Director of Photography Department of Huayu

Chapter 165: Gambling, Risk Control

The atmosphere in Universal Pictures' reception room was a little heavy.

Wu Chen put down the coffee cup in his hand and looked at David Linden and Mary Parent opposite him, the smile on his face still relaxed.

"Best Picture and Best Director, only 5%?

Wu, the conditions are not like this in Hollywood."

David Linden looked embarrassed and refused directly.

"Our accounting team might find it hard to accept such conditions," Mary Parent said tactfully.

Normally, winning just one of these two can increase box office profits by 5%.

And now Wu Chen actually requires winning both prizes before giving him the 5%. This is really asking for too much.

"Then let's bet on the box office."

Wu Chen suddenly changed the subject and casually proposed this, which startled the two people opposite him.

Jason Blum sat calmly beside him and continued to look through the contract details.

When he came, Wu Chen told him that their movie must not be like "Crash". Although the film company won awards, most of the profits were eaten up by marketing, publicity and additional costs.

Wu Chen's meaning was very clear: if there was a chance, eat more; at worst, eat less; don't follow the rules.

Wu Chen's idea was obvious and pointed to a possibility.

"Then let's bet on the box office."

David Linden and Mary Parent leaned forward, interested.

"What kind of bet?"

"We set two benchmarks - if we reach the first benchmark, we will accept the originally proposed 25% North American commission and 30% overseas commission, but the box office share or success incentive bonus with additional box office incentive clauses needs to be reduced.

"To reach the second baseline, your North American and overseas commissions will be reduced to the required level, and additional box office incentive clauses after Oscar wins will no longer be set."

David Linden and Mary Parent looked at each other, both of them were a little hesitant, but they couldn't help but think that people working in the film and television industry all loved to gamble.

There are too many things Hollywood gambles on.

David Linden pressed the issue: "What if the box office doesn't reach the first benchmark?"

"It's simple." Jason Blum added, "Your North American commission will be increased to 30%, and overseas to 35%;

The additional box office incentive clauses are in line with Hollywood standards. You take more profits, and we bear the cost of artistic failure."

At this moment, the conference room fell into a brief silence.

David Linden drummed his fingers on the table, his brow furrowed.

"If we accept this clause, how will Oscar's PR and marketing expenses be calculated?"

"If you do what you said, we won't interfere, but the cost will be capped at $500 million. You will pay it upfront, and it will eventually be deducted from the global box office."

Mary and David exchanged glances. The two baselines were a more flexible solution.

For Universal, if the bet wins, it can conservatively earn more than the traditional share - but if it loses, it is not unacceptable because it means higher box office and the distribution commission will not actually be much different.

This is a small risk that needs to be taken when betting.

They both have the authority to make the decision, and they are not likely to lose tens of millions of dollars in profits because of a bet.

They have a professional organization that has estimated the upper limit of the box office for this movie.

"Okay!" Mary and David nodded slowly.

"OK, the first baseline is 5000 million in North American box office and 3000 million in overseas box office." As soon as Wu Chen finished speaking, he was strongly opposed by David Linden and Mary Parent.

"I don't agree!"

"Me too. 50 million at the North American box office is too low, Wu. We know the box office power of your low-budget films. You can't just get away with this."

David Linden smiled and shook his head, then continued: "The North American box office is 7000 million US dollars, and the overseas box office is 4500 million US dollars." "That's too high. It's just a small movie with a cost of 300 million!" Jason Blum was dissatisfied and deliberately emphasized the cost.

After all, the cost is there.

"There are too many low-budget comeback stories in Hollywood, which are the easiest to deceive people. We only trust the most professional analysis.

We saw the response at Cannes, and the aftermath of Hurricane Katrina hasn't faded, so we think it has the potential to be a hit."

"But I don't think the film will do very well at the box office overseas. After all, it's still a story about race in America."

Wu Chen spoke slowly.

After a lot of arguing among the four people, the first baseline was finally set at 6000 million US dollars in North American box office and 3800 million US dollars in overseas box office.

