The Best Entertainment Era

In Shahai Entertainment's office, Mary sat across from Ronan and asked, How do you settle this account?

Yesterday, the overseas copyright fees paid by Sony Entertainment in two installments have all arrived in the account. Human Purge Project is a typical financing project. Ronan has signed a contract with the investor in Abu Dhabi. Compared with refinancing, investors must be given a share of the profits.

But how to divide it specifically, there is a lot of room for maneuvering inside.

We try to standardize our operations. Ronan has been studying Hollywood's financial regulations and accounting standards, as well as related laws, since May, and has enough understanding of this aspect. Since signing the contract with Sony Entertainment, he has had relevant consideration. He said: This involves the next step of financing plans, and we can't go too far.

Mary nodded, not to go too far, not to be unable to do it.

Ronan took a sip from his teacup, and then said: It is a common practice in the industry to deduct the tax for next year's tax return first, and then the 15% management fee, which will also be deducted.

This is a legal expense incurred during the filming and production process. The film is fund-raising and shooting, but Shahai Entertainment is the project operator. The manpower, time, loss, office and management expenses incurred during this period also belong to the cost paid by Shahai Entertainment.

Mary didn't say anything, but just wrote down in her notebook, 15% of the management fee, which is not too much, which is 3.75 million US dollars.

This ratio is of course calculated before tax.

Ronan put down his teacup and continued: The US$25 million is the licensing fee for the two films The Purge of Mankind and The Last Jedi. It's not appropriate to share half of it with one film, right?

Mary shook her head and reminded: We're going there to raise funds, we can't go too far.

What about a quarter? Ronan asked again.

This fundraising is also related to the establishment of distribution channels in the next step, and the current efforts are for more gains.

Mary thought for a while and said, It's not appropriate. The proportion of Return from the Jedi should not be too high.

Ronan nodded lightly, thought for a while, and said, 3 million dollars.

As a conscientious entrepreneur and capitalist, he is quite generous.

Many companies in the industry often let bad movies take one-third or even half of the revenue when packaging.

Sure enough, I'm a nice guy.

Hmm... that should be true.

With the North American box office of Jedi Survival at US$800,000, the most optimistic overseas copyright is to sell at US$500,000.

What's more, no one cares about the overseas copyright of this bad movie. If it is not packaged, it will just rot in the hands.

3 million US dollars? Mary thought for a while, and said, Two films are sold as a package, and one of them only occupies one-eighth, so it should be no problem.

The Arabs don't understand Hollywood's legal and compliant operations at all. They originally packaged The Last Jedi to dilute profits.

There is the last item, profit sharing. Ronan said directly: This is done according to the law and the contract. We are a film production company, so we naturally enjoy 20% of the film's profit share.

This is a small clause in the contract signed at the beginning. As the producer, Sand Sea Entertainment, of course, does not work for nothing, and can give priority to withdrawing 20% ​​of the profits.

As far as this 20% ratio is concerned, in order to attract investment, Ronan found out with his conscience that the precondition for distribution of truly black-hearted companies is not profit, but total income.

Mary wrote down another $5 million in her notebook.

Ronan resisted the desire to create more expenses, and said to Mary: Make the account more beautiful and more standardized.

Mary nodded: I have nothing else to do.

Go. Ronan replied.

In just two days, a financial report of the Human Clearance Plan revenue from markets outside North America,

It was submitted by Mary to Ronan.

The US$25 million paid by Sony Entertainment, after deducting US$3.75 million in administrative expenses, US$3 million in profits from The Last Jedi, US$5 million in producer profits, plus pre-withholding taxes and producer alliance management fees, etc., In the end, $11 million remained.

For the next financing consideration, Ronan gritted his teeth and vomited blood.

When I went to Abu Dhabi, I took out the relevant reports and proved to the Arabs: Look, what a trustworthy person I am.

For Hollywood, local investors and overseas investors are two completely different groups.

There are differences in treatment in any country and industry.

With a legal income of more than 10 million US dollars, with such a sum of money, Ronan was more confident and planned three plans at the same time.

