Exploiting Hollywood 1980

"How much money do I have now?"

“If we don’t calculate the future earnings line for a few of your movies, it’s probably like that. Your assets are mostly stocks and two properties in Manhattan and Staten Island in New York.

Your income is mainly the director's remuneration for movies and commercials. And the share obtained from participating in the film investment. "

With the idea of ​​investing his own money and producing and distributing "Spicy Dancing", Ronald quickly called accountant Lawrence Wang from New York to Los Angeles.

Lawrence spread out the accounting books and introduced Ronald's income over the past two years.

"After the night of the comet, your income starts to increase year by year.

Breakdance pre-director remuneration plus the first box office share is $1.15 million. Later, Cannon took over the domestic distribution, and the percentage of the share you got was reduced a lot, and it ended up being close to $750,000.

In total, you took $1.9 million from the film, the most lucrative of all your projects.

The first film of Longwei Kid, the director paid 400,000 yuan. Because you did not participate in the investment of the project, the proportion of the director's share is not high. One year after the release, plus you are going to shoot the second Dragon Power Kid, the share will enter your account one after another, and now it has more than 300,000 US dollars. .

The director's remuneration for the second part of Top Gun and Longwei Kid is 500,000 and 600,000 respectively, a total of 1.1 million US dollars. The box office should exceed that of the first film of Longwei Kid, and you will get more revenue from next year. It is estimated that the total revenue will not exceed one million in the future.

In addition, with the addition of several MVs, 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.

Add to that what you get from selling the leg warmer company, and nearly 80 percent is yours. In addition to the books over the years, the remaining dividends of old films, and the dividends of songwriters, etc., the scattered income adds up.

From 1984 to the present, for more than two years, your total income is...about $6.5 million. Lawrence pointed to the final gross income column and showed it to Ronald.

"Each blockbuster movie earns about $1 million, except for the low-budget movie Breakdance, which he has invested in." Ronald is very satisfied with his directing performance.

In fact, Ronald has contributed a lot to several films. If Weintraub hadn't filmed Longwei Kid for him, he would not have become a well-known talent in the industry, and he would go to MGM to manage.

Even more so with Minahan, instead of that breakdance that cost less than a million dollars to make, the cannon may have died out. Not to mention $300 million in junk bonds on Wall Street.

Coupled with the staggering box office figures, the two producers wanted to secretly raise costs, smooth out profits, and give Ronald a little less motivation. Hundreds of millions of box office sales, 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. Overstating the cost of 5 million and 10 million has little impact on the profit points allocated to Ronald. Begging Ronald to shoot a sequel movie, the two simply didn't make a big deal.

"It's just that the tax is too high." Ronald looked at the numbers in the income column. After deducting the tax, he said:

It shrunk to less than five million in an instant.

"This is only after the current commander passed the tax cut bill in 1981, and you can enjoy a relatively low tax rate. He raised the top-level federal income tax threshold and greatly reduced the top tax rate, so you can stay like this. many."

Lawrence pointed to the tax rate table before the tax cut, made a rough calculation, and showed it to Ronald. The highest income tax rate for the former leader was 70%, which was reduced to 50% by the current leader in 1981.

If the income tax income of the former commander is still implemented, and Ronald pays taxes according to the rules, these incomes will only be about three million.

"No wonder no one in Hollywood wanted to make movies in the 1970s." When Ronald saw this number, he immediately understood why very few people made commercial films in the 1970s. A commercial film is paid 1 million yuan, and a literary film is paid 500,000 yuan. After paying taxes, the stars get about the same amount of money, so who will go to commercial films?

"Then my stock dividends are not bad, right?" Ronald's own daily expenses are mainly used in the stock dividend account. It's never been a problem.

"Of course, after deducting the taxes over the years, since 1984, your income has been 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 extraordinarily generous. In March, we could get 26 cents per share, and this time in June it was also announced at more than 20 cents. "

"This dividend is really generous, and I was right to buy this blue-chip stock." Ronald was delighted.

"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. By the end of the year, it had risen to 62. At the end of 1985, it rose to 84. In the second quarter just past, it has risen to 105."

"Not bad," Ronald was satisfied with his stock pick.

Sure enough, while Pepsi is desperately putting out advertisements, it can steadily not expand the scale of advertisements, and do not cut prices for promotions. The market share is still stable and rivals that of Pepsi. This stock is indeed stable.

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

"How much tax do I have to pay if I sell them all?"

"Your holdings of Coca-Cola, McDonald's and other stocks have been more than one year, which are long-term securities investments. This part of the income enjoys the tax rate of long-term capital income, which is much lower than the tax rate of the highest 50% of general income. So you can probably take to around seven million in cash."

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

The production cost of "Spicy Dance" has been kept as low as possible, at least US$4.5 million. Add about the same amount of distribution fees.

This is also the result of repeatedly cutting the issuance budget. Ronald all counted on the film's word of mouth to play a role. In the announcement, apart from using a few old friends to get some free publicity, there was almost no pre-listed media expenses.

Except for the cost of printing, almost all the other money is listed on the marketing materials of the movie theater.

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

"You need more production costs, and I can follow up one-to-one."

High school classmates and good friends of the wrestling team's rich three generations are really good. Little Douglas came to Los Angeles. When he heard that Ronald was short of money, he immediately proposed to make up 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 dang, I like the name, and I want to go to the cinema to see it, what's so hot about this dance. "

Ronald said in his heart that if you know the goods, the name of this movie is really good and very valuable. "The budget for the production is about 4.5 million, and it's best to spend 5-6 million for the distribution. We still have a reserve of one or two million, and I can probably put out six million..."

"Six million? I can't come up with it." Little Douglas was surprised to hear this number. This is much higher than the amount he expected to invest. It turned out that he thought that it would be almost enough to invest three million in production costs.

"Why can't you come up with it? Didn't you say that you could match my capital contribution? I thought what you said was true..." Ronald thought to himself, did Little Douglas talk big in front of him before.

"I used to be able to withdraw 500,000 yuan from the family fund every year, and I still have an investment quota of 500,000 yuan. After investing in breakdance with you, my return is very good. Grandpa also increased my authority, and now I can use five million investment.

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

"That's it..." Ronald sighed, the Hansen family has a great family, but there are many descendants. A few years have passed, and the cash that he can use is more than that of the authentic old money boy Xiao Doug.

"Why do you publish it yourself? If you can find a publisher, we can take the issuance contract and go to the bank to mortgage the loan, so that we can spend more money on production, and we don't have to take such risks."

Little Douglas was very puzzled why he had to pay all the money himself to make a movie. Finding a distribution company could save the expensive distribution cost and the trouble of collecting money. You can also take the issuance contract and go to the bank for loan, and the cash flow pressure of the project is only one-third of the original.

"Hey, you don't know. In Hollywood now, stories about Jewish people are very subtle, and I can't do anything about it." Ronald told little Douglas about the problems he encountered.

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

Think about your Aunt Karen, think about your cousin Donna. If you really like the movie so much, you can also take the long view and continue to find major studios willing to release it.

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

Of course, if you have to make this film, if you want to make it now, I will invest in it too. "

"Thank you," Ronald patted the small shoulder, and the two hugged like they were on the high school wrestling team.

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

"I'm optimistic about you, Ronnie. What if the movie loses money? You'll remember me, and you'll take me with you in future projects that make money." Little Doug knew that he was asking why he still knew there was a risk. To follow up.

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

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

Indeed, is it too risky to invest all of your worth and drag on your good friend's money?

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There is a small problem with the computer today, and it took a lot of time to solve it. The second one will be very late. You can check it tomorrow.

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