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LucasFilm Tells Darth Vader that Return of the Jedi Hasn’t Made a Profit

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Re: LucasFilm Tells Darth Vader that Return of the Jedi Hasn’t Made a Profit

#21

Post by mmaunder »

Less than 5% of movies actually show a net income (or net profit as the article calls it). It's called Hollywood Accounting:

http://en.wikipedia.org/wiki/Hollywood_accounting

Summary:

-Studios create a subsidiary corporation for each movie and they almost never show a profit.

-The studios charge the subsidiary service fees for services performed like distribution, which lowers net income to zero or less.

-They do this to avoid taxation and paying royalties to actors.

Quote from wikipedia: "Because of this, net points are sometimes referred to as "monkey points," a term attributed to Eddie Murphy, who is said to have also stated that only a fool would accept net points in his or her contract."

There are many more cases like this involving high profile people including Peter Jackson:

http://en.wikipedia.org/wiki/Hollywood_accounting#Examples

Re: LucasFilm Tells Darth Vader that Return of the Jedi Hasn’t Made a Profit

#22

Post by kprobst »

I seem to remember Alec Guinness hit the jackpot on the SW franchise by demanding a % of the profit (gross?), so I assume this guy had a different contract. I suppose Guinness had a lot more pull and negotiating leverage than a dude whose primary contribution to the films was to be tall.

Re: LucasFilm Tells Darth Vader that Return of the Jedi Hasn’t Made a Profit

#23

Post by phxrsng »

Bud wrote: post #16

Geez, Lucas. Have you no sense of decency, sir, at long last? Have you left no sense of decency? I mean, really. I can see being a greedy fuck for a couple decades, while you're still unsure if you are, in fact, going to become and remain wealthy beyond the dreams of avarice. But once you have the fuck-you money put away for you, your entire family and everyone you've ever met who was halfway interesting, can't you t…

Yes because he clearly knew they would be such a success at the time he was negotiating contracts. He made the standard contracts, which is what you have to do, because you can't just change the terms later based on how successful something is or isn't.

This isn't a case of Lucas being exceptionally greedy. Maybe its a case proving how 1-sided Hollywood contracts are, though.

Re: LucasFilm Tells Darth Vader that Return of the Jedi Hasn’t Made a Profit

#25

Post by kanamekun »

phxrsng wrote: post #23
Bud wrote: post #16

Geez, Lucas. Have you no sense of decency, sir, at long last? Have you left no sense of decency? I mean, really. I can see being a greedy fuck for a couple decades, while you're still unsure if you are, in fact, going to become and remain wealthy beyond the dreams of avarice. But once you have the fuck-you money put away for you, your entire family and everyone you've ever met who was halfway interesting, can't you t…

Yes because he clearly knew they would be such a success at the time he was negotiating contracts. He made the standard contracts, which is what you have to do, because you can't just change the terms later based on how successful something is or isn't. This isn't a case of Lucas being exceptionally greedy. Maybe its a case proving how 1-sided Hollywood contracts are, though.

While I agree with you, the article is about Return of the Jedi which was released in 1983 - six years after the first Star Wars movie came out.

So by the time these contracts were being negotiated with David Prowse, the producers of the project knew that the movie was likely to be highly successful.

Re: LucasFilm Tells Darth Vader that Return of the Jedi Hasn’t Made a Profit

#26

Post by Joakal »

Bud wrote: post #16

Geez, Lucas. Have you no sense of decency, sir, at long last? Have you left no sense of decency? I mean, really. I can see being a greedy fuck for a couple decades, while you're still unsure if you are, in fact, going to become and remain wealthy beyond the dreams of avarice. But once you have the fuck-you money put away for you, your entire family and everyone you've ever met who was halfway interesting, can't you t…

"... I accuse the corporations, who oppose the moral rights of the artist, of being dishonest and insensitive to American cultural heritage and of being interested only in their quarterly bottom line, and not in the long-term interest of the Nation. ..."

There's more, including calling any such distortion of [his movie?] art as barbaric.

http://savestarwars.com/lucasspeechagainstspecialedition.htm...

Re: LucasFilm Tells Darth Vader that Return of the Jedi Hasn’t Made a Profit

#27

Post by anamax »

patio11 wrote: post #4

Why isn't there an enterprising law firm going through the credits of all the Star Wars (and similar-vintage films with ongoing commercial potential), contacting every person on the list, and telling all the retired ones "There is a pot o' money with your name on it if you sign these papers which let us sue them for residuals on your behalf."? I have to imagine that the legal strategy required there is a for loop wit…

> Why isn't there an enterprising law firm going through the credits of all the Star Wars (and similar-vintage films with ongoing commercial potential), contacting every person on the list, and telling all the retired ones "There is a pot o' money with your name on it if you sign these papers which let us sue them for residuals on your behalf."?

Because they'd lose.

Re: LucasFilm Tells Darth Vader that Return of the Jedi Hasn’t Made a Profit

#28

Post by jackvalentine »

veyron wrote: post #9

I remember reading something similar in the music industry, written by courtney love. Anyone have a link?

Not the link you're after, someone has already provided that but I found "Why I started Magnatune" really interesting. http://magnatune.com/info/why

Re: LucasFilm Tells Darth Vader that Return of the Jedi Hasn’t Made a Profit

#29

Post by ZachPruckowski »

patio11 wrote: post #4

Why isn't there an enterprising law firm going through the credits of all the Star Wars (and similar-vintage films with ongoing commercial potential), contacting every person on the list, and telling all the retired ones "There is a pot o' money with your name on it if you sign these papers which let us sue them for residuals on your behalf."? I have to imagine that the legal strategy required there is a for loop wit…

Look at how hard it is to get traction on investigations into the current foreclosure/securitization boondoggle - it's taken 3 years for judges to actually start looking, the federal regulators are completely uninterested, and maybe 4 state AGs out of 50 have even started looking. And these are obvious and clearcut violations of pretty straightforward laws. Their reputations and legal teams have been a buffer against all sorts of suits and investigations.

A Hollywood investigation would be worse politics, since you've have every TV station screaming about the government intrusion in investigating their parent companies. Look at things like the just failed Attorney General settlement with the banks - the worst case here is the company makes a one-time payment of a few pennies on every dollar of profit to some fund nominally targeted towards the victims. Then you throw in all the indemnification offered by corporate structuring and the fact that there probably aren't technical violations of the law here and good luck selling some accounting irregularities as a prosecution.

Maybe in a few years that stuff will change, but right now the environment is such that nobody really buys the idea of government actually smacking someone with TR's Big Stick.

Re: LucasFilm Tells Darth Vader that Return of the Jedi Hasn’t Made a Profit

#30

Post by mattm »

mmaunder wrote: post #21

Less than 5% of movies actually show a net income (or net profit as the article calls it). It's called Hollywood Accounting: http://en.wikipedia.org/wiki/Hollywood_accounting Summary: -Studios create a subsidiary corporation for each movie and they almost never show a profit. -The studios charge the subsidiary service fees for services performed like distribution, which lowers net income to zero or less. -They do thi…

The link from the Wikipedia page to a leaked receipt from Harry Potter shows an example of this.

http://www.techdirt.com/articles/20100708/02510310122.shtml

Geez, a $57 million dollar loss in interest. How is that even possible?

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