10 Movies That Made Hundreds of Millions in Box-Office Dollars And Yet Somehow Showed No Profit

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10 Movies That Made Hundreds of Millions in Box-Office Dollars And Yet Somehow Showed No Profit

By Dustin Rowles | Box Office Round-Ups | August 19, 2013 | Comments ()

Darth Vader Return of the Jedi.jpg

You may think that Hollywood movie making in the studio system is a hugely profitable enterprise, but not if you talked to Hollywood accountants. Sure, studios love to trumpet their huge box-office numbers, but when it comes to directors, actors, and writers collecting their back-end profits, studios suddenly change their tune. The Lord of the Rings trilogy made nearly $3 billion at the box office, for instance. Oh, sure, that’s what it looks like to the outside observer, but to a Hollywood accountant, the trilogy actually lost money.

“Hollywood accounting” is a neat trick the studios use to avoid paying back-end profits to those contractually obligated to them. It works something like this: Say, a Warners Brother movie makes $300 million at the box office, but it costs $100 million to make. That’s $200 million profit, right? Well, not so fast! Don’t forget about the $75 million is distribution costs (who gets paid that $75 million? Oh, Warner Brothers!), another $75 million in advertising costs (most of which is paid to Warners Brothers), and $50 million in interest (again, Warner Brothers paying itself to finance the film), and suddenly, that $200 million net revenue equals zero profit (and yet, Warner Brothers made $200 million, essentially by paying itself to ensure it lost a profit).

It’s a shady business, this Hollywood accounting (and fortunately, courts have been turning against it when lawsuits are brought). Still, here are 10 films that you would think showed a huge profit, but according to the Hollywood accountants, they all either lost millions of dollars, or never made a profit (meaning those owed back-end profits didn’t receive a dime).

1. My Big Fat Greek Wedding cost $6 million to make and made over $350 million at the box office, and yet lost $20 million.

2. The Lord of the Rings trilogy made over $2.9 billion in box office, and yet showed “horrendous losses.”

3. Return of the Jedi made $475 million on a $32 million budget, yet has never shown a profit.

4. Harry Potter and the Order of the Phoenix made $939 million worldwide, and yet ended up with a $167 million loss.

5. Forrest Gump earned $667 million, yet shows a loss of $31 million.

6. JFK earned $150 million worldwide but showed $0 in profit.

7. Coming to America made $288 million in revenue, yet showed no profit.

8. Michael Moore’s Fahrenheit 9/11 made $220 million worldwide, and yet apparently showed no profit.

9. The Exorcism of Emily Rose made $150 million on a $19 million budget and turned no profit.

10. Batman, which made $411 million worldwide, showed a $36 million deficit.

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Comments Are Welcome, Bigots and Trolls Are Not

  • eyeswideopen

    This article has made me physically ill......We REALLY need to GET the Jews out of OUR country. They boast how THEY control Hollywood/Media and OUR Government. Look it up for yourself, the internet can show you the truth. Also look up William Pierce, he spoke the TRUTH.

  • okayflint

    you read the first few words of this comment and begin to nod in agreement and then WAMMO dude goes full wacko. quite the rollercoaster ride

  • DeusExMachine

    And the suits keep crying about how piracy is ruining them. Lying pieces of shit.

  • GDI

    It's called Prints and Advertising. Theaters have to rake in money somehow. Do you really think that they sponsor movies free of charge? Now, yes the distribution section does seem highly exorbitant and a bullshit charge. Interest and advertising does seem to add up however.

  • Misomaniac

    Old joke in Accounting circles-doesn't make it less true...

    There once was a business owner who was interviewing people for a division manager position. He decided to select the individual that could best answer the question "how much is 2+2?"

    The engineer pulled out his slide rule and shuffled it back and forth, and finally announced, "It lies between 3.98 and 4.02".
    The mathematician said, "In two hours I can demonstrate it equals 4 with the following short proof."
    The physicist declared, "It's in the magnitude of 1x101."
    The logician paused for a long while and then said, "This problem is solvable."
    The social worker said, "I don't know the answer, but I a glad that we discussed this important question.
    The attorney stated, "In the case of Svenson vs. the State, 2+2 was declared to be 4."
    The trader asked, "Are you buying or selling?"

    The accountant looked at the business owner, then got out of his chair, went to see if anyone was listening at the door and pulled the drapes. Then he returned to the business owner, leaned across the desk and said in a low voice, "What would you like it to be?"

  • Dragonchild

    As someone married to an accountant, I can say that you're not actually referring to an accountant. The punchline is about a marketer who's taken over the accounting department, though that really doesn't change the moral hazard part of the equation.

  • Slash

    Looks like the IRS needs to take a look at this shit. Sounds like tax fraud to me.

  • Ian Fay

    It's important to remember that 90% of the reason they do this is to fuck over people whose deals specify they get a taste of the profits

    In other words just because they're assholes.

  • Stephen Nein

    By this logic, that means Battlefield Earth is one of the most successful franchises in history.

    Think about it . . .

  • Houston

    While this practice obviously sucks, why would anyone continue to sign contracts where back-end profits were a sizable portion of the payment? If the answer is that movie studios are like mafia families, then it makes sense.

  • JJ

    It's all about signing a contract paying on gross versus net. Through the separate entity shell game, it's amazing how net profits disappear, and yet studios are so unwilling to negotiate in terms of gross revenue unless it's for the big names/stars.

  • Arran

    I wonder if a single person has ever seen a dime from net points.

