History UsefulNotes / HollywoodAccounting

* Ben Affleck agreed to take his salary for ''PearlHarbor'' from the net profits. Oops.

* New Line Cinema was sued over ''Film/TheLordOfTheRings'' by Creator/PeterJackson (leaving ''TheHobbit'' in DevelopmentHell for several years), the Tolkien estate, and over a dozen actors.

* In 2007, Paul Haggis sued the producers of the 2004 film ''{{Crash}}'' for not giving him $4.7 million in unpaid royalties. Studio executives argued that the movie (which was made for $7.5 million, and grossed ten times that amount at the box office) wasn't profitable when the accounting was done. The co-writer (Bobby Moresco) and co-producer (Cathy Schulman) also sued for royalties.

* Because the first ''{{Film/Saw}}'' film did not have as high a budget as it's sequels, CareyElwes signed on to play Dr. Gordon in exchange for a percentage of the total gross. When the film proved to be a monstrous hit, Elwes felt he had been shortchanged (receiving only 1% of the profits) and refused to return for the sequel or even allow his image to be reused.

* ''Film/HarryPotter [[HarryPotter/HarryPotterAndTheOrderOfThePhoenix and the Order of the Phoenix]]'' [[http://entertainment.slashdot.org/story/10/07/09/1621218/Hollywood-Accounting-mdash-How-Harry-Potter-Loses-Money came]] [[http://www.techdirt.com/articles/20100708/02510310122.shtml under]] [[http://www.deadline.com/2010/07/studio-shame-even-harry-potter-pic-loses-money-because-of-warner-bros-phony-baloney-accounting/ fire]] mid-2010 after an accounting report was leaked.

* Because the first ''{{Franchise/Saw}}'' film did not have as high a budget as it's sequels, CareyElwes signed on to play Dr. Gordon in exchange for a percentage of the total gross. When the film proved to be a monstrous hit, Elwes felt he had been shortchanged (receiving only 1% of the profits) and refused to return for the sequel or even allow his image to be reused.
** Fortunately, Elwes was able to come to an agreement with Lionsgate Films and filmed [[OneSceneWonder two short scenes]] explaining what happened to Dr. Gordon and where he was now. [[spoiler: As well as a third scene, [[TheReveal he was revealed to have become Jigsaw's true successor]].]]

** Fortunately, Elwes was able to come to an agreement with Lionsgate Films and filmed [[OneSceneWonder two short scenes]] explaining what happened to Dr. Gordon and where he was now. [[spoiler: As well as a third scene, [[TheTwist he was revealed to have been Jigsaw's true successor]].]]

* Paramount and CBS have never paid any of the ''Franchise/StarTrek'' actors for the use of their image in any of the merchandising that has been sold for the series, claiming that it has lost money in all of them. It is fairly impressive that they keep producing all this merchandise that does nothing but lose money, isn't it?

* New Line Cinema was sued over ''Film/TheLordOfTheRings'' by PeterJackson (leaving ''TheHobbit'' in DevelopmentHell for several years), the Tolkien estate, and over a dozen actors.

* GaryOldman has yet to be paid for ''TheProfessional.''

* WarnerBros' ''{{Film/Batman}}'', despite earning $253 million at the box office, [[http://articles.latimes.com/1991-03-21/entertainment/ca-796_1_net-profit posted a $36 million loss]] when the accounting was done. According to WB's formula, the studio would have had to take in an additional $150 million before the movie could begin turning a profit. Many criticized the production company for using a "rolling break-even point" to justify the film's losses. According to the Los Angeles Times (who did their own investigation), the film still should have made close to $90 million in profit by the time all expenses were paid.

* Sigourney Weaver was told that the studio lost money on the original ''{{Ghostbusters}}'', despite it being one of the most successful films ever made, and thus she wasn't going to get any royalties from it. Supposedly she showed up with an army of lawyers and accountants to check the books, and the studio offered her an exorbitant amount of money to appear in the sequel to keep her from looking at them.

* The cast and producers of the film ''MyBigFatGreekWedding'' (with the exception of lead actress Nia Vardalos) ended up going to court to sue Playtone Pictures, HBO and Gold Circle Films for unpaid profits. The studios claimed the film lost $20 million, despite being one of the highest-grossing independent films of all time (and a record-holder for highest-grossing independent for several years).
* Ben Affleck agreed to take his salary for ''{{Pearl Harbor}}'' from the net profits. Oops.

