Warner Bros claim HARRY POTTER 5, the 9th biggest film of all time, is still in the red!
Mike Fleming at Deadline has gotten his hands on a Warner Bros. accounting statement for Harry Potter and the Order of the Phoenix, the 9th highest grossing worldwide film of all time and wow... just, wow. Despite earning just short of $1 billion from a $150 million budget - the statement claims that the July 2007 movie actually incurred a financial loss for the company of around $167 million, meaning there was no cash left for any of the talent who had net profit based deals. (I.e. a percentage of revenue minus expenses). But where did all the money go? The statement claims it mostly went on distribution, advertising and print costs; having us believe they continued funding expensive Harry Potter movies despite the franchise being so clearly financially poisonous.
I ran the data above by several attorneys and agents, who are so accustomed to seeing studio accounting wave magic pencils over hit movies that they weren't surprised even a Harry Potter film that grossed nearly $1 billion would fall under the spell. As one dealmaker tells me: "If this is the fair definition of net profits, why do we continue to pretend and go through this charade? Judging by this, no movie is ever, ever going to go to pay off on net participants. It's an illusion to make writers, and lower-level actors and filmmakers feel they have a stake in the game."