  • Foop

    talk to robert downey jr or roland emerich.

  • Ryan Ambrose

    So, we are not getting a possible Pacific Rim sequel despite how well it performed in foreign markets?

  • carrie

    because you want a PACIFIC RIM sequel???? why? it's Transformers VS Godzilla (without humor)

  • Fabius_Maximus

    There was humor in Transformers 1-3? What movies were you watching?

  • Real_Irwin

    There was no humor in Pacific Rim? What movie were you watching?

  • BlackRabbit

    Not that either of them were any good anyway....

  • Arran

    Even ignoring Hollywood Accounting, that's not exactly a sure thing—sure, it's done very well in China, but it's not like the studio gets all of that money.

  • Genevieve Burgess

    I had heard that the "Lord of the Rings" one was specifically used to avoid paying Tolkien's family their share of the "profits" that the film never made. Except the Tolkien family hadn't signed over the rights to "The Hobbit" yet. So, magically, some profits were found to hand over to them despite the catastrophic financial loss the studio was dealing with.

  • Bananaranma

    Another neat trick is that they specify back end profits for the production company not the movie. The movie itself is set up as a shell company then the production company slaps every fee conceivable onto the shell. So sorry, the movie didn't make a profit.

  • This is criminal activity. Honestly.

  • Dragonchild

    It's unethical, but it's not criminal until it's against the law.

    The problem is that America's really big on "deregulation". Keep in mind that "deregulation" means NOTHING IS ILLEGAL. Imagine how popular an idea would be if we "deregulated" child labor. But for some reason it's all the rage when it comes to economic policy.

  • Gunnut2600

    If you ever wondered why Uwe Bolle films exist, its because of a Germany tax law created to support German cinema. Basically if you invest in a film in Germany, and it lost money, you could write the losses off on taxes.

    Naturally organized crime flocked to the loop hole as it provided a way to wash cash. The bigger the losses, the more cash you could "explain" on taxes. This is why Uwe could land decent actors to appear in shockingly terrible films.

    It was so blatant that Germany has since changed the law.

  • e jerry powell

    Don't leave that child labor part to Neil Cavuto...

  • kirivinokur

    I'm in the middle of reading 'Down and Dirty Pictures', and this type of accounting (alongside the Weinsteins bullying) seems to be the key to Miramax's financial success.

  • $65530708

    So Titanic and Avatar lost money??? I know neither is listed but knowing they ended up in the RED makes me endlessly happy.

    *I can see how the Emmy's get it wrong every year if they use the same math for nominations.

  • LucyKlein

    Avatar had lots of people going to movies -and imax- to see it. Practically everyone I know saw in theaters. I don't know anyone who watched it sense or bought a dvd.

  • Gabriel

    Well, Avatar made 2,7 Billions out of 600mi, and they are making 3 sequels, so I think that they pretty much ended in green.

  • $65530708

    3 sequels? There are 4 movies I'll never see.

  • okayflint


  • Guest


  • merryxmas

    Next time you're having a moral dilemma while cruising thepiratebay remember this and grin.

  • gr689

    That the movie industry tries to make it look like the hundreds of millions of dollars they make off of one movie is not profit at all??? Its all done for tax purposes......and 200 million is not enough profit for them......sure they didn't make any money....that's why there are so many sequels...because they lost money right??? If they lost money on the movie they aren't going to make another one!!

    Return of the Jedi made more money than the other two combined....
    Look for a movie called GULLABLE TRAVELS on Pirate Bay and sulk....i guess there always has to be someone that's going to believe multi-billion dollar corporations....

  • Alberto Cox Délano

    It depends on which kind of movie. If I download, say, something by Michael Bay, there is no way I'm feeling guilt for that. But if I download something like the underrated gem "The Secret of Kells" or Breaking Bad episodes, I feel contractually obliged to purchase them later, whenever I have more cash available.

  • Long_Pig_Tailor

    I'll argue for the general permissability of downloading non-premium television, actually. Even if you are not explicitly planning to purchase the show on DVD or watch it live, by networks providing you the freedom to watch the show as it's airing, you are ultimately more likely to buy DVDs or watch live (that is, with ads) than if they were draconian cockhammers who policed TV the same way the MPAA polices movies. It's a less ideal circumstance for them (they inevitably lose out on all advertising not in the show), but they are maintaining a potential customer down the line and also sustaining a fan who might turn people who won't go after the show illegally into viewers. Television's a numbers game where, generally, simply the more viewers, the better, virtually however you can obtain them.

    Premium television, of course, is different. We're ultimately being fairly fucking douche-y to HBO by downloading Game of Thrones.

  • Sean

    The Secret of Kells was online months before it came out in theaters. I wished I had waited to watch. I bet that was great on a big screen.

  • Sara_Tonin00

    Ick. Normally I'm against piracy, but there does seem to be a rightness here - if none of the money is actually making its way to the creative artists involved, or even the original producers who took financial risks - it's hard to feel guilty about stealing from corporations with crooked accounting.

  • e jerry powell

    True enough, but at the same time, the actors who take a (slightly) lower salary in exchange for back-end points on net kind of deserve what they get if they get ripped off by non-existent net profits. Gross points after payout is a different matter.

  • GDI

    Which is why crowdfunded music is very possibly the future (for bands with a devoted fanbase).
    It would be nice if there was movie counterpart to this that didn't involve Spike Lee.

  • e jerry powell

    Or Zach Braff.

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