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July 25, 2006
Crash Participants Apparently Suffering Standard Operating Procedures
I was so looking forward to reading a New York Times movie business story that just plain told the story… but again, my hopes were dashed to the ground in a fit of journalistic hyperbole and a lack of basic math skills.
I don’t get it.
Sharon Waxman wrote a piece headlined “‘Crash’ Principals Still Await Payments for Their Work.”
The theoretical thesis of the piece is explained as, “When a movie costs $7.5 million to make and takes in $180 million around the world, it seems logical to think that the people who created the film would have become very rich.”
It's theoretical because instead of explaining – which is not hard to do… keep reading – why a positive-on-the-gross-revenues-ledger $172.5 million doesn’t lead to huge money for anyone but the financers and the distributor in this case, Waxman and The New York Times seems much more interested in painting a portrait of hurt feelings, victimized agents, and inferred, but never specific, much less proven, monkey business.
What does a sentence like, “Mr. Haggis and Mr. Moresco were both in dire financial straits when they made the movie in 2004, but deferred their salaries — about $94,000 and $47,000, respectively — to gain approval to move ahead on the film,” tell us?
How does the Paper of Record define “dire financial straits?” Mr. Haggis had continued working as a TV writer, though he wasn’t producing shows at the time. He had Million Dollar Baby on the way. So how dire is “dire?”
As for Mr. Moresco – who Ms. Waxman claims didn’t talk to her for this story – “Mr. Moresco and his wife, Barbara, for example, were still short of cash, living in a rented house in Burbank,” Short of cash? There is a big difference between being short of cash with a $25,000 a month nut and being short of cash with a $2000 a month nut. Which is it? Rental house? Were they looking to buy? Had they ever owned a house? What is Mr. Moresco's history?
I am not saying that any of these questions are appropriate to answer in the New York Times in a story like this. What I am saying is that if you want to paint Haggis & Moresco as victims (later, Waxman acknowledges, out of context, that both were paid these deferments in 2005), you have to answer hard questions that are not neccessarily as friendly.
Then there is this laughable comment: “You’d think that for a movie that won best picture, what you would do is write the actors a check against their profits, or you give them a car, or something,” said a representative for one of the leading actors.”
Now I know that Sharon Waxman knows that Bob Yari isn’t a major studio and I know she knows that Lionsgate is not in the business of making those kinds of gestures. These days, very few majors engage in that kind of magnanimous – since it is extra-contractual – behavior, so they expect it from Bob Yari? Well, of course the agents expect it! They're agents. Cars? Really? That wasn't a tongue-in-cheek joke?
Instead of jumping into an aggressive analysis of how the finances on a movie like this work, we get into weepy portraits of unhappy profit participants (remember, Eddie Murphy famously called backend points “monkey points”) and insinuations about the legal conflicts between Bob Yari and the other producers (funny how it is all on him now and wasn’t during Oscar week).
But the most significant fact of all is buried down in paragraph eleven. It’s confirmed by all sides and it is one of the only 100% clear financial facts in the piece. Lionsgate has only paid Yari, whose role it is pay the participants, only $10 million to date.
Do the math.
The movie cost $7.5 million. Lionsgate paid $3.3 million when they bought the film. Subtract the difference from the $10 million Lionsgate has paid Yari and there is only $5.8 million – no matter what the gross numbers – for Yari to distribute currently. That’s still a lot of money on hand, but it pales next to that “$180 million around the world.”
If you bother (or the NYT bothered) to do the math, this story gets a whole lot simpler.
Rentals on $94 million in worldwide box office are roughly $50 million. Worldwide P&A, including an Oscar push, was likely around $20 million. If Yari is getting one-third of the net, there is your $10 million from Lionsgate.
That $10 million, as I wrote before, is $5.8 million after the cost of production.
It sounds like there are about 15 profit participants. (Never mind that a major studio would eat much more than $10 million in overhead on a movie like this.) If each of the profit participants got 2% apiece, that’s 30% of Yari’s profits. Based on the revenue the NYT knows he got, that’s 30% of $5.5 million so far or $1.65 million.
According to Waxman’s story, “none of the profit participants has received more than a low six-figure sum for their work.” Well, if that’s just $100,000 apiece for fifteen people, that’s $1.5 million already paid out. And that doesn’t account for deferrals paid.
As for the DVD revenue, the $85 million in DVDs sales returns roughly another $55 million. But the actors in that situation have a SAG negotiated deal, getting about 15 cents per DVD sold or, in this case, about $750,000.
The $10 million that is apparently coming to Yari in the fall from Lionsgate’s Showtime sale will theoretically be distributed as pure profit, kicking $3 million or more to the profit participants.
But adding all that up, in spite of the $180 million in revenues, everything in those story points to profit participants getting less than $5.5 million total. Split 15 ways, that’s hardly Hollywood “fuck you” money.
Posted by poland at July 25, 2006 10:19 AM
Comments
Personally, I would hope that nobody connected with the making of this movie ever makes any money off it.
