Consolidation and Streaming Are Making Hollywood Back-End Deals Less Transparent Than Ever

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The industry’s increasing vertical integration makes keeping track of fair market value “more important than ever,” experts tell TheWrap

Diane Haithman
"Black Widow," Demolition Man," "The English Patient" and TV's "Bones" and "Who Wants to be a Millionaire" have all been involved in profit sharing disputes
(L to R) “Demolition Man," "Black Widow," "The English Patient" and TV's "Bones" and "Who Wants to be a Millionaire" have all been involved in profit sharing disputes. (Chris Smith/TheWrap)

In June 2014, Miramax Film Corp. and the Saul Zaentz Company settled a $20-million lawsuit over profit sharing on Zaentz’s 1996 Best Picture winner “The English Patient.” The celebrated film earned $232 million at the box office and a reported $75 million in video sales.

Zaentz claimed Miramax, then owned by Disney, had padded expenses to reduce the profits — thus reducing Zaentz’s percentage payout. Miramax, he argued, shouldn’t have deducted $17.5 million of theatrical advertising expenses, since the money also benefited the home entertainment release of the movie.

That wasn’t the only time Zaentz had battled over the backend — Hollywoodspeak for taking a percentage of the profits in lieu of a bigger upfront fee.

Diane Haithman

Diane Haithman

Senior Entertainment Business Reporter • diane@thewrap.com • @dhaithman Diane came to TheWrap from a position as Staff Reporter at The Los Angeles Business Journal, covering Entertainment/Media, Philanthropy and Style. Diane was a Los Angeles Times Staff Writer for two decades, covering arts, culture and the TV industry. Her novel Dark Lady of Hollywood was published…

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