As an example – I read recently that Gemini man (Will Smith movie) was a box office bomb and paramount lost 111mn USD because of this movie. However the budget is 138mn USD and box office collection is 173.5mn USD. With box office collection this high and budget lower than box office, what were the reasons for paramount to lose 111mn? Baffling to me.
Source: https://en.m.wikipedia.org/wiki/Gemini_Man_(film)
In: Economics
Even when a money makes money after all expenses are paid, they still can lose money. One way is to create a company to do marketing and then have that company way overcharge the studio for its work on the movie. So the movie doesn’t make a profit due to paying that, but the studio still made the money.
This is called Hollywood accounting, and it’s why only a sucker contracts for a percentage of the net profit. It’s how they screwed the Forrest Gump writer out of his money, which is why there was never a sequel. He refused to get screwed by the studios again.
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