Posted by: jeffmcm ![[TypeKey Profile Page]](http://www.mcnblogs.com/thehotblog/nav-commenters.gif)
at July 25, 2006 10:52 AM
Amen, Jeff.
Posted by: Josh Massey at July 25, 2006 11:04 AM
You mean Haggis didn't make the movie for the love of it?
He should probably get a better agent or lawyer if they can't even negotiate an Oscar bonus into the contract.
Posted by: palmtree at July 25, 2006 11:23 AM
Maybe Lionsgate used the profits to fund the next 30 Saw movies.
(Joke! Joke!)
Posted by: EDouglas at July 25, 2006 11:24 AM
Yes Jeff, because people shouldn't get paid for a movie you didn't like (but plenty of other people did).
Frankly, I could care less about these stories of people fighting for money. It was a small film, they knew it when they agreed what they were going to get paid, and if the movie had made no money, they wouldn't be complaining now. But they'll make it up with plenty of opportunities to do bigger work.
Posted by: Me at July 25, 2006 11:30 AM
Actually, yes, I can't disagree with your first statement, Me.
Posted by: jeffmcm at July 25, 2006 11:45 AM
Well, Jeff, you at least have that power over your $10. Trying to have more say than that would be just plain undemocratic and uncapitalistic.
You're not a filthy commie, are you? ;>
Posted by: Me at July 25, 2006 12:04 PM
I think Commies would actually really like Haggis' movie.
Posted by: jeffmcm at July 25, 2006 12:09 PM
Are you naming names?
Posted by: Me at July 25, 2006 12:44 PM
Well, we all know how much Ebert liked it, and he also liked An Inconvenient Truth, so logically...
Posted by: jeffmcm at July 25, 2006 01:04 PM
He'll never work in this town again.
Posted by: Me at July 25, 2006 01:12 PM
By this town you mean...Chicago?
Posted by: palmtree at July 25, 2006 02:47 PM
Dave you shilling for studios again? You and I both know that when a film likle CRASH breaks out, the first thing the studio does is increase their overheads and costs on the film to the point where when the books are opened up in court, they'll look kinda clean but there'll be a rotten smell wafting from the pages.. the smell of greed. You don't know the exact deal Yari had with the team do you? So I think your speculation is just that... Should the prime participants get more? Yes they should - you defer salaries you better damn well get your dick sucked when the coin comes in... perhaps they should've pitched a CRASH franchise. Different city per film.
Posted by: Jeffrey Boam's Doctor at July 25, 2006 03:47 PM
^^^That would be lovely, watching people yelling slurs at each other in NYC, Chicago, Detroit, but at the end of each one Ludacris frees a group of slave laborers and looses them into the wild, like a Johnny Appleseed of Chinese migrants.
Posted by: jeffmcm at July 25, 2006 04:19 PM
i was thinking that fine dressed dude from Outcast but I hear ya.
Posted by: Jeffrey Boam's Doctor at July 25, 2006 04:24 PM
He unleashes them into Chinatown no less...where no illegal immigrant has ever been exploited
Posted by: palmtree at July 25, 2006 04:56 PM
I have no problem with the spirit of the deal being different, JBD. But I am speaking to the deal. And even without overhead gouging, there is no indication that my numbers are far from reality... at least according to the Waxman piece itself.
Deferments have, it seems, been paid.
And if the "profit participants" had a piece of Yari's end (which is what Waxman explicitly states), since Lionsgate didn't make the movie, but only bought distribution, and if they all agreed that all he's gotten is $10 million... what do you expect?
I'm not saying it wouldn't be lovely to have everyone be happy... but the deal is the deal. This wasn't Aladdin with Robin Williams.
Are you saying they are due more than 30%/35%/40% if Yari's profits?
It looks like Lionsgate will make a profit of about $30 million - $40 million on an ultimate investment on the movie of just over $20 million.
If Yari has a DVD deal with cast members, that could add another few million to what he is paying out... to a lot of people. But the number is not likely to be much bigger than what I am saying. Yari's end may be $20 million - $30 million. Are you suggesting that he will be paying out more than 30% of that, split between a bunch of people?
"Should" is not an issue.
Posted by: David Poland at July 25, 2006 07:57 PM
Trash, I mean, Crash needs to die!!!!!!
I hate you, you undeserved Oscar winner!
On a totally unrelated note, I love Brokeback Mountain.
Posted by: waterbucket at July 25, 2006 10:43 PM
Waterbucket!
It hasn't been the same without ya man; those BROKEBACK MOUNTAIN days are sorely missed.
Welcome back.
Posted by: Spacesheik at July 26, 2006 03:11 AM
Dave, my understanding is that there is an issue (or will be) with the ancillary deals. But yes a deal is a deal and I admit to some speculation outside the picture presented in the Waxman article. In the past there has been an understanding of going back to the table for some fiscal balancing. Of course this is not a legally required act. It sometimes is just good business if the parties want to continue a healthy relationship with those who'll pay out again down the line. And I know it seems an easy call looking in from the other side..
Posted by: Jeffrey Boam's Doctor at July 26, 2006 04:04 AM
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