One is the upcoming trip to Abu Dhabi, code-named Desert Operation; the second is to solve the distribution channel, which is one of the important reasons for his continued financing; the other is a possible future trip to India, code-named A San .

Especially for the latter action, after studying the laws and regulations here and the industry rules prevailing in the industry, Ronan is going to play a big game.

Robert inquired that people from India have been more active in Hollywood recently. It seems that some investment institutions in India are doing preliminary investigation and preparation work for future investment in Hollywood.

Not afraid that you want to invest, but afraid that you don't want to invest.

In addition, Ronan once again emphasized that Sandsea Entertainment will follow the example of Lionsgate and acquire a distribution company as soon as possible.

George and Robert found information on two small publishing companies, and Ronan got together to study for a while, and then gave up.

The scale of these two distribution companies is too small, and the channels are not perfect at all. It is not as appropriate to acquire them as to create a new distribution company.

Ronan knew the importance and critical role of distribution, because the case of Lionsgate's distribution of The Purge for Sandhai Entertainment was right in front of it.

After six weeks of showings, The Purge exhausted all its potential in the North American market and was released before Thanksgiving.

Six weeks isn't a long run, but it also spent more than a week in theaters longer than Halloween 7, starring Jamie Lee Curtis.

The North American box office of Human Purge ended up being US$52.5 million. Compared with the public production cost of US$11 million, it can be said to be a big hit at the box office.

The film has just been released, and with the participation of the relevant staff of Shahai Entertainment, Lionsgate quickly completed a number of offline distributions, and the large licensing fees plus North American box office revenue were paid in place one after another.

In terms of licensing fees, Lionsgate has its own distribution channels for videotapes and DVDs. According to the industry's prevailing rules, the North American home theater copyright consisting of videotapes and discs is based on a basic transfer fee of US$5 million plus 20% of the lease sales. way, authorized to Lionsgate.

Then, the ten-year broadcast rights of public TV stations are 3 million US dollars, the ten-year broadcast rights of cable TV stations are 2 million US dollars, and the five-year Internet broadcast rights are 500,000 US dollars.

Horror movies have always been weak in derivatives, another major income of Hollywood commercial films, and the licensed derivatives have only sold 1 million US dollars.

Lionsgate Films has just been established, and the Shahai Entertainment they are facing is not a newcomer or a company outside the industry. On the whole, they still follow the spirit of the contract.

In terms of box office, the box office in North America was 52.5 million US dollars. Under the prevailing rules, after deducting theater share and various taxes and fees, Lionsgate's box office share finally became 26 million US dollars.

According to the distribution contract, Lionsgate will take 28% of the total North American box office, which is 14.7 million US dollars, which includes publicity and distribution costs.

Distribution of home theater rights, new media and television rights took a 20 percent cut, at $2.1 million.

Derivatives fifty percent, $500,000.

Lionsgate earned $17.3 million from The Human Purge with a total investment of no more than $6 million.

This can be said to be huge profits.

A small-budget horror film that exploded at the box office can create an astonishing revenue ratio even if the publicity and distribution costs are included.

Since the end of November, Lionsgate has successively paid various types of commissions to Shahai Entertainment. In a period of more than a week, Sandhai Entertainment received a total of 20.2 million US dollars.

Excluding the US$11 million disclosure cost, plus the investment of Sandhai Entertainment in the film promotion and distribution stage, the producer of Sandhai Entertainment has made profits in the North American market, which is not even comparable to that of Lionsgate Films, the distributor.

(The income calculation rules refer to the two books How Hollywood Talks Business written by Dana Upston and A Guide to Business Operations of Independent Films by August Finney. The situation may be different from the real situation, but the two books The authors of this book are all practitioners in the entertainment industry, and there will not be too many discrepancies.)

(In addition, regarding the publicity and distribution fees, as explained above, this part of the fee is incorporated into the rake. Those films with a 30% rake and an additional publicity and distribution fee are mostly produced by the same group. It was created by film companies and distribution companies, and the main purpose is to dilute profits.)