* Non-film example: JMichaelStraczynski got screwed out of his cut of the profits from ''[[BabylonFive Babylon 5]]''. Fortunately, he was DoingItForTheArt anyway.

* Paramount has never paid any of the ''Franchise/StarTrek'' actors for the use of their image in any of the merchandising that has been sold for the series, claiming that it has lost money in all of them. It is fairly impressive that they keep producing all this merchandise that does nothing but lose money, isn't it?

* Paramount has never paid any of the ''StarTrek'' actors for the use of their image in any of the merchandising that has been sold for the series, claiming that it has lost money in all of them. It is fairly impressive that they keep producing all this merchandise that does nothing but lose money, isn't it?

* The Stop Online Piracy Act/Protect-IP Bill backlash in 2012 resulted in the legal sector criticizing the Motion Picture Association of America for creative accounting that claimed Hollywood lost $58 billion in profits due to online piracy. [[http://www.techdirt.com/articles/20120104/04545217274/cato-institute-digs-into-mpaas-own-research-to-show-that-sopa-wouldnt-save-single-net-job.shtml One legal report]] showed that the ''actual'' amount of money lost to piracy was less than 1% of the original claim, and that the only thing piracy effects is redistribution of disposable income for other purposes, and the notion that money not spent on movies disappears from Hollywood wasn't true.

* Non-film example: JMichaelStraczynski got screwed out of his cut of the profits from ''[[BabylonFive Babylon 5]]''. Fortunately, he was DoingItForTheArt anyway.
--> '''JMS:''' The show, all in, cost about $110 million to make. Each year of its original run, we know it showed a profit because they TOLD us so. And in one case, they actually showed us the figures. It's now been on the air worldwide for ten years. There's been merchandise, syndication, cable, books, you name it. The [=DVDs=] grossed roughly half a BILLION dollars (and that was just after they put out S5, without all of the S5 sales in). So what does my last profit statement say? We're $80 million in the red. 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.
** HarlanEllison, in a clip from his film "Dreams With Sharp Teeth", also discusses his involvement with ''Babylon 5'', notably when Warner Brothers asked him to provide clearance rights for an interview he did during the show's production for inclusion on the DVD set. When he asked what he would be paid, the studio told him that they didn't have enough money in the budget to pay him royalties (in addition to telling him that he'd have to go buy a copy of the DVD set in a store because they couldn't justify sending him a set).
* New Line Cinema has been sued over ''Film/TheLordOfTheRings'' by PeterJackson (leaving ''TheHobbit'' [[DevelopmentHell up in the air for the better part of 8 years]]), the Tolkien estate, and over a dozen actors.
* ''Film/HarryPotter [[HarryPotter/HarryPotterAndTheOrderOfThePhoenix and the Order of the Phoenix]]'' [[http://entertainment.slashdot.org/story/10/07/09/1621218/Hollywood-Accounting-mdash-How-Harry-Potter-Loses-Money came]] [[http://www.techdirt.com/articles/20100708/02510310122.shtml under]] [[http://www.deadline.com/2010/07/studio-shame-even-harry-potter-pic-loses-money-because-of-warner-bros-phony-baloney-accounting/ fire]] mid-2010 after an accounting report was leaked. (a few of those articles point out some of the expenses end up on the studio or its parent company)
* ''Film/BattlefieldEarth'' was the last film produced by Franchise Studios, as it turned out they made a living out of "over budgetting" bad movies and keeping the excess as profit. After this stinker the FBI closed in and reclaimed the 100 million...er 75 million...er 40 million spent.
* This was the origin of the StanLee vs [[MarvelComics Marvel Enterprises]] lawsuit: Stan's contract said he was entitled to 10% of Marvel's profits from their movies ... and Marvel's share of the net from ''{{Blade}}'' turned out to be zero. When Marvel got wise and started asking for a percentage of the gross, they tried to claim that Stan's contract didn't cover that. A court of law disagreed.
* Ben Affleck agreed to take his salary for ''{{Pearl Harbor}}'' from the net profits...oops.

