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.