I just read that Chris Tucker earned 25 million + 20% “back-end” gross for Rush Hour 3.
Googling isn’t helping me. What exactly does that mean?
AIUI, it’s just the gross. It’s called “back-end” because actors are traditionally paid “up front,” either as a negotiated lump sum or as wages. An actor can choose to gamble on a blockbuster, or push forward a personal project, by forgoing all or some of the up-front pay in exchange for a share of the box-office. A share of the gross (instead of net profit) is a better deal for the actor, usually, because even with a sizable gross, there may be no profit.
Ah, thanks.
So, since he got the 25 million, it really wasn’t a back-end deal then.
Keanu Reeves got 15% of the gross for the Matrix sequels, although he gave most of that to the crew. Those blockbuster actors make serious cash.
A film teacher of mine who worked for many years as a development executive for a production company once said that “no movie ever makes a profit… officially”. Of course that’s probably a bit of a hyperbole but the point is that “creative accounting” practices are rife among movie studios. He said that if a studio promises you a percentage of the profit, don’t ever expect to see a dime no matter how successful the movie is or appears to be.
The gross is the amount of money a movie made.
Back end refers to the contingency aspect of it. It only kicks in if a certain number of conditions are met first.
Back end is not as good as “First Dollar”
First dollar gross is reserved for only stars of a huge magnitude.
Here’s an example I read about involving “Arnold Schwarzenegger”
Arnold got everything paid for him. EVERYTHING. His salary, his accommodations, his agent fees, his secretaries, his travel expenses, he was paid “real comp” for promotion.
I’ll simplify it for this example.
But let’s say Markxxx stars in a movie with Arnold. I get a 2% “back end” profit.
Here’s the tricky part with “Hollywood Accounting” it all depends on how profit is defined.
The term “back end” is referring to Gross Profits after certain conditions are met. So in this case we’ll say, I get 2% back end after all “first dollar gross” are paid.
Now I would think OK Arnold’s salary is 10% of first dollar gross.
So the movie makes 100 million dollars. Arnold get $10 million in profit. but those dollars are “First dollar gross”
Markxxx woujld be getting “back end gross” So in straight forward terms you would be getting this
Gross Profit: 100 Million
Arnold’s Profit 10 million
Remaining Profit 90 million
Markxxx gets 2% of 90 million NOT 2% of 100 million.
You see Markxxx gets 2% of the REMAINING profit. Not 2% of the “First dollar Gross.”
So Markxxx would be thinking he’s getting 2% of 100 million or 2 million dollars when he’s really gonna get 2% of 90 million dollars or 1,800,000 dollars
In real life it would be more complex
In the case of Arnold, normally he’d pay his staff expenses, his agent’s fees, his laywer fees, his travel expenses and the like out of his 10% “first dollar gross” But because he’s a huge star he keeps the entire 10% and the movie pays all of the above. Now that is very unusual. This only happens for stars of the first magnitude
It all depends on how you define Gross. This is why for stars they have to get the “First dollar Gross” or they wind up wiht just another form of “net income.”
For instance Gross for movies is usually started to calculated at the money the movie takes in MINUS the distribution fees. But “first dollar gross” means just. The first income that comes in period.
There is a great book called “The Movie Business” which explains “Hollywood Accounting” in detail. And it’s much, MUCH more complicated than the example I gave. That was an oversimplification to show you the idea
Back end gross makes me think they ran out of toilet paper in the john.
In the instance in the OP, it appears that the 20% bank end gross is really just an equity kicker. He’s getting paid his upfront dollar amount of $25 million, but if the movie is really successful, he gets to participate in that upside.
TThis goes back a ways. From Shakespeare in Love:
Philip Henslowe: But I have to pay the actors and the author!
Hugh Fennyman: Give them a share of the profits.
Philip Henslowe: There’s never any.
Hugh Fennyman: Of course not.
Philip Henslowe: Mr. Fennyman. I think you might have hit upon something!
ETA: It’s been said that in Hollywood the truly creative people are the accountants.
Look up David Begelman to get a glimpse of the Hollywood bookkeeping shenanigans. Actors have better lawyers and agents now, so outright theft is less common. Another example of the choices actors have to make is found in Donald Sutherland’s payment for the movie Animal House. He took a small upfront fee for his role instead of counting on a backend payment that would have earned him millions, if he’d been able collect it.