Chapter 57: Profit profit

　　 In the office of Shahai Entertainment, Mary sat opposite Ronan and asked, "How is this account calculated?"
Yesterday, all the overseas copyright fees paid by Sony Entertainment in two payments have been received. "Human Removal Project" is a typical financing and shooting project. Ronan has signed a contract with investors in Abu Dhabi and is about to go to Abu Dhabi. Compared with financing again, it must give investors a profit share.
　　 But how to divide it specifically, there is a lot of room for manipulation.
"We try our best to standardize operations." Ronan has been studying Hollywood's financial regulations and accounting standards, as well as related laws, since May. He has sufficient understanding of this aspect. Since signing the contract with Sony Entertainment, he has been related Consideration. He said: "This involves the next financing plan, and you can't do too much."
　　Mary nodded, not too much, not too much.
　　 Ronan took a sip from his teacup, and then said:
It is a common practice in the industry that the tax for next year’s tax return will be deducted first, and then 15% of the management fee will be deducted.

　　 This is a legal cost incurred during the filming and production process. The film is fund-raising and shooting, but Shahai Entertainment is the project operator. The manpower, time, waste, office and management expenses incurred during the period are also the costs paid by Shahai Entertainment.
　　Mary did not speak, but just wrote a note in the notebook, 15% of the administrative expenses, 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 "Human Removal Project" and "Jedi". It is not appropriate for one film to share half of it?"
　　Mary shook her head and reminded: "We need to raise funds over there, not too much."
　　 "How about a quarter?" Ronan asked again.
　　 This fundraising is also related to the establishment of distribution channels in the next step. The current efforts are for more gains.
　　Mary thought for a while, and said: "It's not appropriate. The proportion of "Jedi" cannot be too high."
　　 Ronan nodded slightly, pondered, and said, "3 million dollars."
　　As a conscientious entrepreneur and capitalist, he is still quite generous.
　　Many companies in the industry make bad films lose one-third or even half of their revenue when they pack them.
　　 As expected, I am a good person.
　　 Hmm... This should be correct.
　　 With a box office of US$800,000 in "Jedi", the most optimistic overseas copyright is to sell for US$500,000.
　　 Besides, no one cares about the overseas copyright of this bad film. If it is not packaged, it will only rot in the hands.
　　 "3 million dollars?" Mary thought for a while and said, "Two films are packaged for sale, and one of them only occupies one-eighth. It should be fine."
　　The Arabs don’t understand Hollywood’s legal and compliant operating methods. They originally packaged "Jedi" to dilute profits.
　　 "There is the last item, profit sharing." Ronan said directly: "This is in accordance with the law and the contract. We are a film production company and naturally enjoy a 20% profit share of the film."
　　 This is a small clause in the contract signed at the time. As a producer, Shahai Entertainment is certainly not working for nothing, and it has priority to withdraw 20% of the profit.
　　 This 20% ratio is also Ronan’s conscience to find in order to attract investment that the precondition for distribution of a truly black-hearted company is not profit, but total revenue.
　　 Mary wrote down another 5 million dollars in the notebook.
　　 Ronan resisted the desire to make more expenses, and said to Mary: "The account should be more beautiful and standardized."
　　Mary nodded: "I have nothing else to do."
　　 "Go ahead." Ronan replied.
　　In just two days, a financial statement of income from markets outside North America for the "Human Removal Project" was submitted by Mary to Ronan.
Sony Entertainment paid US$25 million, deducting US$3.75 million in management fees, US$3 million in profits from "Jedi", US$5 million in producer profits, plus withholding taxes and producer alliance management fees, etc. In the end, there was 11 million dollars left.
　　 In order to consider the next financing, 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 completely different groups.
　　 Different treatment, any country and industry have.
　　 Legal income of more than 10 million U.S. dollars. With such a sum of money, Ronan is more confident and instigates three plans at the same time.
One is the upcoming trip to Abu Dhabi, code-named "Operation Desert"; the second is to solve the distribution channels, which is one of the important reasons for his continued financing; the other is a possible future trip to India, code-named "Asan" .
