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(The Atlantic)   According to Hollywood maths, Forrest Gump, Harry Potter, and Return of the Jedi have made $0 profit, so of course they can't pay some of the actors, or royalties   (theatlantic.com) divider line 118
    More: Unlikely, Return of the Jedi, Harry Potter, Hollywood, Jedi, David Prowse, Planet Money, Techdirt, Darth  
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10853 clicks; posted to Entertainment » on 09 Sep 2012 at 6:50 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-09-09 06:30:28 PM
But remember, downloading movies is a bad thing, because actors don't get paid if you do.

/in before the MPAA apologists explain how David Prowse would have made bank if nobody ever torrented Return of the Jedi
 
2012-09-09 06:31:12 PM
Sept 14 2011

timely find, subby
 
2012-09-09 06:35:36 PM
If you combined Hollywood math with cop math, would it average out to an accurate result?
 
2012-09-09 06:36:37 PM

reported: If you combined Hollywood math with cop math, would it average out to an accurate result?


No, it would go in infinity and it would be ALL the money.
 
2012-09-09 06:39:17 PM
Isn't this the same accounting trick that Enron used?
 
2012-09-09 06:43:10 PM

urger: Isn't this the same accounting trick that Enron used?


Maybe. Enron used housing profit rules, to write on budgets that a 20 year oil deal had all of it's profits in the first year, even though they were evenly paid every year. This buy the way was cleared with the SEC as perfectly legal. The problem with Enron came when they started spending as if those budgets were real.
 
2012-09-09 06:43:41 PM
I don't need to have a movie to do that. I've done that with software royalties.

/never take a % of "profits"
//yes it's slimy
 
2012-09-09 06:52:13 PM
Though it wasn't mentioned in the article, the author of Forrest Gump got screwed by this as well (from Wikipedia):

"Winston Groom was paid $350,000 for the screenplay rights to his novel Forrest Gump and was contracted for a 3% share of the film's net profits. However, Paramount and the film's producers did not pay him, using Hollywood accounting to posit that the blockbuster film lost money-a claim belied by the fact that Tom Hanks contracted for the film's gross receipts instead of a salary, and he and director Zemeckis each netted $40 million. Additionally, Groom was not mentioned once in any of the film's six Oscar-winner speeches."
 
2012-09-09 06:53:17 PM

Marcus Aurelius: I don't need to have a movie to do that. I've done that with software royalties.

/never take a % of "profits"
//yes it's slimy



So much this.  Never take a % of profits as pay.  Its cool to maybe put some skin in the game and give away work for actual stock in the company (or a percentage of income, etc.)  I've done that many times.  Some wildly successful, some earning me $0.  My risk, can't cry about it.
 
But for the most part, most businesses technically run at zero "profit".  Any income after expenses goes somewhere else.
 
2012-09-09 06:53:38 PM

calbert: Sept 14 2011

timely find, subby


Well, Hollywood is still doing it, and still claiming these movies made $0 so it's still relevant.
 
2012-09-09 06:54:48 PM

OriginalGamer: Though it wasn't mentioned in the article, the author of Forrest Gump got screwed by this as well (from Wikipedia):

"Winston Groom was paid $350,000 for the screenplay rights to his novel Forrest Gump and was contracted for a 3% share of the film's net profits. However, Paramount and the film's producers did not pay him, using Hollywood accounting to posit that the blockbuster film lost money-a claim belied by the fact that Tom Hanks contracted for the film's gross receipts instead of a salary, and he and director Zemeckis each netted $40 million. Additionally, Groom was not mentioned once in any of the film's six Oscar-winner speeches."



He wasn't screwed, he either had a bad agent or no agent at all (and obviously couldn't read a contract very well).
 
When Paramount comes calling for your script, time to lawyer up.
 
2012-09-09 06:55:51 PM
Always take percentage of gross, not net.
 
2012-09-09 06:57:18 PM
Just think if Congress ran its books like this our deficit would be a bonus and we would have a surplus EVERY year!
 
2012-09-09 06:58:32 PM

urger: Isn't this the same accounting trick that Enron used?


No. Enron was creating valuable assets out of thin air.

This, on the other hand, makes income disappear as expenses, leaving a negative profit.
 
