So far in 2015, four films have earned well over $1 billion dollars at the box office and numerous box office records have been broken. Last year, there was ‘only’ one film that broke $1 billion, but numerous other films earned just shy of the billion mark. In fact, every year since 2008 has yielded at least one film that has broken the $1 billion barrier. With this much money being spent by the watching public, Hollywood studios should be swimming in more money than Scrooge McDuck.
Or so you thought.
Big Hollywood blockbuster films will in fact lose money most of the time. This is usually made possible by a number of tricks, such as mysterious ‘net profit formulas’ in which a film’s budget and earnings are tinkered in such a way that it is impossible to earn a profit. Another popular trick is to spend excessive amounts of money on ‘marketing, promotion, and distribution,’ which essentially means studios pay money to themselves and write it down as an expenditure. Due to this ‘Hollywood Accounting,’ films that have cleaned out the wallets of the viewing public have somehow managed to still not make any profit.
Here are 10 films which have earned more than what you could spend in five lifetimes and yet have still not managed (on paper) to get out of the red.
10. Fahrenheit 9/11
Like him or not, a Michael Moore documentary is usually bound to get a decent viewing audience. When he released Fahrenheit 9/11 in 2004, it got a massive amount of attention and quickly became the highest grossing documentary film ever.
And yet, despite making over $200 million worldwide on a measly budget of around $5 million, the film somehow managed to make little to no profit.
Despite a 50/50 split deal with the Weinstein brothers, who distributed the film through their studio, Moore had to sue them to get some of his unpaid royalties. As it turns out, some shady Hollywood accounting meant that all the money was somehow siphoned away in a paper trail of tax breaks, advertising costs, fees, ‘work’ expenses, and presumably Moore’s extensive collection of baseball caps.
The Caped Crusader’s first foray into the film world was met with some hesitancy over whether audiences can suspend their belief for a story about a vigilante who dresses up in a bat suit. Thankfully, Tim Burton managed to knock it out of the park and Batman proved to be a massive success with over $400 million earned at the box office.
But with a massive expenses list that included $62 million for advertising and publicity, $9 million just for film printing costs, and a whopping $80 million for distribution, Batman wound up losing money for the studio.
Despite theoretically losing money whenever Batman has hit the big-screen, the studio was happy enough to continue green-lighting sequel after sequel. Ben Affleck, you have big shoes to fill.
8. Harry Potter And The Half-Blood Prince
With an average box office gross of nearly $1 billion per film and a final earnings tally totaling nearly $8 billion, the Harry Potter film franchise is the second most lucrative film franchise ever and is essentially a money-printing machine.
But according to the studio, all that money may just be like the magic they show on screen: imaginary.
According to a costs and expenses report for the Harry Potter And The Half-Blood Prince, the film was budgeted at about $250 million. During its run, the film made nearly $1 billion at the box office and yet, it still managed to turn in a $167-million loss.
The films may boast some visually stunning magical sequences, but the ability to somehow turn $700 million or so in net earnings into such a massive loss is the film’s best magic trick of all.
7. Forrest Gump
Based on Winston Groom’s novel, Robert Zemeckis‘ adaptation of Forrest Gump emulated the titular character and managed to fail its way to success. Produced on a budget of $55 million, the film managed to pull in over $650 million, a host of Academy Awards, and a place in pop culture history.
And yet, the film still somehow managed to lose all that money. The studio behind the film, Paramount, claimed that the film posted a loss of $62 million owing to Tom Hanks‘ and Zemeckis’ enormous salaries, production costs, marketing, and distribution costs.
Despite being owed 3 per cent of the film’s net profits, Groom has seen none of that money. But unlike most other novelists who were swindled out of royalties from adaptations of their work, Groom was reportedly happy with Paramount’s explanation of their accounting. The seven-figure sum Groom was paid for the rights to Forrest Gump’s sequel probably also had something to do with it.
Based on books by Jim Marrs and Jim Garrison, and a healthy dose of conspiratorial ‘what ifs?’, Oliver Stone’s 1991 film JFK was his attempt at shedding new light on the already heavily-scrutinized Kennedy assassination. Despite taking some liberties with the whole case, the $200 million or so earned worldwide proved that audiences aren’t too picky over the details.
The studios weren’t too keen on sharing the wealth and claimed that the $40 million dollar movie somehow managed to lose $60 million during its run.
