A landmark case for Hollywood accounting beckons, with $911m grossing Bohemian Rhapsody reportedly still over $50m in loss.
You’re likley all familiar with the practice of ‘Hollywood accounting’ by now, we’re sure. Studios, often keen to ensure that they never have to pay out net profit participation profits, use a range of – shall we say, ‘creative’ – accounting methods to ensure that films never, on paper at least, enter into profit.
That’s why 1983’s Return Of The Jedi, despite being a global hit for well over thirty years, has allegedly never got into the black, which means the film’s producers also allegedly never had to pay the late Dave Prowse (Darth Vader) among others, their net profit participation points.
Usually this practice goes on unchallenged, publicly at least.
However, the clandestine veil of secrecy behind ‘Hollywood accounting’ is set to be thrown back for all to see, with the news that Bohemian Rhapsody screenwriter Anthony McCarten, is suing the film’s producers, GK Films, for money owed. The film, which cost $55m to make, earned $911m at the global box office, but according to 20th Century Fox accounts, is still somehow $51m in the red.
McCarten is suing GK Films rather than Fox (now owned by Disney) because he claims that his backend deal was directly with the production company, rather than the studio.
Eddie Murphy once called net profit points “monkey points” during a similar case against Paramount over Coming To America remaining in the red despite making $350 million. But McCarten believed he had firmly managed to negotiate a deal with GK Films that circumvented any of the accounting tomfoolery that tends to make net points deals worthless.
Whether McCarten is right remans to be seen, but if he is, the nature of his contract will be one that other creators will surely look to emulate in the future. We’ll keep you posted on this one as we hear more.
The case continues. Hopefully we used the word ‘allegedly’ enough.
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