In Shahai Entertainment's office, Mary sat across from Ronan and asked, "How is this account calculated?"

Yesterday, Sony Entertainment's overseas rights fees paid in two installments have all been received, "Human Erasure Project" is a typical financing project, Ronan has signed a contract with investors in Abu Dhabi, and is about to go to Abu Dhabi for refinancing, and will definitely give investors a profit share.

But how to divide it, there is a lot of room for maneuver inside.

"We try to standardize our operations as much as possible. Ronan has been studying Hollywood's financial norms and accounting standards since May, as well as related laws, and has enough knowledge of this aspect, since signing a contract with Sony Entertainment. "It's about the next step in the financing plan, and you can't go overboard," he said. ”

Mary nodded, not to go overboard, not to be unable to do it.

Ronan picked up the teacup and took a sip, then said: "It is a common practice in the industry that the tax will be deducted first for next year's tax return, and then 15% of the management expenses, which will also be deducted." ”

This is a legal expense incurred in the process of filming and production, and the film is financed and filmed, but Shahai Entertainment is the operator of the project, and the costs of manpower, time, loss, office and operation management incurred during the period also belong to the costs paid by Shahai Entertainment.

Mary didn't speak, but just made a note in her notebook that fifteen percent of the administrative expenses were not much, that is, $3.75 million.

This percentage is, of course, calculated before tax.

Ronan put down his teacup and continued: "$25 million is the licensing fee for the packaging of the two films "Human Eradication Project" and "Jedi's Life", isn't it appropriate for one film to share half?"

Mary shook her head and reminded, "We need to raise money over there, we can't go too far." ”

"What about a quarter?" Ronan asked again.

This fundraising is also related to the next step to establish a distribution channel, and now the effort is for more gains.

Mary thought for a while and said, "It's not suitable, the proportion of "Jedi" can't be too high. ”

Ronan nodded slightly, pondered for a moment, and said, "$3 million." ”

As a conscientious entrepreneur and capitalist, he was quite generous.

Many companies in the industry let bad movies take away one-third or even half of their revenue at every turn.

Sure enough, I'm a good person.

Well...... That should be true.

With the North American box office of "Jedi's Life" of $800,000, the most optimistic overseas copyright is to sell $500,000.

What's more, no one cares about the overseas copyright of this bad film, if it is not packaged and processed, it will only rot in your hands.

"$3 million?" Mary thought for a moment and said, "Two films sold in a package, one of which only accounts for one-eighth, should be fine." ”

The Arabs don't understand these legal and compliant methods of Hollywood, and they originally packaged "Jedi" to dilute profits.

"And the last item, profit sharing. Ronan said directly: "This is according to the law and the contract, we are a film production enterprise, and we naturally enjoy 20% of the film's profit share." ”

This is a small clause in the contract signed at the beginning, Shahai Entertainment, as the producer, of course, does not work for nothing, and can give priority to 20% of the profits.

With this 20 percent ratio, Ronan also discovered in his conscience in order to attract investment that the precondition for distribution of really black-hearted companies is not profits, but total income.

Mary wrote down another $5 million in her notebook.

Ronan resisted the desire to make more expenses, and said to Mary, "Make the account more beautiful, and standardize it." ”

Mary nodded: "I'm going to be busy with nothing else." ”

"Go ahead. Ronan answered.

In just two days, a financial statement of the Human Eradication Plan's revenues outside of North America was submitted by Mary to Ronan.

The $25 million paid by Sony Entertainment, after deducting $3.75 million in management fees, $3 million in profits from Jedi, $5 million in producer profits, plus pre-withheld taxes and producer alliance management fees, etc., leaves $11 million left.

For the next financing consideration, Ronan gritted his teeth and vomited blood.

When the time came to Abu Dhabi, the relevant reports were dug out and proved to the Arabs: Look, what a trustworthy man I am.

For Hollywood, investors from home and from overseas are two completely different groups.

Discrimination, any country and industry.

With a legal income of more than 10 million US dollars, with such a sum of money, Ronan is more confident, and he plans three plans at the same time.

