Who makes the money when a movie goes big?

February 1, 2010 10:29 AM

So Avatar has passed the two-billion-dollar mark. Who gets all of that money? The distributing studio? The producers? The movie theaters? And what the heck is the difference between an "executive producer" and a "producer"? Some films seem to have half a dozen of each.
posted by jackypaper to media & arts (13 answers total)

It's not the movie theaters. Only about 1% of the ticket cost actually goes into a theater's coffers.* They make their money from popcorn.


*The source of this figure was a chart in one of those movie industry magazines, ScreenShots, I believe.
posted by mmmbacon at 10:35 AM on February 1, 2010

IIRC, in my film elective I learned that how it works is the producer finds investors to pay for the film, and then they get back money proportionate to what they paid in. People involved in the film, like actors, can invest their own money as well, or work out an agreement to trade part or all of their salaries in exchange for part of the film's revenue. There are also residuals, which give a person working on the film money for each unit sold, which were at the heart of the last writer's strike. All of these things are issues worked out via the contracts.

The Mel Brocks comedy "The Producers" sums it up fairly well, although I'm guessing you want a more nuanced description.
posted by mccarty.tim at 10:38 AM on February 1, 2010

Executive Producer vs. Producer
posted by blue_beetle at 10:39 AM on February 1, 2010

It depends on the various contracts involved. For example, sometimes people (directors and sometimes actors, I think) will accept a lower salary in return for a percentage, or higher percentage, of the gross profit.
posted by sallybrown at 10:52 AM on February 1, 2010

Movie theaters take more of the ticket price the longer they show a film. During opening weekend they're keeping no more than 20-25%, for a big release like Avatar it was probably much less. They get into the 50% range by the second and third week and then into the 80% range after that. Most films have very few people attending by the 4th week, but a movie like Avatar that keeps packing them in will make good money for movie theaters.
posted by IanMorr at 11:01 AM on February 1, 2010

Everybody gets money: theaters, publishers, writers, actors, blah, blah, blah.

Yeah, but some people don't get any more money from a success than a failure.

On Avatar, I'm sure Cameron gets a percentage of the gross. It may only kick in at a certain point, once all the production costs are covered, but that point has surely been reached. Sigourney Weaver might have gross points too but that kind of thing is not especially public info (only when people sue over it.) The rest of the cast being less famous would probably just get a straight salary at whatever their going rate is. For instance, Sam Worthington was basically a nobody when he was hired for this, which was likely before he was cast in Terminator. Don't worry though, he'll make his money on the next role.

(BTW, you might think it would make more sense to get a percentage of the profit, but movie studios are infamous for making sure no movie makes a profit. Gross income is much harder to screw with.)

The Big Picture by Edward Jay Epstein is supposed to be a good book on the subject.
posted by smackfu at 11:02 AM on February 1, 2010 [2 favorites]

The complexities of accounting in the movie industry are legion.

From what I've been told by a guy who has tried to get into the film financing game:

(1) Each movie is structured differently
(2) Star vehicles (think a Will Smith movie) generally give a percentage of the gross to the star(s), but not always, in lieu of a big up front payment.
(3) Star directors (think Cameron, Spielberg, etc.) may get a percentage of the gross, but not always.
(4) The various producers on a film provide the capital (money) with which to make the movie, albeit at different levels of participation. They are typically made whole and possibly earn a return on their investment once all the operating and ancillary costs have been paid: wages, taxes, set designs, technical work, and all the other expenses that I'm not thinking of. Presumably this is the riskiest portion; this is why (some) producers earn outsized returns, and it is also why, in part, many actors create their own film production companies.
posted by dfriedman at 11:06 AM on February 1, 2010

Producer can mean a lot of different things, medium dependent, project dependent. A producer for a television show might be one of the writers, for example, who also helps bring the show to fruition. A producer is occasionally heavily involved, creatively or financially, with casting, shooting locations, etc. Other times, they're just responsible for the business end, period. A producer in a movie might be the whole driving force, from start to finish, for getting the movie made (guy reads a good book, wants to adapt it into a film). Othertimes, the producer is almost ceremonial, a name attached just to get attention, who does next to nothing on the project.

