Actors started saying that we don't want to take any paise from producers before start of the production but they want share in profits.
Mahesh could be making Rs. 50 crores as his remuneration for acting in Sarileru Neekevvaru as per the trade reports. Natural Star Nani made similar agreements for Jersey, Nani's Gangleader and V, say sources.
Pawan Kalyan is reportedly asking for similar deal and Vijay Devarakonda might join the action say some sources close to him. For RRR, Rajamouli and Ram Charan along with Jr. NTR took shares in profits as remuneration say reports.
Now, Trivikram Srinivas who became regular director of Haarika & Hassine Creations took a stake in production company to continue it as his home banner say trade reports. Allu Arjun asked for profit sharing and insisted Geetha Arts as a namesake partner just for completing the deal legally, say sources before signing Ala Vaikuntapurramuloo.
The reports have surfaced that Sukumar after making Rangasthalam, biggest hit film in TFI after Baahubali movies, asked for a share in profits before signing AA20 deal with Mythri Movie Makers.
If everyone starts asking for a share from profits, then will the producer really make a profit to give a share? Actors are asking for digital rights, satellite rights and rights of few areas in distribution to release films through their close associates and friends, as their remuneration.
Directors are reportedly asking for 15-20 crores remuneration and such fat checks will deposit for sure in their bank if they ask for rights or share in profits.
Say budget of a film is 75 crores and producer planned to sell the movie for minimum 80 crores and maximum, for article sake, say 100 crores. To generate 75 crores amount to produce the film, a producer has to depend on market, banks and financiers.
Each one will give money only when they get assurances like financial assets or if a person accepts for high interest rates with wealthy persons as mediators.
So, how will these 80-100 crores come to a producer's account? When producer sells distribution rights, satellite, audio and digital rights. If movie is successful remake rights in different languages.
If a producer sells a movie outright to distributors then the share amount will all go to the distributor and producer won't get any share in Share Guarantees, Minimum Guarantees and third party exhibitors advances & local area distributor payments towards rights.
Box Office sites might say everything should be included in calculating collections of a movie but if MG or SG is collected by distributor from an area then they don't get any share from additional amount collected. Producer too won't make any money from additionals or overflows, unless he is a distributor or made an agreement about the profits and margins.
With profit sharing in action, may be producer doesn't have to run helter sketler for arranging fat checks as remunerations but he will be forced to sell rights of films at high prices as if he is auctioning the film distribution rights. It is already happening from last decade in TFI.
Distributors and exhibitors are scared to death these days after facing huge losses. So, if some new distributor is offering high price then they are able bag the film but when the gamble fails, they are walking out of Industry. This way, inviting new members for each film is getting difficult to producers.
Henceforth, old and senior distributors are asking for producers to share the burden with them. This is earning only advances to producers and their real profits are coming only from digital, dubbing, remake, audio and satellite rights.
With profit sharing, taking our early example, producer will end up with either deficit or a nominal profit of Rs. 2-5 Crores after making a 75 crore budget film and selling it for 80-100 crores.
Who is really profiting from this? What if actors, writers and directors are asked to go for loss sharing further, will they be encouraging it too?
Note: Don't take our article as an attack or rant but please look at it as a reflection of truth. We don't intend to offend anyone!