2012-09-09 06:59:21 PM

OriginalGamer: Though it wasn't mentioned in the article, the author of Forrest Gump got screwed by this as well (from Wikipedia):

"Winston Groom was paid $350,000 for the screenplay rights to his novel Forrest Gump and was contracted for a 3% share of the film's net profits. However, Paramount and the film's producers did not pay him, using Hollywood accounting to posit that the blockbuster film lost money-a claim belied by the fact that Tom Hanks contracted for the film's gross receipts instead of a salary, and he and director Zemeckis each netted $40 million. Additionally, Groom was not mentioned once in any of the film's six Oscar-winner speeches."


Groom's mistake was to take net points (which are worthless) instead of demanding gross points.

Stephen King doesn't make that mistake, which is why he's worth hundreds of millions of dollars.
 
2012-09-09 07:02:58 PM

Dwight_Yeast: OriginalGamer: Though it wasn't mentioned in the article, the author of Forrest Gump got screwed by this as well (from Wikipedia):

"Winston Groom was paid $350,000 for the screenplay rights to his novel Forrest Gump and was contracted for a 3% share of the film's net profits. However, Paramount and the film's producers did not pay him, using Hollywood accounting to posit that the blockbuster film lost money-a claim belied by the fact that Tom Hanks contracted for the film's gross receipts instead of a salary, and he and director Zemeckis each netted $40 million. Additionally, Groom was not mentioned once in any of the film's six Oscar-winner speeches."

Groom's mistake was to take net points (which are worthless) instead of demanding gross points.

Stephen King doesn't make that mistake, which is why he's worth hundreds of millions of dollars.


So much for ignorance being bliss!
 
2012-09-09 07:03:12 PM
This reminds me of GE, having a sweet $14B profit, ended up paying no taxes. Loopholes and lawyers will make sure the rich get richer off of someone else's work regardless of the field.
 
2012-09-09 07:09:54 PM

downstairs: OriginalGamer: Though it wasn't mentioned in the article, the author of Forrest Gump got screwed by this as well (from Wikipedia):

"Winston Groom was paid $350,000 for the screenplay rights to his novel Forrest Gump and was contracted for a 3% share of the film's net profits. However, Paramount and the film's producers did not pay him, using Hollywood accounting to posit that the blockbuster film lost money-a claim belied by the fact that Tom Hanks contracted for the film's gross receipts instead of a salary, and he and director Zemeckis each netted $40 million. Additionally, Groom was not mentioned once in any of the film's six Oscar-winner speeches."


He wasn't screwed, he either had a bad agent or no agent at all (and obviously couldn't read a contract very well).
 
When Paramount comes calling for your script, time to lawyer up.


I would still classify as 'screwed' because a normal human being would make the same 'mistake'; I mean for these studios to claim with a straight face the movie didn't make money is obviously untrue. And Groom learned his lesson by flat out refusing to let Hollywood make a movie out of the Sequel he wrote ("Gump and Co") and included the following line on the first page:

"Don't never let nobody make a movie of your life's story," though "Whether they get it right or wrong, it don't matter."
 
2012-09-09 07:12:10 PM
So let me see if I get this all straight:

Hollywood uses phony math to ensure movies never make profit... screwing over the actors and everyone who agrees to a percentage of the profits...

MPAA goes after people who illegally torrent/download movies because it steals from the actors and producers, but pulls the same BS, and never gives a dime of the settlements to the movie makers...

And the law says that this wholesale swindling is legal? They have to be using the actual profits to buy lawmakers to keep this shiat legal instead of actually paying these people to begin with.
 
2012-09-09 07:14:23 PM
On the other end of the scale, Alec Guinness knew that Lucas couldn't afford to pay him for Star Wars (and grew how the game was played), so he took three gross point in lieu of a fee.

Guinness didn't have to work for a living after 1977.
 
2012-09-09 07:14:44 PM
1.bp.blogspot.com

So close!
 
2012-09-09 07:15:13 PM
didyouseethatone.files.wordpress.com

I remember when this was satire.


GAT_00: This buy the way was cleared with the SEC as perfectly legal.


Freudian typo is appropriate.
 
2012-09-09 07:19:07 PM

Saberus Terras: So let me see if I get this all straight:

Hollywood uses phony math to ensure movies never make profit... screwing over the actors and everyone who agrees to a percentage of the profits...

MPAA goes after people who illegally torrent/download movies because it steals from the actors and producers, but pulls the same BS, and never gives a dime of the settlements to the movie makers...

