Disney spent $100 million more than recent estimates recommend to make Indiana Jones and the Dial of Destiny, according to the film’s production company’s financial statements.
Dial of Destiny was released at the end of June last year and stars Harrison Ford as an elderly adventurer in search of an ancient artifact before it falls into the hands of the Nazis. The film, the fifth installment in the Indiana Jones franchise, caused a typhoon since its $384 million box office is much lower than that of its predecessors when adjusted for inflation.
This came at a high cost, as the film’s long scenes showed an aging Ford that resembled the one he had in his heyday when he played the character in the 1980s. The eerily realistic effects were developed through the Industrial Light division.
In a recent report, industry name Deadline attempted to address this factor and concluded that Dial of Destiny lost $143 million. In reality, it may have been much more than that, as Deadline’s estimate of $300 million in its production prices is conservative. The least.
Movie budgets are a well-kept secret, as studios tend to absorb the cost of each film into their overhead and not detail the cost of each one. However, movies shot in the UK are exceptions to this rule and Dial of Destiny was one of them.
Although Dial of Destiny is largely set in the United States, it was filmed at Pinewood Studios outside London and in Europe and North Africa. London’s Hatton Garden Jewel district also served as New York City, and Glasgow, Scotland, the site. of a parade in 1969 celebrating the return of the Apollo 11 astronauts.
Records for the film in Scotland show that the film runners and hostesses who worked on the set of Dial of Destiny in Glasgow were hired through a corporation called PLT Productions (UK). Its registration in the Register of British Companies shows that it belongs to LFL Productions. , a division of Lucasmovie bought through Disney for $4 billion in 2012. This explains why the corporate record says Disney owns LFL Productions.
It is understood that PLT Productions (UK) owes its call to the Phoenix Little Theatre and for good reason. In 1964, the Phoenix Little Theatre hosted the premiere of Firelight, the first film directed by Steven Spielberg, who directed the first 4 Indiana Jones films. The production company’s codename Dial of Destiny prevented it from attracting the attention of enthusiasts when it implemented permits to shoot on location. The UK wasn’t just selected for filming because of its striking landscapes.
Studios filming in the UK take advantage of the government’s AV credit, which allows them to pay back up to 25. 5% of the money they spend in the UK in cash.
To qualify for the refund, screens will need to pass a problem check based on points such as how much of the production took place in the UK, whether the score was recorded in the UK, and how many lead actors and production crews are from the UK. UNITED KINGDOM. .
With that in mind, it’s perhaps no surprise that Ford joined Dial of Destiny via Brits Phoebe Waller-Bridge and Tothrough Jones. Points are even awarded if the characters played by the main actors live in the UK, which can also happen. one of the strangest recent decisions in a Disney production. This saw American super spy Nick Fury live in the UK in last year’s Marvel Studios streaming series Secret Invasion, which also received a generous refund, as we revealed.
It is imperative that in order to get a refund of up to 25. 5% of the film’s expenses in the UK, at least 10% of the basic production prices have to be similar to the activities there. To prove this according to the British government, the studios created a separate film production company (FPC) for each film. That’s why Dial of Destiny was made through PLT Productions.
UK law states that each FPC will have to be at fault for everything from “pre-production, principal photography and post-production of the film, as well as the delivery of the finished film. “The FPC “directly negotiates contracts and will pay for rights, goods, and facilities similar to the film. “It’s unimaginable that studios would hide their prices from other companies, as the law also states that “there can only be one FPC consistent with the film. “
The financing procedure differs from film to film, but sometimes follows a similar trend that starts from the start of production and can be seen in the graph below.
How the UK’s film tax credit system works
The starting point is for the studio to buy a script from a screenwriter and greenlight a movie about him. If the studio was going to make the film in the UK, it set up a subsidiary there that bought the rights to the script.
The acquisition of the rights to the script provides the British company with the rights to the film it is making. This company will have to take care of the pre-production and principal photography until post-production, the delivery of the finished film and the payment of similar expenses. goods and services. Then comes a bit of monetary magic.
