent when the movie gets shown on TV or streaming service.
I never read any book on how film financing works. It has come from keeping an eye out during production for who gets involved during production and what their contribution to a movie is. For instance, Gal Gadot is making a fuss about not wanting to work with Brett Ratner when the man hasn't directed anything in years. He's just running his film financing studio.
>Hollywood accounting
This is why agents negotiate for a percentage of the gross.
Bombs are used to hide the profits from successes
There's millions of interesting stories.
What kind of stuff do you want to know?
For instance - thanks to Gal Gadot Warner Brothers has severed ties with Rat Pac.
Rat Pack financed up to a quarter of all their production budgets.
Who and what is Rat Pac? It's Brett Ratner's produciton company. Where did the money come from? A bored Australian billionaire who wanted to fuck Hollywood sloots.
In the 1980's a massive amount of Hollywood production budgets came from German tax shelters.
Did you know Die Hard is a German movie? I mean - they covered their bases by having a "German" bad guy.
My favorite was the 80's, back when you had the independent home video market and the FOREIGN markets (really foreign, not just Disney: China).
You had guys like Golan Globs (aka Canon) who would get financing by making up a ton of cool movie posters, going to film festivals, selling the video and international rights to these imaginary movies, and using the the proceeds to produce one film, which, if a hit (domestically), would pay for the rest so they could deliver them to their buyers. Of course, when they started falling behind, they just took out huge bank loans they would never pay back.
Same went for MGM when the Italian Mob/Vatican Accountants took over. They set up a nice little scam whereby they would borrow hundreds of millions of dollars from European banks, provide kick backs, go broke and the European bank would ping the tax payer for insurance money to cover their losses.
>Who really makes money on them
With studios - It's the shareholders.
With independe films it's hard to say - for instance Kick Ass made a fortune for it's producers (who borrowed the money from financiers, and then sold the rights and made a profit) - it also made lots of money for Universal, who had international cinema and video rights...but it LOST money for Lionsgate who purchased the domestic rights for a fortune and lost it all.
Very interesting; do you have more? Thanks for sharing nonetheless
Also take a look at the Sony Leaks.
You can see how messy the divison of profits gets with actors/directors/producers cuts, with multiple different production companies and distributors.
For instance, these are the numbers on some Sony releases from 2013
>This Is The End
Sony's Net Profit: 50 million
Budget: 32 million
Gross: 126 million
>American Hustle
Sony Net Profit: 27 million
Budget: 40 million
Gross Profit: 251 million
>Elysium
Sony Net Profit: 18 million
Budget: 115 million
Gross Profit: 286 million
>Adam Sandler's Grown Ups 2
Sony Net Profit: 48 million
Budget: 80 million
Gross: 246 million
There is also this. Disney claimed to have lost "over" 300 million dollars on John Carter Of Mars.
It's budget was 263 million dollars. It's gross profit was 284 million.
That's either A LOT of marketing, A LOT of money going to exhibitors (who claim they get a pittance from major studios like Disney) or Disney is stuffing the losses from other ventures all into John Carter (better to have one big bomb from a former executive than a lot of repeated failures from still employed executives)
good shit man
>Disney is stuffing the losses from other ventures all into John Carter (better to have one big bomb from a former executive than a lot of repeated failures from still employed executives)
They do this all the fucking time, with every damn movie they make, and they have for decades.
I'm ancient so I remember feeling bad for the author of Forrest Gump, who negotiated himself a little percentage of the profits from the film, which despite making back its budget and promotion several times over, made exactly no profit thanks to good old Hollywood Accounting -- every dime of profit that movie made disappeared into various box-office bombs. Tom Hanks got a percentage of the gross.
It's mostly for tax reasons, partly to fuck over people who'd otherwise be entitled to royalties, partly for studio politics like you said, partly so the "right" investors get their money back first.
Yeah, I mean, lots. But I wouldn't really know what to talk about specifically or what interests you.
