Please explain this Hollywood accounting for me. It cost 130 million to create and made 450 million.
You are telling me they spent 300 million in marketing for Tarzan (in 1999 dollar value as well) and only made 15 million?
This is the rule of thumb that Deadline and the trades use:
Take the stated budget and add 50% for marketing and other administrative costs.
Take the BO take and split it in half between the theater and studio.
This is only a 'rule of thumb' because a studio could spend a lot more on marketing or a lot less, depending how they think the movie will do. Also, the split between theater and studio varies. When first released, studios in the U.S. can get get up to 60% (or higher if you're Disney leveraging its power with regard to a Star Wars movie). But over time in the theater, that share decreases. Internationally, the studio gets *less* than 50% of the BO. So, as a rule of thumb, it's just averaged to 50%.
We'll never know the exact spending on advertising or all the theater splits... they keep that secret. So, anyone who says they know for sure what it is is lying.
Since there is imprecision in the rule of thumb, one shouldn't take, say, a $10M loss as proof of a "bomb." The numbers are a little loosey goosey. But when you start getting to $50M in either profit or loss, then one can be more confident that it lost or made money.
The other benefit of the rule is comparing all movies against one another to see how they did relative to one another.
This also highlights how devastating a big budget movie can be. E.g., a movie with a $200M budget actually costs $300M and needs to make $600M in the BO just to break even for the studio.
E.g., On Stranger Tides took in over $1B at the BO, but because its budget was a whopping $411M, it lost $93M. Looking at the BO, one would think the movie was a huge success. But... they couldn't contain their costs and the audience and critical reviews were bad. So, $1B at the BO, and it failed.
Umm, actually...
