Profits
From ForcaWiki, the simple encyclopedia
| In one sentence | Whatever money is left over after subtracting all the costs of running a business or making a movie from everything it earned. |
|---|---|
| Category | Finance |
| Related | Revenue, Costs, Participation |
Imagine your lemonade stand takes in 50 dollars over a weekend, but you spent 20 dollars on lemons, sugar, and cups to make it happen. Subtract that 20 dollars from the 50 you brought in, and you are left with 30 dollars of real profit, the part you actually get to keep.
Profits work exactly the same way for any business, or any movie: Revenue minus all Costs. Revenue is everything earned, and costs are everything spent to earn it. Whatever is left over once you subtract one from the other is the profit.
Why the exact number can get complicated
For a movie, calculating profit can get surprisingly complicated, since there are so many different costs to subtract, and so many different kinds of revenue coming in from box office, streaming, and other deals. People who have a Participation in a movie's profits often pay very close attention to exactly how that profit number gets calculated, since a contract's definition of profit can make an enormous difference in how much they actually get paid.
Fun facts
- A movie can earn an enormous amount of revenue and still show very little profit on paper, if its costs were high enough.
- Because "profit" can be defined differently in different contracts, Hollywood has a long running joke about "creative accounting," where a movie somehow always seems to show barely any profit at all.
- Profit is the number that ultimately decides how much money trickles all the way down to the bottom of a movie's Waterfall.