Think your accountant gets creative at tax time? Consider the accountants who keep the books for the Hollywood studios. By their reckoning, almost every movie ever made is a flop. Even top-grossing movies are purportedly in the red, thanks to studios charging themselves overhead and other accounting tricks that help keep the producers from having to cough up percentages to tax collectors or to net profit participants (that is, actors, writers, and directors who are contractually owed a percentage of net profits). Kids, when you sign those Hollywood studio contracts, ask for gross points, not net.
It’s notoriously difficult to tell which bloated Hollywood disasters actually did lose money. First off, the studios collect only about half of the box office take (the rest goes to the theater owners). Second, production budget figures are notoriously unreliable and seldom include P&A (that is, prints and advertising, the cost of distributing and marketing a film, which is often nearly as high as the production budget). Third, many movies perceived as domestic flops (like “After Earth,” “The Golden Compass” or “Waterworld,”) actually made enough money overseas to break even. Plus, it’s hard to rank money-losers unless you take care to account for inflation.
For instance, consider “Cleopatra” (1963), generally mentioned as one of the biggest flops ever. Yet even with inflation, it’s nowhere near the worst. “Cleopatra’s” $44 million cost (including P&A) made it one of the most expensive movies of all time, costing $338 million in today’s dollars. It was actually the top-grossing movie of 1963 in North America, but its initial domestic earnings were still $18 million shy of its cost (a loss of $138 million today), which was nearly enough to bankrupt 20th Century Fox and to help force the sale of its backlot to developers (the site that is Century City today). Still, foreign grosses ultimately cut the loss to $6 million, or a relatively modest $43.5 million.
Same goes for “Ishtar,” which famously lost $40 million in 1987. At $84 million, adjusted for inflation, that loss isn’t even in the ballpark. The biggest money-losers of all time caused their backers to write off well over $100 million in 2015 dollars.
With those caveats, Moviefone has done its best to research the costs and losses, adjusted for inflation, to determine Hollywood’s biggest write-offs ever. Given how many of them are recent would-be blockbusters, it’s a wonder that Hollywood is still in business.
from The Moviefone Blog http://ift.tt/1b0BKYH