* In 2007, Paul Haggis sued the producers of the 2004 film ''{{Crash}}'' for not giving him $4.7 million in unpaid royalties. Studio executives argued that the movie (which was made for $7.5 million, and grossed ten times that amount at the box office) wasn't profitable when the accounting was done. The co-writer (Bobby Moresco) and co-producer (Cathy Schulman) also sued for royalties.
** The film's producer, Bob Yari, later went bankrupt over the suit (along with a number of money-losing projects he self-distributed). He was later sued in 2012 for the same thing over the same movie.
* GaryOldman has yet to be paid for ''TheProfessional.''
* David Prowse (the man in [[StarWars Darth Vader's suit]]) claimed Lucasfilm [[http://www.slashfilm.com/lucasfilm-tells-darth-vader-that-return-of-the-jedi-hasnt-made-a-profit/ hasn't paid him]] for ''ReturnOfTheJedi''.

* David Prowse (the man in [[StarWars Darth Vader's suit]]) claimed Lucasfilm [[http://www.slashfilm.com/lucasfilm-tells-darth-vader-that-return-of-the-jedi-hasnt-made-a-profit/ hasn't paid him]] for ''TheReturnOfJedi''.

* GaryOldman has yet to be paid for ''TheProfessional.''

->''Darling! This is the Industry! The really creative people are the accountants. A big studio got over half the profit, after setting breakeven at about three times the cost, taking twenty-five percent of income as an overhead charge, and taking thirty percent of income as a distribution charge, plus rental fees, and prime interest on what they advanced.''
->-- from ''Free Fall in Crimson'' by John D. [=MacDonald=]

->''Well, it's like stupid points. Stupid to take the points. "Won't be any net profits?" You sit there with your points going, "Eeeh, eeh, eeh, eeh, eeh."''
->-- EddieMurphy explaining why he called net points "monkey points"

UsefulNotes/HollywoodAccounting is how a production studio weasels out of paying royalties or anything else based on a percentage of profit: just [[BlatantLies over-estimate]] your expenses, and bingo, there ''is'' no profit, or at least a lot less of it - at least on paper, even if the gross reaches into the billions. Some really outrageous cases have led to lawsuits.

See also BoxOfficeBomb which is about low gross revenue actually happening instead of being on paper.

* "Hollywood accounting" is what led to the Writer's Guild of America strike in 2007. The WGA (representing hundreds of film and television writers), in a nutshell, decided to strike because the Alliance of Motion Picture and Television Producers were deadset against increasing DVD royalties for said writers. At the end of the strike, the WGA accepted a minor increase in royalties, far below what they had originally set out to achieve.

* Ben Affleck agreed to take his salary for {{Pearl Harbor}} from the net profits...oops.

** The film's producer, Bob Yari, later went bankrupt over the suit (along with a number of money-losing project he self-distributed). He was later sued in 2012 for the same thing over the same movie.

* In 2007, Paul Haggis sued the producers of the 2004 film ''{{Crash}}'' for not giving him $4.7 million in unpaid royalties. Studio executives argued that the movie (which was made for $7.5 million, and grossed ten times that amount at the box office) wasn't profitable when the accounting was done. The co-writer (Bobby Moresco) and co-producer (Cathy Schulman) also sued for royalties.

UsefulNotes/HollywoodAccounting is how a film studio weasels out of paying royalties or anything else based on a percentage of profit: just [[BlatantLies over-estimate]] your expenses, and bingo, there ''is'' no profit, or at least a lot less of it - at least on paper, even if the gross reaches into the billions. Some really outrageous cases have led to lawsuits.

* Ben Afleck agreed to take his salary for {{Pearl Harbor}} from the net profits...oops.

* Paramount has never paid any of the ''StarTrek'' actors for the use of their image in any of the merchandising that has been sold for the series, claiming that it has lost money in all of them. It is fairly impressive that they keep producing all this merchandise that does nothing but lose money, isn't it?

* Ben Afleck agreed to take his salary for {{Pearl Harbor}} from the net profits...oops.

HollywoodAccounting is how a film studio weasels out of paying royalties or anything else based on a percentage of profit: just [[BlatantLies over-estimate]] your expenses, and bingo, there ''is'' no profit, or at least a lot less of it - at least on paper, even if the gross reaches into the billions. Some really outrageous cases have led to lawsuits.