It boggles the mind doesn't it? Movies like the first Lord of the Rings trilogy and the Harry Potter movies which grossed over a billion dollars worldwide, managed to actually lose money?
Something called "Hollywood Accounting" is in play, to avoid paying more royalties on the "net profit" they'll inflate the overhead costs in the financial reporting. If you were someone who was set to gain from the net profits, you would be annoyed wouldn't you?
That happened to Stan Lee, the man who invented Spider Man was set to earn 10% of all net profits from future properties involving Spider Man. When the first film grossed $800 million worldwide, he didn't get anything as producers claimed there was nothing left.
If you're someone like Tom Cruise or Tom Hanks, you'll negotiate for shares of the gross profit and you'll probably get an extra vanity credit like Producer or Executive Producer. In Forrest Gump, another blockbuster that earned huge money but lost money, part of it was paying Tom Hanks over $60 million dollars as first revenues would go to him before net.
The most ridiculous on the list is My Big Fat Greek Wedding, which only cost $6 million to make, earned $350 million but lost $20 million! (Another Tom Hanks produced project).
Don't think you can negotiate a gross profit contract though, only the big guns can get that as they have a proven track record of generating billions in revenue over their careers.
So here is a list of the madness called a Hollywood "hit". Hit as in you take a hit in the wallet....
Hurry Up and Wait Link: http://goo.gl/8YSz7K