Executive Producer is even more nebulous a title. Maybe one of the original creators to a property signed a shitty deal and gets stripped of any credits, sans "Executive Producer." Maybe an independently wealthy scion waltzes into an indie film, pays for their most expensive scene, and in return gets to wear a fedora and call himself an EP. Maybe an A-List star has a pet project, but she can't write or direct or produce, so she acts as a producer's producer in a way, and picks the guy who picks the guy who gets the film made (as long as she can star in it).

In general -- very general -- the producer is the dude or chick responsible for making sure the movie actually gets made, and an executive producer is a person who helps the producer get the leverage/resources needed. Some of the great writers and directors act as their own producers, some people produce and nothing but. There are brilliant, creative producers, and there are sub-human slime monster producers. The only constant? Both producers and EPs usually end up getting paid pretty damn well.
posted by Damn That Television at 11:08 AM on February 1, 2010 [1 favorite]

The Big Picture by Edward Jay Epstein is indeed an excellent book on the subject. It's surprisingly dry, but very clear and detailed.
posted by Clambone at 11:56 AM on February 1, 2010

Hollywood accounting is rife with examples of studios fucking with the numbers so as to have to pay out less to revenue-sharing partners.

"Monkey points" (supposedly coined by Eddie Murhpy) are a % of the net profit. Only a monkey would accept net points in their deal, because everyone knows the studio will do it's best to make sure the movie shows a loss on paper, therefore nothing to be shared. This is purportedly what happened to My Big Fat Greek Wedding, a massively popular indie movie that, when it came time to send out profit statements, OOPS... movie lost money. Nothing to share.

People with juice in the production will go for % of gross profits (as mentioned above).

Peter Jackson, 15 actors, and The Tolkien Estate all sued New Line Cinema over shady accounting practices regarding the LotR movies and the dragon-hoard of cash the films raked in.

Stalin once said something to the effect of The voters determine nothing. Those who count the votes determine everything. Seems like much the same could be said of those who count the money in Hollywood.
posted by Pirate-Bartender-Zombie-Monkey at 12:23 PM on February 1, 2010 [3 favorites]

Nthing everyone else (film studies major, pro review for 4 or so years): With a film like this, the studio will be taking the vast amount of that money - mainly because it was mostly their money that paid for it and because of the accounts-dicking mentioned above.

In an age of little vertical integration where distribution channels take as much or more than producers, film still clings to a model from an older era, and studios still make most of the money themselves. This is why they can afford to spend hundreds of millions of dollars on a film - because w/w distribution means they can make it back. So when figures say "X movie took X dollars at box office this weekend" - about 80% is going straight back to studio (and from studio to actors w/ gross, etc. etc. Fyi, if you're an actor in this type of movie, gross isn't where the money is, it's merchandising. Jack Nicholson for example made the vast majority of his fortune by trading some of his gross from Batman to merchandising gross. Incredibly shrewd move).

Let the record reflect, this works for blockbusters. Indie (or indie-ish) films, where studios are more often just distributors, is infinitely more byzantine.
posted by smoke at 2:51 PM on February 1, 2010

Producers include, but are not limited to:

money wranglers, crew assemblers, middlemen/women between movie and studio, people on set who monitor the physical production, personal financiers, studio heads (who gave the green light), friends of the director, people who negotiate adaptations from page to screen, people who arrange for travel/meal, people in charge of budget....

Anything that helps "produce" the movie, really, but aren't physically involved in gear, performance, or any other movie-type role (editor, director, grip, vocal coach, catering...etc.)

Some of the above areas have underlings like Production Assistants, Accountants, etc, but a producer would still be responsible for dealing with the PA's or accountants or ...

Nobody really knows what a producer does, but they are quite essential in the top-down studio system of movie making
posted by Khazk at 3:03 PM on February 1, 2010

I was listening to the CBC lately, which claimed that theatres are no longer given a higher percentage of the ticket sales as the movie is there longer. I have absolutely no idea what show I was listening to, but it was an interview with someone starting a super premium movie theatre (or theatre chain), with ushers and alcohol.
posted by jeather at 3:30 PM on February 1, 2010