Net Profits
From ForcaWiki, the simple encyclopedia
| In one sentence | What is left of a movie's gross receipts after subtracting every imaginable cost, including the budget, distribution fees, and residuals. |
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| Category | Film and Television |
| Related | Gross Receipts, Negative Cost, Distribution Fee, Profits |
Imagine your lemonade stand's grand total for the summer, then subtracting the lemons and cups, the table rental fee, the poster printing costs, and literally everything else you can think of that you spent money on. Whatever tiny amount is left over at the very end is your true, honest Profits.
Net profits works the same way for a movie, just with a much longer list of things to subtract. It is Gross Receipts minus essentially every imaginable cost relating to the film: the Negative Cost of making it, plus interest on that money, the Distribution Fee, Residuals owed to unions, and all the other distribution costs along the way.
Why "net profits" has a reputation
Because so many different costs get subtracted before reaching net profits, it can end up being a surprisingly small number, even for a movie that earned enormous gross receipts. This is exactly why Hollywood has a long running joke about net profits: a movie can be a massive hit and still show almost no net profits on paper once every cost has been counted.
Fun facts
- People who negotiate a share of net profits often fight hard over exactly which costs are allowed to be subtracted, since a broader list of allowed costs shrinks net profits for everyone else.
- Generally, other people's separate profit shares are not themselves subtracted when calculating net profits, only the movie's actual costs are.
- Net profits sits at the very bottom of a movie's Waterfall, the last pool to get filled once everyone higher up has already been paid.