And the law says that this wholesale swindling is legal? They have to be using the actual profits to buy lawmakers to keep this shiat legal instead of actually paying these people to begin with.


Yes. It's important to keep in mind that the majority of people who created the movie and music industies in this country came out of organized crime, specifically bootlegging and rum-running during Prohibition. They brought their accountants who knew how to lie with numbers with them.
 
2012-09-09 07:19:20 PM
Jews
 
2012-09-09 07:19:58 PM

dahmers love zombie: But remember, downloading movies is a bad thing, because actors don't get paid if you do.

/in before the MPAA apologists explain how David Prowse would have made bank if nobody ever torrented Return of the Jedi

 
2012-09-09 07:21:20 PM

Dwight_Yeast: Groom's mistake was to take net points (which are worthless) instead of demanding gross points.


"Fatal Subtraction," a pretty good book on how Art Buchwald sued Paramount and Eddie Murphy for credit for "Coming to America," explains the whole situation quite well. Eddie Murphy laughed at the idea of taking net points -- he calls them "monkey points."

It also explains another tactic that TFA doesn't. Paramount wants a big star like Eddie Murphy to do lots of movies for them, so they sign a $50 million "development deal" with him that goes right into his pocket. They amortize that money against the profits on his hits, so if "Coming To America" shows a profit, Paramount charges off a portion of the development deal money against it. Eddie keeps the money he got, Paramount recoups the money it paid, and the people who ultimately foot the bill are those who stood to gain if "Coming to America" ever showed a profit.

Studios will also transparently roll expenses from other flop movies onto the balance sheets of successful ones in order to recoup the losses on the flops: if the same person did makeup for "Big Successful Hit" and "Miserable Flop," the studio will find a way to massage the makeup invoices for both films into one invoice, and put it on "Hit's" balance sheet (since "Flop" isn't making up its expenses).
 
2012-09-09 07:25:00 PM

OriginalGamer: downstairs: OriginalGamer: Though it wasn't mentioned in the article, the author of Forrest Gump got screwed by this as well (from Wikipedia):

"Winston Groom was paid $350,000 for the screenplay rights to his novel Forrest Gump and was contracted for a 3% share of the film's net profits. However, Paramount and the film's producers did not pay him, using Hollywood accounting to posit that the blockbuster film lost money-a claim belied by the fact that Tom Hanks contracted for the film's gross receipts instead of a salary, and he and director Zemeckis each netted $40 million. Additionally, Groom was not mentioned once in any of the film's six Oscar-winner speeches."


He wasn't screwed, he either had a bad agent or no agent at all (and obviously couldn't read a contract very well).
 
When Paramount comes calling for your script, time to lawyer up.

I would still classify as 'screwed' because a normal human being would make the same 'mistake'; I mean for these studios to claim with a straight face the movie didn't make money is obviously untrue. And Groom learned his lesson by flat out refusing to let Hollywood make a movie out of the Sequel he wrote ("Gump and Co") and included the following line on the first page:

"Don't never let nobody make a movie of your life's story," though "Whether they get it right or wrong, it don't matter."


I thought that everybody knew that if you work for a percentage you go for a percentage of the gross, not the net because of Hollywood math. I've known that since middle school.
 
2012-09-09 07:31:11 PM

ARIT13: Jews


2.bp.blogspot.com

Not a Jew.
 
2012-09-09 07:32:30 PM

Dwight_Yeast: OriginalGamer: Though it wasn't mentioned in the article, the author of Forrest Gump got screwed by this as well (from Wikipedia):

"Winston Groom was paid $350,000 for the screenplay rights to his novel Forrest Gump and was contracted for a 3% share of the film's net profits. However, Paramount and the film's producers did not pay him, using Hollywood accounting to posit that the blockbuster film lost money-a claim belied by the fact that Tom Hanks contracted for the film's gross receipts instead of a salary, and he and director Zemeckis each netted $40 million. Additionally, Groom was not mentioned once in any of the film's six Oscar-winner speeches."

Groom's mistake was to take net points (which are worthless) instead of demanding gross points.

Stephen King doesn't make that mistake, which is why he's worth hundreds of millions of dollars.


He also leveraged a deal after Carrie that insured him more than 25 percent of gross paperback profits, which is where the real money is in publishing.
 
2012-09-09 07:35:58 PM

Uzzah: Dwight_Yeast: Groom's mistake was to take net points (which are worthless) instead of demanding gross points.