Unfortunately, being part of the actual investigation and writing the book that inspired the movie didn’t automatically guarantee Garrison a payday. In the lawsuit that followed, Garrison’s estate claimed that it didn’t see a dime of the film’s earnings. Warner Bros counter-argued that the film had yet to make a profit through the use of a ‘net profits’ formula, which basically means “we’re keeping all the money.” The lawsuit ended on a bit of a whimper as the Garrison estate settled for a smaller amount than what they were entitled to.
Garrison died in 1992, a year after the movie was released. Coincidence? You decide.
5. Coming To America
Coming to America had quite the buzz going for it, on screen and off screen. Produced for just $39 million, it made nearly $300 million worldwide. Behind the scenes however, lawyers were having it out over who stole the film’s idea from whom.
The judge ruled against the film’s producers and studio by stating that they had, in fact, stole the idea from writer Art Buchwald, and now had to pay him in royalties. But because the studio claimed that they spent so much on “development,” the film had actually made no money.
Having the judge rule against them and fearing that the negative buzz may give rise to other people who’ve been screwed by the ‘net profit’ formula, the film studio eventually settled with Buchwald. By “settled,” we mean they paid Buchwald just under $1 million in hush-hush money to never bother them again.
With over $200 million earned at the box office against a budget of $33 million, adoration from critics and audiences, and its status as a quintessential film during the Christmas period, Elf is not only a critical and commercial hit, but it was also the first mega hit for Will Ferrell and director Jon Favreau.
But according to Favreau himself, he’s still waiting for that big fat director’s royalty cheque. After raking in hundreds of millions at the box office and even more through endless repeats over the past twelve Christmas’, Elf has yet to slip into the green.
But based on how Ferrell’s and Favreau’s careers have turned out since then, there’s no need to feel too sorry for them.
3. My Big Fat Greek Wedding
My Big Fat Greek Wedding was like the little indie movie that could. It was produced on a mere $5-million budget; it was written by an unknown; and there were no established stars featured. As it so happens, it became a massive sleeper hit. Despite never hitting the number one spot at the box office, the film earned $370 million worldwide, gained an Academy award nomination, and is the highest grossing rom-com of all time.
But if you’ve learned anything during this list, it’s that Hollywood can make any film somehow lose money.
When everything was tallied up for the film, a reported $20-million loss was recorded. You are not reading that wrong. A $5 million film that earned $370 million somehow managed to report a loss that’s four times its budget. Hollywood accounting at its best.
2. Star Wars: Return Of The Jedi
Thanks to the massive success of Star Wars, Disney had enough faith to splash out $4 billion for the entire Star Wars franchise and risked alienation from fans by green-lighting a new trilogy of films.
If the earnings of Return Of The Jedi is anything to go by, it looks like Disney may have misplaced their faith.
Budgeted at around $40 million, Return Of The Jedi grossed over $570 million worldwide, including all those unnecessary re-releases. Well it looks like they may need to re-release the film again as David Prowse (Darth Vader’s body) has yet to receive a royalty cheque because the film has yet to turn in a profit.
So whether the upcoming Star Wars film makes $10 or $3 billion, you can be assured that there will be accountants working overtime to ensure it loses money.
1. The Lord Of The Rings Trilogy
Three films totalling 558 minutes (not including the extended editions), eight years of production time, $300 million or so budgeted for the entire project, and nearly $3 billion in worldwide box-office earnings. The result? The Lord of the Rings trilogy, an epic fantasy that redefined blockbusters and proved that elves, dwarves, dragons, and goblins can be appealing to nerd and non-nerds everywhere.
But what you need to know is that the studio behind these films was also behind Fahrenheit 9/11. Based on what happened with that film, you can pretty much guess what happened to all the money earned from these three films.
An investor put up 10 percent of the budget with the expectation of huge profits. But despite the film trilogy being one of the biggest box office successes ever, the investor was told that the film had suffered horrendous losses and didn’t receive a cent. In fact, the studio was so tight-fisted over every dime that even Peter Jackson sued them for lost profit on the films.
They obviously smoothed things over so that Jackson could make The Hobbit trilogy, which also coincidentally made about $3 billion. Presumably, that trilogy also suffered horrendous losses and we should expect Jackson to sue them again very soon.