Exploiting Hollywood 1980

"How much money do I have now?"

"That's about it if we don't calculate the future earnings curve of several of your movies. Your assets are mainly stocks and two properties in Manhattan and Staten Island, New York.

Your income mainly comes from director's remuneration from movies and commercials. and the share of participation in film investment. "

With the idea of ​​​​investing in the production and distribution of "Dirty Dancing" by himself, Ronald quickly called accountant Lawrence Wang from New York to Los Angeles.

Lawrence opened his accounting books and introduced Ronald to his income over the past two years.

“After the Night of the Comet, your income starts to increase year by year.

Breakdancing's early director's remuneration plus the first period's box office share is US$1.15 million. After Cannon took over the domestic distribution, the share you got was reduced a lot, and it ended up being close to $750,000.

You made a total of $1.9 million from this movie, making it the most profitable of all your projects.

The first part of Long Wei Boy, the director was paid 400,000 yuan. Because you did not participate in the investment in the project, the director's share of the share is not high. One year after the release, plus you have to shoot the second film of Dragon King, the share of the share is gradually coming into your account, and now you have more than 300,000 US dollars. .

The directors of Top Gun and The Kid Part 2 were paid half a million and six hundred thousand, respectively, for a total of $1.1 million. The box office should be higher than the first part of The Dragon King. Starting next year, you will also get more revenue sharing. It is expected that the total revenue will not exceed 1 million in the future.

In addition, coupled with the several music videos, commercials, and aerobics for the elderly filmed by Debbie Reynolds, the income of these scattered directors is not low, with more than half a million.

Combined with the proceeds from the sale of your leg warmer company, nearly 80% belongs to you. Add in the remaining dividends from books over the years, old movies, and dividends from song songwriters, etc., and the scattered income adds up.

From 1984 to now, in more than two years, your total income is...about 6.5 million US dollars. "Lawrence pointed to the last total income column and showed it to Ronald.

"Each blockbuster movie earns about one million U.S. dollars, except for the low-cost movie Breakdancing, which he participated in and invested in, which is more." Ronald is very satisfied with his directorial achievements.

In fact, Ronald contributed a lot to several movies. If Weintraub hadn't filmed The Dragon King for him, he wouldn't have become a well-known talent in the industry and would have gone to work at MGM.

This is even more true for Minahan,

If it hadn't been for Breakdance, which cost less than a million dollars to make, Cannon might have declined. Not to mention issuing $300 million in junk bonds on Wall Street.

Coupled with the astonishing box office figures, the two producers had little motivation to secretly increase costs, smooth out profits, and give Ronald less. With a box office of hundreds of millions, about half of the revenue will be slowly returned to the distribution company after a year.

Then the producer gets half of it, which is also a gross profit of 20 to 30 million. Falsifying the cost by 5 million and 10 million will have little impact on the profit points distributed to Ronald. In addition, there are Asking Ronald to make a sequel movie, the two of them simply stopped doing anything big.

"It's just that the taxes are too high." Ronald looked at the number in the income column. After tax deductions, it instantly shrank to less than five million.

"This is only after the current president passed the tax cut bill in 1981, so you can enjoy a relatively low tiered tax rate. He raised the federal income tax threshold for the highest bracket and significantly lowered the top tax rate. Only then can you stay like this many."

Lawrence pointed to the tax rate table before the tax reduction, made a rough calculation and showed it to Ronald. The highest income tax rate under the previous commander-in-chief was 70%, which was lowered to 50% by the current commander-in-chief in 1981.

If the income tax income of the previous commander-in-chief is still implemented, and Ronald pays taxes in accordance with the rules, the income will probably only be about three million.

"No wonder no one in Hollywood wanted to make movies in the 1970s." Ronald looked at this number and immediately understood why few people made commercial films in the 1970s. The salary for making a commercial film is 1 million, and the salary for making an artistic film is 500,000. After paying taxes, the stars get almost the same amount of money, so who would make a commercial film?

"Then my stock dividends are pretty good, right?" Ronald's daily expenses are mainly drawn from the stock dividend account. There has always been no problem.

"Of course, excluding the taxes over the years, starting from 1984, your income was mainly invested in Coca-Cola stocks.

While dividends are paid four times a year, the stock price is still growing slowly. The first two dividends this year were exceptionally generous. In March, the company received a dividend of 26 cents per share. The dividend announced in June was also over 26 cents. "

"This dividend is really generous. I was right to buy this kind of blue-chip stock." Ronald felt pleased with himself.

"Not only is the dividend generous, but the stock price is also very good. At the beginning of 1984, it was 53 US dollars per share. It had risen to 62 US dollars by the end of the year. It had risen to 84 US dollars at the end of 1985. In the second quarter that just passed, it had risen to 105 US dollars."

