Chapter 30: Divide the Cake
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The North American box office of $130.02 million for movies in this era can be said to be a very good result, but this huge amount of money will not fall into the pocket of any person or company, from theaters to distribution, and from production to investment, many aspects will share this cake.
In the last days of June, the accounting firm, representing Duke and Mrs. Leah, began a close business relationship with Twentieth Century Fox and Lucasfilm, reconciling large and small dense accounts and shares.
This kind of thing does not need Duke to intervene, and he will not do anything but add to the chaos, and although PwC's professional accountants charge a lot of money, they are trustworthy in terms of business ability and reputation.
Besides, the lawyer who represents Duke will also supervise the whole process.
Twentieth Century Fox signed the most conventional split account with the theater chain, and after the theater company subtracted the fixed expenses, it was divided with the distributor according to different proportions at different times of the release, and after deducting taxes and other payments, Twentieth Century Fox received a little more than $62 million in shares.
This part of the money has not yet been moved by Lucasfilm, and as the distributor, Twentieth Century Fox can get a 15 percent distribution cut of the North American box office - $19.5 million!
took away the distribution commission, and Fox also had to deduct the expenses paid in advance for publicity and public relations, "Speed of Life and Death" printed more than 5,100 copies, with a unit price of about $600, and the cost of large-scale printing will drop some, spending a total of $3 million, in addition to the film's preview screening public relations, warehousing and transportation, capital recovery costs, hiring investigation companies, secretly checking the theater box office, various publicity expenses, etc., Fox invested a total of $8.5 million.
In other words, Twentieth Century Fox will take another $11.5 million from it, and they will be able to take half of the $62 million in total.
Excluding the $11.5 million in expenses, the remaining $19.5 million is almost all gross profit on the part of Fox.
Distribution companies have a wide range of publicity channels and strong distribution capabilities, they can stand at the top of the industry is not for no reason, Hollywood does not mean that the acquisition of a company with distribution rights, can achieve the level of six or even second-tier distributors in publicity.
If that were the case, Lucasfilm wouldn't have relied so heavily on the distribution channels of Twentieth Century Fox and Paramount for projects such as Star Wars and Raiders of the Lost Ark. Not well-connected? Too incompetent?
If the distribution problem was really easy to solve, later Pixar Studios and DreamWorks Animation Studios would not have gone around looking for distributors, the former was so aggrieved under Disney, and the latter even wanted to sell themselves to distributors.
After Twentieth Century Fox took the money that belonged to them, of the remaining more than $31 million, more than $1 million was used to pay the remaining one-third of the remuneration of the actors and crew, as well as various industry association expenses, including the actors' union, and then the money went to Lucasfilm's account, Lucasfilm, according to the agreement signed with Leah and other investors, would definitely not choose a $2 million guarantee, but gave priority to taking a 10% share of the North American box office. They took $13 million of it.
The remaining $17 million, it's the turn of investors, including Duke, to share, Mrs. Leah's $10 million accounts for two-thirds of the cost of making the company, she can get more than $10 million, it seems that there is still something to earn, but don't forget, there are taxes to pay, and after paying taxes, this money must be a loss.
If you look at this situation, investors who put money into Hollywood should cry.
However, this is only a part of the film's revenue at the North American box office, and "Life and Death" can still get a lot of money in other aspects.
First of all, there are the TV rights and video cassette rights in North America, because Twentieth Century Fox has the power to take a 50 percent cut, and they lead the negotiation team composed of Lucasfilm, Duke's agent, and so on, and Fox just sold the peripheral rights of "Ultimator 2" at a high price in collaboration with Carlock Films last year -- $10 million for seven years for North American videotapes and $7 million for TV -- and they have a lot of experience in this area.
Duke was also not involved in the negotiations, he would not have a say in the negotiations that Twentieth Century Fox completely dominated, and it would be useless to go, and as the biggest profitee, Twentieth Century Fox would definitely want to sell for a high price.
After several tug-of-war negotiations, the North American videotape rights to "Life and Death" were sold for $7 million, the television rights were received for $5 million, and Twentieth Century Fox took $6 million first.
Although there is a little red-eyed, Duke knows that this is the rule of Hollywood, and it is impossible for newcomers to break the rules, otherwise all of Hollywood will be your enemy.
Hollywood is not a place where good enough movies can run rampant.
Of course, as a director who has taken the first step to success, Duke will not let go when it is time to fight for it.
Duke sat in a chair in the conference room on the top floor of the Fox Building, and as the morning drew to a close, he barely spoke, just watched as Nancy Josephson rolled up and down and exchanged words with Fox's negotiators.
