Ah, Hollywood Accounting!

The Los Angeles Times is reporting that Dreamworks and Aardman are going their separate ways after the disappointing performance of Flushed Away and Wallace & Gromit: Curse of the Were-Rabbit.

Wait… Wallace and Gromit? Wasn’t it #1 on opening weekend? Didn’t it stay in the top 5 for at least a month?

Aardman’s dry British wit went over well with critics on such films as “Chicken Run” in 2000 and 2005’s “Wallace & Gromit: The Curse of the Were-Rabbit,” which won an Oscar for best animated feature.

But both “Wallace & Gromit” and “Flushed Away” were costly misfires, failing to resonate with American audiences. DreamWorks reported a $25-million loss on “Wallace & Gromit.”

Hmm, according to IMDB, W&G had an estimated budget of $30 million. It grossed $16 million its opening weekend and went on to gross $56 million by January, 2006. Domestically. That’s not even counting foreign distribution or DVD sales.

If they spent $30 million and made more than $56 million, how exactly did they “lose” $25 million? Where did that missing $50 million go?

5 thoughts on “Ah, Hollywood Accounting!

  1. Stacy

    Disappointed with the results translates to “Didn’t beat Disney to a pulp.” The numbers are simply a CYA measure that doesn’t seem to pan out under scrutiny.

    Reply
  2. West

    As I read the post, I forgot the title. At one point, I was ready to ask what the hell was up with those numbers… then I did had a V-8 slap moment.

    I don’t know how much marketing costs, but I’d be surprised if it fully accounted for the discrepancy.

    Reply
  3. Anonymous

    I know this is an old post but I can’t resist…

    You’re right, but don’t be so surprised. I can “prove” a loss on the back of a bar napkin.

    Let’s assume the BO gross is roughly correct (a big assumption seeing as it doesn’t hurt the studios to inflate the BO grosses as they are often used as marketing ploys)

    $56m – Gross
    Less taxes and theatres’ cut (can be between 40% – 60%)

    Left with $25m
    Less Distrubtor’s cut (can vary but lets asume 20%)

    Left with $20m
    Less marketing costs (not cheap and typically at least the original cost of the movie)

    Left with -$10m

    Also to be taken from any profit made will be Sales Agent’s cut (if applicable), studio overhead (if not part of the $30m), etc, etc.

    BUT!

    You wisely brought up DVD sales. This is likely to be where the studio re-couped. Also, I’m sure I saw some related toys, etc.

    In the long-run they are very unlikely to have lost money but that doesn’t necessarily make the claim completely untrue – it could have lost money right now.

    Hollywood accounting is incredible – in almost any other business it’s actually called fraud but in Hollywood it’s fine.

    Oh, and don’t forget to consider the validity of your sources

    DreamWorks reported a $25-million loss

    Reply

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