"Not bad, not bad." Ronald was very satisfied with the stock he picked.

Sure enough, while Pepsi is desperately advertising, it is still steadily not expanding the scale of advertising or cutting prices and promoting, and its market share is still firmly on par with Pepsi. This kind of stock is indeed stable.

This increase has recovered all the federal income tax and state income tax paid, and a little more.

“How much tax will I have to pay if I sell them all?”

"The stocks you have held in Coca-Cola, McDonald's and other stocks for more than one year are classified as long-term securities investments. This part of the income enjoys the long-term capital gains tax rate, which is much lower than the maximum tax rate of 50% for general income. So you can probably get To about seven million in cash.”

"This money is still not enough." Ronald scratched his head.

The production cost of "Dirty Dancing" has been kept as low as possible, requiring at least 4.5 million US dollars. Plus almost as much issuance fees.

This is the result of repeated cuts in the distribution budget. Ronald was counting on the word-of-mouth of the film to play a role. Apart from using connections with a few old friends to get some free publicity, there was almost no pre-calculation of media expenses.

Except for the cost of copying and printing, almost all other money is listed on the marketing materials at the cinema.

"You still have to find Douglas Jr. for sponsorship." Ronald scratched his head.

"If you need more production fees, I can follow up on a one-to-one basis."

A high school classmate and a rich third-generation best friend on the wrestling team was really awesome. Douglas Jr. came to Los Angeles. When he heard that Ronald was short of money, he immediately offered to fill the gap.

"Aren't you going to ask me what movie I want to make?"

"Isn't it a musical?" Little Douglas picked up the script and read it, "Oh, Dirty Dancing. I like the name. When I saw it, I wanted to go to the cinema to see it. How spicy is this dance? "

Ronald said to himself that you know the goods, the title of this movie is indeed very good and very valuable. "The production budget is about 4.5 million, and it is best to spend 5 to 6 million on distribution. We also have a reserve fund of one to two million, and I can probably spend 6 million..."

"Six million? I can't afford it." Little Douglas was surprised when he heard this number. This was much higher than the amount he expected to invest. It turned out that he thought that investing three million in production costs would be enough.

"Why can't you come up with it? Didn't you say that you can match my investment amount? I thought what you said was true..." Ronald thought to himself whether Douglas Jr. had lied in front of him before.

"I used to be able to withdraw 500,000 yuan from the family fund every year, and I also had an investment quota of 500,000 yuan. After investing in Breakdance with you, my returns were very good. Grandpa also upgraded my authority, and now I can use 500,000 yuan. An investment amount of one million.

But I have invested in other projects before, and now I only have about 3 million left. After adding my own investment return, I can reach 5 million. If you go to a bank for a mortgage loan for the rest, you should be able to get it together no problem. "

"Is that so..." Ronald said, "The Hansen family has a great business, but they also have many descendants." A few years later, I have more cash at my disposal than Doug, a genuine old money boy.

"Why do you want to publish it yourself? If you can find a publisher, we can take the distribution contract and go to the bank for a mortgage loan. In this way, we can spend more money on production without taking such risks."

Douglas Jr. was puzzled as to why he had to spend all his own money to make a movie. Finding a distribution company could save him the expensive distribution costs and the trouble of repayment. You can also take the issuance contract and go to the bank for a loan. In an instant, the cash flow pressure of the project will be only one-third of the original.

"Hey, you don't know. Today's Hollywood is very subtle about Jewish stories, and there's nothing I can do about it." Ronald told Douglas Jr. the problems he encountered.

"Ronald, although you are a genius, I still want to advise you that such an investment is too risky. It is difficult to predict the box office of the movie accurately. You also said that there are plots in the script that Jews do not like. What about inexplicable boycotts? Are you at great risk?

Think of your Aunt Karen, think of your cousin Donna. If you really like this movie so much, you can also think long term and continue to look for a major studio willing to distribute it.

Business is always like this, sometimes it works and sometimes it doesn't. Don't push it too hard.

Of course, if you must make this movie and make it now, I will also invest in it. "

"Thank you," Ronald patted the younger one on the shoulder, and the two embraced like they were on the high school wrestling team.

"Why?" Ronald asked, looking at little Douglas.

"I'm optimistic about you, Ronnie. What if this movie loses money? You will remember me, and you will take me with you if there are any profitable projects in the future." Little Doug knew that he was asking why he still did it even though he knew there were risks. To follow up.

"I will consider it carefully, but I won't let you lose money anyway." Ronald was moved.

He put the script away and put it in a drawer.

Indeed, is it too risky for me to invest all my worth and drag my good friends’ money with me?

－－－－－－Digression－－－－－

There was a small problem with the computer today, and a lot of time was wasted in solving it. The second update will be very late. You can watch it tomorrow.

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