How do movies that gross many millions of dollars over their budget still result in the production company losing money?

Question

For example- I looked at The Mummy (2017) on Wikipedia, which had a budget of $125-195 million, and grossed $410 million worldwide at the box office, yet it also says the studio lost $95 million. How is that possible?

In: 99

Answer 1

It’s a process called [“Hollywood Accounting.”](https://en.wikipedia.org/wiki/Hollywood_accounting)

The studio overstates their costs in every way imaginable — including paying a shell company extortionate rates for “marketing” — until the movie appears to have lost money on paper.