The first is the upcoming trip to Abu Dhabi, codenamed "Operation Desert", the second is to solve the issuance channel, which is one of the important reasons for him to continue to raise funds, and the other is a possible future trip to India, codenamed "Ahsan".

Especially the latter action, after studying the laws and regulations here and the prevailing industry rules in the industry, Ronan is ready to play a big game.

Robert inquired that people from India have been more active in Hollywood recently, and it seems that some Indian investment institutions are making preliminary preparations for future investment in Hollywood.

I'm not afraid that you want to invest, I'm afraid that you don't want to invest.

In addition, Ronan once again emphasized that Shahai Entertainment followed Lionsgate as an example to acquire a distribution company as soon as possible.

George and Robert had found information on two small distribution companies, and Ronan got together to study them for a while, and then gave up.

These two issuing companies are too small in scale and the channels are not perfect at all, and it is not as appropriate to acquire them as a new issuing company.

Ronan knew the importance and key role of distribution, as the case of Lionsgate distributing Project Human Removal for Shahai Entertainment was in front of him.

After six weeks of screenings, "The Human Erasure Project" has exhausted its full potential in the North American market and is released before Thanksgiving.

Six weeks of running time isn't long, but it's also more than a week in theaters than "Halloween 7" starring Jamie Lee Curtis.

The North American box office of "Human Eradication Project" ended up at $52.5 million, which can be said to be a box office hit compared to the public production cost of $11 million.

The film has just been released, and with the participation of relevant staff of Shahai Entertainment, Lionsgate quickly completed a number of offline releases, and a large amount of licensing fees plus North American box office sharing were paid one after another.

In terms of licensing fees, Lionsgate has its own distribution channels for videotapes and DVDs, and according to the prevailing rules in the industry, the North American home theater rights consisting of videotapes and discs are licensed to Lionsgate in the form of a basic transfer fee of $5 million plus a 20% lease sales share.

Then, the public television station will have a broadcast rights of $3 million for 10 years, cable television stations for 10 years for broadcast rights of 2 million dollars, and Internet broadcast rights for 500,000 dollars for five years.

In Hollywood's commercial films, horror films have always been weak, and the derivatives license has only sold $1 million.

Lionsgate has just been established, and the Shahai Entertainment it faces is not a newcomer or a company outside the industry, and it still follows the spirit of the contract very much, and after the various revenues are received, it will start the profit delivery with Shahai Entertainment.

In terms of box office, the North American box office was $52.5 million, and under the prevailing rules, after deducting theater revenue and various taxes, the final box office share of Lionsgate was $26 million.

Under the distribution contract, Lionsgate took 28 percent of the North American box office, or $14.7 million, including promotional costs.

The distribution of home theater rights, new media and television rights was 20 per cent, $2.1 million.

Fifty percent of derivatives, $500,000.

Lionsgate earned $17.3 million from "Human Eradication" with a total investment of less than $6 million.

This can be said to be a windfall profit.

A small-budget horror film that exploded at the box office, even if it is included in the publicity and distribution expenses, can create an amazing revenue ratio.

Since the end of November, Lionsgate has paid various shares to Shahai Entertainment, and in more than a week, Shahai Entertainment has received a total of $20.2 million.

Excluding the $11 million disclosure cost, coupled with Shahai Entertainment's investment in the promotion and distribution stage of the film, Shahai Entertainment, the producer, has made a profit in the North American market, and is not even as profitable as Lionsgate, the distributor.

(The revenue calculation rules are based on the books "How Hollywood Talks Business" by Dinah Upston and Augustus Fanny's "A Guide to the Business Operations of Independent Films", which may not be the same as the truth, but the authors of both books are practitioners in the entertainment industry, and there are not many differences.) ）

(In addition, as for the publicity and distribution costs, which have already been explained above, this part of the expenses is incorporated into the commission.) Most of the films that take a 30 percent cut and have to be billed separately for publicity and distribution are produced by production companies and distribution companies under the same group, and the main purpose is to dilute profits. ）