The second baseline is to pull between $1 million in North American box office and $6000 million in overseas box office.

After a long discussion, the second baseline North American box office failed to drop, and was fixed at US$1 million in North America, while the overseas box office was US$6000 million.

According to the agreed rules, if this benchmark is achieved, a 25% North American commission and a 30% overseas commission will be accepted, but with an additional box office incentive clause, that is, 5% for double jackpots and 2.5% for single jackpots;
If you win the Best Actor or Best Actress award, you will get a 1.5% share. The other non-technical awards are all 1%. You need to win two or more technical awards to participate in the 1% share.

If the second baseline is reached, Universal's North American commission will need to be reduced to 22%, and its overseas commission will be reduced to 26%, with no additional box office incentive clauses.

The two sides shook hands happily. It was only a preliminary deal at the moment, and the specific details still needed to be discussed by the lawyers and accountants of both parties, and even Wu Chen and Jason Blum had to be present.

Universal also invited the two to dinner together.

After a pleasant lunch, Wu Chen looked at the big Hollywood sign and suddenly asked Jason Blum:
"Jason, is it possible that we'll be ripped off by Universal? These Hollywood studios have some serious tactics."

Wu Chen's words immediately silenced Jason Blum.

"Let me think about it." Jason Blum thought for a moment, "We didn't propose to use net profit as the benchmark, did we?"

"No, it's all based on the gross box office revenue in North America and overseas!"

"That's good!" Jason Blum patted his chest. Wu Chen remembered clearly what he said. If there were problems in certain parts of the contract of these big companies, they might really be cheated.

After all, a few years ago, the Tolkien Foundation, the original author of "The Lord of the Rings", and director Peter Jackson jointly sued Warner and New Line for "profits being drained".

Industry insiders have analyzed this account and estimate that it will take many years to fight because it involves too many things. Both parties will probably have to frantically hesitate between settlement and litigation for their own interests.

"To prevent problems before they occur, we must first lock down the VAM clauses, have lawyers and accountants review any ambiguities, and address any potential loopholes.
Secondly, we use a third-party authoritative organization to introduce audit rights, do not accept Universal Pictures’ internal reports, and have quarterly audit rights.

We also need to include a 'competitive product protection' clause to ensure our first priority, and also add a clause that 'if the film is re-released after winning an Oscar, the profit sharing will continue to apply according to the old agreement, and no temporary price adjustment or fee increase will be allowed.'"

Jason Blum talked to Wu Chen about the rules and regulations as they walked.

Sometimes a seemingly insignificant clause may become the fuse that causes millions of dollars in losses in the future.

The two walked one after the other on Hollywood Boulevard. There were endless tourists on the street, and the bustling crowd was mixed with languages ​​of various countries. In the distance, street performers were imitating Chaplin's pacing posture.

While talking, I couldn't help but look at the cinema advertising walls lining the street.

A huge poster suddenly occupied the center of the theater——

"X-Men 3: The Last Stand".

A metallic X symbol cuts into the background, with Wolverine, Storm and Cyclops in combat uniforms in the center of the poster. A blazing energy ray passes through the middle, burning the words "Battle of Destiny."

"How is the box office of this movie?" Wu Chen pointed.

If I remember correctly, "X-Men 3" was released a few days ago.

"It made 100 million in the first three days of the box office!" Jason Blum said with some envy, and he didn't know whether "Now You See Me" could achieve this result.

The advertisements continued to rotate, and the next one was "Cars" which would be released in a few days.

A red anthropomorphic racing car makes a cool appearance, full of cartoon and speed, and is obviously a big investment targeting the summer family market.

And one frame further back, the next light box slowly lights up.

Tones of gold and black suddenly appeared, and the playing cards slowly turned over. Above the cards was a golden English title: "Now You See Me!"

At this moment, his phone vibrated and a familiar name appeared on the screen - Michael Burns of Lionsgate Films.
(End of this chapter)