"Fatal Subtraction," a pretty good book on how Art Buchwald sued Paramount and Eddie Murphy for credit for "Coming to America," explains the whole situation quite well. Eddie Murphy laughed at the idea of taking net points -- he calls them "monkey points."

It also explains another tactic that TFA doesn't. Paramount wants a big star like Eddie Murphy to do lots of movies for them, so they sign a $50 million "development deal" with him that goes right into his pocket. They amortize that money against the profits on his hits, so if "Coming To America" shows a profit, Paramount charges off a portion of the development deal money against it. Eddie keeps the money he got, Paramount recoups the money it paid, and the people who ultimately foot the bill are those who stood to gain if "Coming to America" ever showed a profit.

Studios will also transparently roll expenses from other flop movies onto the balance sheets of successful ones in order to recoup the losses on the flops: if the same person did makeup for "Big Successful Hit" and "Miserable Flop," the studio will find a way to massage the makeup invoices for both films into one invoice, and put it on "Hit's" balance sheet (since "Flop" isn't making up its expenses).


Ayup. That's why there's so many stinker movies made. The studio will be writing off against "Battlefield Earth" for decades.
 
2012-09-09 07:40:23 PM
This sort of "accounting" should be considered fraud and prosecuted as such.
 
2012-09-09 07:46:18 PM

stoli n coke: Groom's mistake was to take net points (which are worthless) instead of demanding gross points.

Stephen King doesn't make that mistake, which is why he's worth hundreds of millions of dollars.

He also leveraged a deal after Carrie that insured him more than 25 percent of gross paperback profits, which is where the real money is in publishing.


The one which really shocked me was that his deal on the Shining movie rights gave him the rights back after twenty years, which is basically unheard of.

King's either a genius at contracts or he has a helluva of an agent/manager.
 
2012-09-09 07:49:11 PM

OriginalGamer: downstairs: OriginalGamer: Though it wasn't mentioned in the article, the author of Forrest Gump got screwed by this as well (from Wikipedia):

"Winston Groom was paid $350,000 for the screenplay rights to his novel Forrest Gump and was contracted for a 3% share of the film's net profits. However, Paramount and the film's producers did not pay him, using Hollywood accounting to posit that the blockbuster film lost money-a claim belied by the fact that Tom Hanks contracted for the film's gross receipts instead of a salary, and he and director Zemeckis each netted $40 million. Additionally, Groom was not mentioned once in any of the film's six Oscar-winner speeches."


He wasn't screwed, he either had a bad agent or no agent at all (and obviously couldn't read a contract very well).
 
When Paramount comes calling for your script, time to lawyer up.

I would still classify as 'screwed' because a normal human being would make the same 'mistake'; I mean for these studios to claim with a straight face the movie didn't make money is obviously untrue. And Groom learned his lesson by flat out refusing to let Hollywood make a movie out of the Sequel he wrote ("Gump and Co") and included the following line on the first page:

"Don't never let nobody make a movie of your life's story," though "Whether they get it right or wrong, it don't matter."


Agreed. The studios are essentially falsifying records in order to not pay people the money they are contractually owed.
 
2012-09-09 07:52:20 PM

OriginalGamer: [1.bp.blogspot.com image 460x300]

So close!


Dammit. Beaten by less than a minute.
 
2012-09-09 07:52:57 PM

Dwight_Yeast: stoli n coke: Groom's mistake was to take net points (which are worthless) instead of demanding gross points.

Stephen King doesn't make that mistake, which is why he's worth hundreds of millions of dollars.

He also leveraged a deal after Carrie that insured him more than 25 percent of gross paperback profits, which is where the real money is in publishing.

The one which really shocked me was that his deal on the Shining movie rights gave him the rights back after twenty years, which is basically unheard of.

King's either a genius at contracts or he has a helluva of an agent/manager.


I'd go with genius at contracts. Remember, when Carrie got published, he was flat broke and probably didn't have the best agents or managers.
 
2012-09-09 08:01:54 PM
With all the money Hollywood gives to politicians, do you really expect any change?
 
2012-09-09 08:16:36 PM
J Michael Straczinski has them all beat.

BABYLON 5 is a billion dollar franchise, after international syndication & DVDs.

He was showrunner, wrote practically EVERYTHING & got nothing.
 
