"Harry Potter" Movie Makes $938 Million, But is Still in the Red
To those of us who live and work in Hollywood, the news that Harry Potter and the Order of the Phoenix grossed almost $1 billion, but somehow still about $167 million in the red makes perfect sense.
It's all about the difference between gross profit -- that is, money off the top, before fees, interest, and other charges are factored in -- and net profit, which is what's supposed to be left over after everyone else has been paid.
In reality, that number is almost impossible to reach, because fees and interest charges -- especially what the studio charges the production as a "distribution fee" -- keep going up, keep swallowing up the box office dollars (and euros, and home video sales, too) for as long as the picture is out there.
It doesn't make any sense to anyone with a rudimentary understanding of basic accounting, or decency. But the easiest way to explain it is this: imagine a system invented by congressional Democrats.
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Jun '10
Re: "Harry Potter" Movie Makes $938 Million, But is Still in the Red
Like they say, "the most creative people in Hollywood are the accountants."
May '10
Re: "Harry Potter" Movie Makes $938 Million, But is Still in the Red
Is it possible, even theoretically, to be a scriptwriter or actor in Hollywood without belonging to a union?
What about in Austin? Unions don't have quite the same reputation here in Texas.
May '10
Re: "Harry Potter" Movie Makes $938 Million, But is Still in the Red
I'd always heard stories about the creative accounting used by the studios and how most movies, somehow, never went into the black. I always thought the stories were a little overdone--that, somehow, some tiny bit of sanity would intrude, that accounting that bad could never possibly be legal.
Seeing that document, seeing what passes for accounting in their world, I am astounded. And a little disgusted.
Amazing.
Jul '10
Re: "Harry Potter" Movie Makes $938 Million, But is Still in the Red
The strange affinity between Hollywood and the Democratic Party is explained.
May '10
Re: "Harry Potter" Movie Makes $938 Million, But is Still in the Red
Read Edward Jay Epstein's book, The Big Picture: Money and Power in Hollywood, in which he breaks down the cost of a lowish budget action fillum (was it "Gone in 60 Seconds"? I don't remember- something about auto theft....) and discusses all of the different revenue streams and accounting issues involved. This stuff started back when the contract stars were arguing with the studios.
My righteous accountant wife would be in a padded cell after ten minutes in that environment.
Re: "Harry Potter" Movie Makes $938 Million, But is Still in the Red
Duane, any decent person would. Which is why my little town is filled with....the indecent.
If you've got a head for harder numbers, Arthur Devany's book, Hollywood Economics, is just wonderful.
Re: "Harry Potter" Movie Makes $938 Million, But is Still in the Red
Maybe the trouble with the mattress business is that Sleep Train, Mattress Discounters and the rest have all hired ex-Hollywood accountants.
Jul '10
Re: "Harry Potter" Movie Makes $938 Million, But is Still in the Red
Well, Washington and car dealerships could not absorb all of the graduates of the Hollywood school of accounting.
May '10
Re: "Harry Potter" Movie Makes $938 Million, But is Still in the Red
kcarlin: Well, Washington and car dealerships could not absorb all of the graduates of the Hollywood school of accounting. · Jul 9 at 12:12pm
Well, the car dealerships were short on pink shirts and pinkie rings.