　　Especially the latter action. After studying the laws and regulations and industry rules prevailing in the industry, Ronan is ready to play a big one.
　　 Robert inquired that people who came from India have been more active in Hollywood recently. It seems that some investment institutions in India are preparing for future investment in Hollywood.
　　 I'm not afraid that you want to invest, just that you don't want to invest.
　　 In addition, Ronan once again emphasized that Shahai Entertainment used Lionsgate as an example to acquire a distribution company as soon as possible.
　　 George and Robert had found information about two small distribution companies, and Ronan had worked together for a while and then gave up.
　　 The scale of these two issuing companies is too small, and the channels are not perfect at all. It is not as appropriate to acquire them as to build a new issuing company.
　　 Ronan knows the importance and key role of distribution, because the case of Lionsgate Entertainment’s release of "Human Removal Project" for Shahai Entertainment is in front of us.
　　 After six weeks of screenings, "Human Removal Project" exhausted all its potential in the North American market and was released before Thanksgiving.
　　 The six-week screening time is not long, but it also spent more than a week in theaters than "Halloween 7" starring Jamie Lee Curtis.
　　 The North American box office of "Human Elimination Project" ended up at 52.5 million U.S. dollars. Compared with the public production cost of 11 million U.S. dollars, it can be said to be a big box office.
　　 The film has just been released. With the participation of relevant staff from Shahai Entertainment, Lionsgate has quickly completed a number of offline distributions. The large licensing fees plus the North American box office share have been paid in place.
In terms of licensing fees, Lionsgate has its own video tape and DVD distribution channels. In accordance with the prevailing rules in the industry, the North American home theater copyright consisting of video tapes and discs is divided by a base transfer fee of 5 million US dollars plus 20% of the rental sales. Way, authorized to Lionsgate Pictures.
　　 Then, the public TV station’s ten-year broadcast rights were US$3 million, the cable television station’s ten-year broadcast rights were US$2 million, and the Internet’s five-year broadcast rights were US$500,000.
　　 Another major revenue derivative of Hollywood commercial films, horror movies have always been weak, and the derivative license only sold for $1 million.
Lionsgate has just been established, and Shahai Entertainment is not a newcomer without a foundation or a company outside the industry. Generally speaking, it still follows the spirit of the contract very much. After all kinds of income are received, it will begin profit settlement with Shahai Entertainment~www. EbookFREE.me~In terms of box office, the North American box office was US$52.5 million. Under the prevailing rules, after deducting theater share and various taxes, it ended up with Lionsgate’s box office share of US$26 million.
　　 According to the distribution contract, Lionsgate took 28% of the total box office in North America, which is US$14.7 million, which includes the publicity fee.
　　 The distribution of home theater copyrights, new media and television copyrights was 20%, 2.1 million US dollars.
　　 Derivatives are 50%, 500,000 US dollars.
　　 Lionsgate Films made a revenue of US$17.3 million from the "Human Removal Program" with a total investment of less than US$6 million.
　　 This can be said to be huge profits.
　　 A small-cost horror movie with a big box office, even if it is included in the publicity fee, it can create an amazing profit ratio.
　　Since the end of November, Lionsgate has paid various shares to Shahai Entertainment. In more than a week, Shahai Entertainment has received a total of USD 20.2 million.
　　 After removing the 11 million US dollars of public cost, coupled with the investment of Shahai Entertainment in the promotion and distribution of the film, the producer of Shahai Entertainment has made profits in the North American market, and it is not even comparable to the distributor of Lionsgate.
(The income calculation rules refer to the two books "How Hollywood Talks Business" written by Dana Upston and August Fanny's "Independent Film Business Operation Guide". The situation may be different from the truth, but the two The authors of this book are all practitioners in the entertainment industry, and there will not be too many discrepancies.)
(In addition, as for the cost of publicity and distribution, I have already explained it in the previous article. This part of the cost is included in the commission. Those films that are 30% of the commission, and the publicity costs are additionally calculated, most of which are made under the same group. The main purpose of film companies and distribution companies is to dilute profits.)