Illustration 'A'

RANSOM

Walt Disney Pictures
Participation Statement
Period Ended March 31, 1998

Film Rental  
  Domestic Theatrical $71,309,701
  Foreign Theatrical 76,275,568
  Free Television 0
  Pay Television 19,294,767
  Home Video 24,255,190
  Non-Theatrical 2,115,767
  Other Sources 25,574
Total Film Rental 193,277,567
   
Less Accounts Receivable 4,690,542
Total Gross Receipts 188,587,025
Less Distribution Fees 64,461,741 [34%] **
Net After Distribution Fees 124,125,284
   
Less Distribution Costs  
  Advertising and Publicity 68,690,709
  Prints 13,005,277
  Other Itemized Costs 14,061,392
Total Distribution Costs 95,757,378 [The total cost to market the film]
   
Net Receipts After Distribution  
  Fees and Costs 28,367,906 [At this point the film is profitable]
   
Less: Negative Cost  
  Direct Costs 75,439,225 [Film Production Costs]
  Overhead@15% 11,315,884 [Studio Lot Overhead …6% of Gross Receipts] **
  Interest 19,863,536 [Studio charges filmmaker for using their money]
  Gross Participations 24,910,342 [Payments to celebrities-- up front]
Total Negative Costs 131,528,987 [Net-point players are out of luck]
   
Net Profits (Loss) (103,161,061)
** 40% Fees of the Gross Receipts go to the Studio

Source:
On the Internet http://www.ew.com/ew/article/0,,278254,00.html

POWER 101
'Ransom' Notes
In terms of cooking the books, studio accountants could give Emeril Lagasse a run for his bammed-up money. Here's how one film grossed $308.9 million worldwide, but still lost money. The 1996 thriller Ransom arrived with a high-power pedigree: star Mel Gibson, director Ron Howard, and producer Brian Grazer. But it was no match for Hollywood accounting. According to a final participation statement obtained by EW*, Disney claims to be more than $100 million in debt on a film that grossed $308.9 million worldwide. Heavy hitters like Gibson, Howard, and Grazer negotiated gross percentages of any money the studio took in from the opening weekend, but less powerful players only got net profits -- dispensed after the studio breaks even. A Disney accountant wrote to one Ransom net participant in June 1998, ''We are not projecting that you will be paid any profit participations for this picture.'' (A Disney spokeswoman says, ''The participants were accounted to exactly and appropriately according to the deal they negotiated.'')

Here's who really got held for Ransom:

WALT DISNEY PICTURES PARTICIPATION STATEMENT PERIOD ENDED MARCH 31, 1998

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