2012-09-09 08:17:20 PM
You cannot use the word "maths" and the dollar sign in the same sentence. In America, we only have one math.
 
2012-09-09 08:20:52 PM

stoli n coke: Dwight_Yeast: stoli n coke: Groom's mistake was to take net points (which are worthless) instead of demanding gross points.

Stephen King doesn't make that mistake, which is why he's worth hundreds of millions of dollars.

He also leveraged a deal after Carrie that insured him more than 25 percent of gross paperback profits, which is where the real money is in publishing.

The one which really shocked me was that his deal on the Shining movie rights gave him the rights back after twenty years, which is basically unheard of.

King's either a genius at contracts or he has a helluva of an agent/manager.

I'd go with genius at contracts. Remember, when Carrie got published, he was flat broke and probably didn't have the best agents or managers.


I read his autobiography. I don't remember if Carrie is one of the books he didn't remember writing, but I'll go with a good agent.
 
2012-09-09 08:26:20 PM
...And why I feel no guilt about downloading stuff from the newsgroups.
Creators don't get paid, suits do.
 
2012-09-09 08:27:03 PM
But yeah, it's totally pirating that's destroying the film business.
 
2012-09-09 08:33:11 PM

Dwight_Yeast: On the other end of the scale, Alec Guinness knew that Lucas couldn't afford to pay him for Star Wars (and grew how the game was played), so he took three gross point in lieu of a fee.

Guinness didn't have to work for a living after 1977.


IIRC Hamill, Ford, and Fisher all got a (smaller) percentage of the gross, or a percentage of Lucas's percentage, or something. But it's limited to theatrical gross, so nothing from home video. And to this day Lucas owns their likenesses, so they don't have to approve or get paid for any of their appearances of merchandise. Harrison Ford similarly gave up his likeness rights for Indiana Jones.

David Prowse did not get the same deal. He was a man in a suit, and further he did not stay on good terms with Lucas.
 
2012-09-09 08:40:09 PM
Nothing I haven't been saying for years. The talent may be slightly left of center but it's one big factory town that knows capitalism better than the pseudo-conservatives on every level.
 
2012-09-09 08:42:25 PM

Saberus Terras: So let me see if I get this all straight:

Hollywood uses phony math to ensure movies never make profit... screwing over the actors and everyone who agrees to a percentage of the profits...



It clearly states in your policy that no claims made by you will be paid by us.
 
2012-09-09 08:46:07 PM

simplicimus: I read his autobiography. I don't remember if Carrie is one of the books he didn't remember writing, but I'll go with a good agent.


No the books he doesn't remember writing are the Dark Half and Needful Things. Carrie was written in the kitchen of a rented house (trailer?) while he was still working as a teacher.
 
2012-09-09 08:55:36 PM

OriginalGamer: Winston Groom was paid $350,000 for the screenplay rights to his novel Forrest Gump and was contracted for a 3% share of the film's net profits. However, Paramount and the film's producers did not pay him, using Hollywood accounting to posit that the blockbuster film lost money-a claim belied by the fact that Tom Hanks contracted for the film's gross receipts instead of a salary, and he and director Zemeckis each netted $40 million.



That's the fault of Groom's agent/lawyer, or the result of him being a small enough name at the time that he couldn't get a better deal. If a star of Hanks' caliber worked for back-end money only, then he had a Modified Adjusted Gross deal, which pretty much can only be landed by stars like him. In essence, the film doesn't "make money" until the people with the sweetest deals like Hanks and Zemeckis finish getting what they were contracted to get. The bottom line is never count on making another dime past what they pay you up front. I'd take that $350k, thank them, and move onto the next project, never expecting another cent from the deal.

It was shiatty that he wasn't mentioned at the Oscars, but that's a separate issue.
 
2012-09-09 09:01:11 PM
So Warwick Davis was screwed 2x?

/saw him on a mini segway two weeks ago
 
2012-09-09 09:04:31 PM
"Maths?"
You're not a native American-speaker, are you, subby?
 
2012-09-09 09:06:49 PM

bizzwire: "Maths?"
You're not a native American-speaker, are you, subby?


Welcome to Fark.
 
2012-09-09 09:27:08 PM

Warlordtrooper: This sort of "accounting" should be considered fraud and prosecuted as such.


It is if you or I do the same thing.

If I did a client's books in the same manner to "Hid" profits from the goverment on a tax form I'd be in jail.
 
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