I myself really like the 80's horror markets and the various machinations. People like Charles Band for instance.
A lot of this stuff back in the day came from pre-sales. Get a big name star, a good property, package it together and sell the distribution rights to various TV stations, international distributiors, home video, etc etc. That would give you the money to make the movie.
Direct financing from banks and shareholders was the main thing for major studios, obviously.
Warner Brothers was also getting a lot of money from Legendary Pictures, who now are partnering with Universal instead. It's now owned by the Chinese, but was started by Thomas Tull - He went to various wall street investment firms and raised 500 million dollars to invest in movies.
The really skeevy and interesting ones that you can't find much info on are people like Courtney Solomon.
When he was young he made a short film/pitch film to obtain the rights to Dungeons & Dragons and produced a legendarily bad movie after using those rights to raise money to produce the movie.
He then went into business with a Canadian Jew based in Hong Kong who works in "import export" to finance a series of very expensive flops that seemed to put little effort into checking budgets or even selling the films.
Similar - Millenium films with Avi Lerner. They do stuff like The Expendables.
JCVD parodied them in the opening scenes (and director Tsui Hark).
These guys are famous for doing shit like opening a "studio" in some Eastern European shithole and charging off production expenses like ferraris or a nice new condo. These are the money laundering dudes everyone jokes about.
It doesn't do anything for them tax wise. That form of Hollywood accounting doesn't affect the end profitability of the studio. It is for the other reasons you listed though.
Although I guess in some cases it's probably used to take advantage of tax shelters. If you have one film shooting in a place with heavy tax rebates, you might be able to charge a lot more to that films budget while underreporting the budgets on films shot in regular areas like L.A. or whatever.
The weird thing is that it's known as "Hollywood" accounting, when literally every corporation does exactly the same style of accounting.
>If you have one film shooting in a place with heavy tax rebates, you might be able to charge a lot more to that films budget while underreporting the budgets on films shot in regular areas like L.A. or whatever.
Exactly this.
>The weird thing is that it's known as "Hollywood" accounting, when literally every corporation does exactly the same style of accounting.
It's more unique to Hollywood in that the studios do discrete large projects with specific investors to that project and not any others, plus specific rightsholders and compensation agreements and residuals and such for each project, whereas a major corporation generally has one company-wide group of shareholders, with all project funding and profit going out of and into one big fungible blob of corporate money, divided up through budgeting. I guess you could model each film as a spun-off division with its own listing, etc.
>Courtney Solomon.
why is she skeevy?
>He then went into business with a Canadian Jew based in Hong Kong who works in "import export" to finance a series of very expensive flops that seemed to put little effort into checking budgets or even selling the films.
Hes seems like patsy.
I'm not sure that corporations really do that anymore. Sure, stuff like Wal-Mart - but look at Alphabet. That's just a maze of mini companies smattered all over the globe. Same with Facebook, which is notorious for setting up, essentially, shell companies, all over the globe.
It's all pretty interesting.
It's a he.
Pic related. Right is Solomon. Left is his Canadian Jewish Chinese friend who is a film producer and clothing retailer and restaraunter and property developer and hotelier and theme park developer.
Note: He may just be an honest and super productive businessman who is just a huge fan of unprofitable, unwatchable low budget direct to streaming horror movies.
OP here, really appreciate you championing this thread.
I'm interested initially in the 'millenium films' style money laundering, but i'd also like to continue with a broad understanding so i can find wherein my interests lie. but i'm also a leaf so i'd be into m ore about courtney solomon
where did you learn most of this stuff? just bits and pieces around the internet? are you an insider?
Wow, these sort of things just baffles me
kikes being kikes...nothing new here.
post more, POST MORE ABOUT THESE FUCKING KIKES. WE NEED MORE. This is more important than this shitty weinstein allegations.
gross creeps probably kidnap children from orphanages
Did those Hollywood companies get audited? And who audited these guys