If the British company makes a profit, the government’s monetary advantages translate into a reduction in its tax bill. However, if you suffer a loss, you get a refund of money in the form of a tax credit, so studios fund corporations in a way that fixes this.
The studio bought the rights to the film from the British company, but only gave it 74. 5% of the planned production cost. The remaining 25. 5% is provided by the studio in the form of a loan. This provides the British company with one hundred percent of the cost of production. production budget of the film and sets the level of money refund.
Loans are not considered profits for accounting purposes as they will need to be repaid. The British company thus suffered a loss equivalent to 25. 5% of the film’s budget. It was then that the British government intervened by reimbursing this loss. The repayment is equivalent to the loan the company owes its parent, the cash can be returned to the studio as payment and voila, the British government covers 25. 5% of the price of a film.
UK production corporations are required to publicly record monetary statements, which lifts the veil on the exact charge of making the films. Records show everything from staff and salaries to coin reimbursement. The coins that the studio will pay for the rights to the film are presented as a source of income in the financial statements of the British company and, above all, its expenses constitute the total cost of the film.
The photographs below show the production prices for Dial of Destiny from the start of pre-production until the end of April last year. The prices are denominated in British pounds and in total £306. 7 million, as we revealed. Converting the total to U. S. dollars the exchange rate in effect at the time of writing this article affects $387. 2 million, however, if the exchange rate to date of each set of monetary statements is used, it affects $402. 3 million, which is $102. 3 million more than the required term.
Reflecting UK law, the financial statements verify that PLT Productions’ core business is “film production” and that all of its paintings are in production, as shown on the following pages.
Indiana Jones and Dial of Destiny Financial Statements
Since Disney acquired the rights to Dial of Destiny from PLT Productions, it receives its share of the box office and will pay the cast and waste to the actors, which, according to Deadline, is $36 million. It also imposes a value of $60 million in overhead and interest. similar to the film’s financing. Often, studios get a loan (which earns interest) to finance the acquisition of the rights but, again, this does not constitute a charge to the production company, so it is not a production charge.
The same goes for marketing. Since the studio owns the rights to the film and sells it to theaters, it will pay for printing and advertising to advertise it. Deadline claims that $120 million was spent on this and it possibly wouldn’t be fair or not. One of the highest prices in any department of a company is studio advertising staff and crews working on multiple films, sometimes simultaneously. As a result, it’s not always possible to characterize their prices for expressing photographs, and even if staff isn’t the largest position in the impressions and ads category, it shows that the total can only be theoretical.
On the other hand, UK corporations have a legal responsibility to ensure the accuracy of their documents. That’s why there’s no doubt that Deadline’s production prices for Dial of Destiny are $100 million lower. There is no need to estimate producer prices when a studio submits legally binding documents disclosing them. Their percentage of the box is another story.
The amount theaters pay studios is known in the industry as rental fees and differs by territory and even by movie. Documents filed through the AMC theater chain state that “rental rates are based on each film’s box office performance, in some cases and less frequently, our rental rates are based on a constant, mutually agreed-upon rate.
“In some European territories, movie rental rates are set on a weekly basis and some licensees use a profit-sharing agreement consistent with it, paying a fixed payment per ticket. “
However, it would not be representative to base the percentage of the global box office on the knowledge of a single film chain, as they all have other degrees of exposure in other markets.
A global indication comes from film industry representative Stephen Follows, who surveyed 1,235 film professionals in 2014 and concluded that, according to studies, cinemas retain an average of 49% of revenue. This lends weight to a typical 50-50 split that would give Disney Dial of Destiny’s $192 million worth is based on its revenue, according to box industry analyst Mojo.
A $64. 3 million (£57. 7 million) reimbursement from the British government brought the film’s net expense to $338 million, resulting in a net box office loss of $146 million. These quantities can only be speculative, since producer prices are contained in official documents, so it would be necessary to make other estimates.
This glitch could have more effects on Deadline’s production cost estimates for other films, but it’s not possible to say at this point because its most recent financial statements have yet to be filed. By contrast, Dial of Destiny’s most recent effects cover the generation. up to two months before the release of the film and thus give an almost complete picture of the cost of production. Given that it failed to generate box office profits, this is far from a satisfying ending.
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