Movie accounting is famously fickle and shady. When your agent or lawyer negotiates for the back end of a movie, there's little chance you'll ever see it even if that movie is a massive hit. The reason is that accounts use lots of convenient math to make it look like their films are not a hit.
This allows studios to avoid paying residuals and take tax write-offs for depreciating assets.
It's wild.
Recently, writer Ed Solomon took to Twitter to talk about how in the 22 years and four franchise films since the original Men in Black, Sony still claims that film is in the red.
This is a crazy statement, but it indicates the guarded truth about working on big-budget movies.
It's not just Men in Black; other filmmakers chimed in with similar stories.
Think $150mm is a huge number? Try almost $900mm and still not back end.
And before you go blaming the guild, it's really agents and lawyers who have to keep track of these numbers and keep studios honest.
While it's hard to know the story behind Men in Black without seeing the numbers, a few years ago, this accounting sheet from Harry Potter and the Order of the Phoenix leaked and showed how the studio said that massive movie made no money.
Solomon says the sheet cites distribution fees, distribution expenses, direct cost, pre-break participations and deferments, a supervisory fee, interest, over-budget charges, and other odds and ends to keep the movie in the red.
If you think movies are bad, TV is the same. Check out how Army Wives received similar treatment.
The hardest thing about this kind of accounting is that you cannot argue with numbers. Studios spend and continue to spend tons of money on these kinds of projects. The interest charged and inflation goes a long way in creating these deep holes movies have to dig out of, but it is discouraging to see hits buried buy this kind of fiscal work.
As streamers rely more and more on clicks instead of box office, residuals will have to change.
The accounting will always matter, but more and more people are negotiating in different ways to get paid.
It will be interesting to see how this changes over time.
And if Men in Black ever makes money.
What's next? Check out our ultimate film budgeting guide!
There are so many elements to consider when calculating your film's production budget. This comprehensive guide and free film budget template will get you started.