This is the negotiation of the overseas copyright of "Life and Death", which began after the film was removed from North America, and now it is the fifth round, but the two sides have not been able to reach a consensus.
Since Lucasfilm had no chance of taking a cut, George Lucas, in addition to sending an executive president to sit in the seat and vaguely show his support, handed over the leadership of the negotiations to Leah, the largest investor, and Mrs. Leah threw it directly to Duke, who naturally chose his new agent as the plenipotentiary.
"The movie we negotiated is not a bad movie like "Alien 3"!"
Rising from her chair, Nancy paced back and forth in the conference room and walked behind the back of the Fox negotiators, almost roaring, "This is "Life and Death, Duke Rosenberg's "Life and Death!" A mega-hit movie that grossed more than $130 million in North America! You paid $65 million for the overseas rights of "Terminator 2", what is its North American box office? ”
Nancy spoke extremely fast, not giving the other party a chance to interject at all, "It's just a little more than $200 million!" "Life and Death" is to sell all the overseas rights and sequel shooting rights to you in a package, and the price is 50 million US dollars! Is this price high? ”
After playing the lion's roar, Nancy sat back in her chair and changed to a factual and reasonable tone, "With the drastic changes in Eastern Europe and the collapse of the Soviet Union, our films have a broader market, and now most mainstream Hollywood commercial films can earn more overseas profits than North America......"
Like a professional at the analytics firm, Nancy gave a few examples of Hollywood films making money overseas, "Don't say 'Life and Death' would be an exception! The film will definitely make it to the top 10 of the annual box office list in North America, and if such a movie can't be profitable overseas, Fox won't be able to attack the overseas market. ”
She is a typical and capable agent! Here's what Duke says about Nancy's work.
This shrewd woman, when she should be haughty, would never give anyone a good color; When it's time to pull down the skin, it's thick enough to block the Mississippi River; When it comes to high-pitched vocalization, her voice is comparable to that of a lion in Disney's Animal World; And when it's time to speak slowly, she will be gentler than **.
Such a highly professional broker is also the broker that Duke needs.
As long as she doesn't tear her skin, Nancy can fight with Fox, and with her suspension, Duke can avoid direct contact with Fox on sensitive issues, and there is a buffer between the two sides.
Although $50 million is the package price of the entire copyright, Duke is not James Cameron after all, Keanu Reeves is not Arnold Schwarzenegger, and this price is unrealistic.
Of course, the $25 million offered by Twentieth Century Fox is also unrealistic, and they are clearly robbing!
Another long day of negotiations, both sides made some concessions, and by the afternoon, almost at the base price of $10,000, an agreement was finally reached, and Twentieth Century Fox bought the overseas rights to "Life and Death" and the sequel rights for $37 million.
The price has been pushed to this point, and there is also part of Duke's reason, he confesses that Nancy must ask Twentieth Century Fox to pay the amount within a month, Mrs. Leah's one-year mortgage is about to expire, and if there is no money to pay it back by then, not only will the Santa Fea Company's working capital be used, but even the house will have to be taken away by the bank, and the Rosenberg family will be a joke for the entire Los Angeles high society.
As for the way of sharing overseas distribution with Fox, Duke basically didn't think about it, not to mention his mother's accounting problems, in the case that Lucasfilm clearly will not participate, and he lacks sufficient preparation on his side, there are very few measures to monitor Fox, and the distributor falsely declares and distributes, tax deductions and many other means, only unexpected, without them, they can't do it, especially the long-term revenue of video tapes and TV copyrights, there are more places to do tricks.
Yes, there are various laws and regulations in the United States, but even in North America, where regulations are strict, Hollywood giants dare to cheat Wall Street money, let alone overseas markets all over the world.
Now is not the era of smooth information in the future, it is too difficult to regulate, rather than pinning your hopes on Fox's moral standards, it is better to sell it out.
This is also the consensus of all investors in the film.
In this way, it is clear that investors can share in the proceeds, with $17 million from the North American box office balance, $6 million from the remaining North American videotape and television rights, plus the $37 million that has just been negotiated, for a total of $60 million.
Duke gets a one-hundred-and-fifty share of that, or $400,000, and although he has to pay a lot of personal income crimes, it's still very good compared to the $100,000 director's remuneration converted into investment.
His mother was able to take $40 million of it, and even if he had to pay taxes, the return on a year's investment would be terrifying.
(The tax problem of Lao Mei is not even clear to the citizens of Lao Mei, we can't figure it out, most of them are just simple to mention taxes, the box office tax of the cinema chain is very low, it seems to be about three percent, listen to what colleagues say, it may not be accurate, in short, this is a more idealized cake sharing model, in fact, investors can often get less money, Hollywood even Wall Street vampires dare to pit money)