When you go to Boxofficemojo it shows the production budget and shows how much the film grossed internationally and domestically. I always thought that a film had to make at least 2 times its production budget just to breakeven. Is this true? Example is Green Lantern. It cost $200 million, but only grossed $201 million so it was obviously a flop. What it the profit-level for a film?
Producing : When is a film considered in profit? by Martin Reese
When is a film considered in profit?
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You got it. It bombed. DVD used to be the backstop but those days are gone.
I am a little confused by the P&A. Is it $4 million and you still give 50% of the gross to the exhibitor?
It's not always exactly 50% but that's a good general number to use. The theaters return that 50% of the box office to the production. So cut the Box Office Mojo in half - it grossed $201 million so the production gets about $100 million. THEN all the numbers Vitaly gave you kick in. So (in general) a $200 million movie needs to make $500 million at the B.O. before it starts to show a profit.
You can also define it as a "Multiple" of "Negative Cost".
I wouldn't dwell too hard on trying to apply box office numbers versus estimated budget to studio profit/loss calculations. Even within the same accounting system there are many different sets of numbers being applied to maximize the advantage to the company for tax, business and vanity purposes. For example, in calculating profits for tax purposes, the goal is to minimize visible profits so all possible "losses" are factored in so that you will always show a loss. When declaring to shareholders and financial institutions, other sets of numbers are used to show actual realized capital, infrastructure enhancements and dividend disbursements. When touting success, box office numbers are flaunted without disclosure of other possibly negative factors. Also Domestic and Foreign audience numbers don't take into account presales deals, licensing and many other aspects of revenue income which are calculated separately. It's kind of like sausage being made: you're never really gonna know what's in it, so the only thing you can do is look at how many casualties it leaves in its wake. If everybody has a job at the same studio in six months it was a good sausage. If there's a big body count, that was a bad sausage.
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Thanks for all the comments. This has been very helpful in my understanding production budgets and profits.