What do you get when a film costs $7.5 million to make then rakes in $180 million in global box office? You get "Crash"- an Oscar winner. But today, there's also a "cash crash" as the actors and director want more cash.
Four months after "Crash" won the Oscar for Best Picture, director Paul Haggis is still waiting to be paid. So is Sandra Bullock, Matt Dillon, Don Cheadle and a handful of other principals in front of and behind the camera. All agreed to defer their salaries in exchange for a share of the film's profits.
"Whenever there's a lot of money involved, particularly in the entertainment business, people don't necessarily have a great incentive to let go of it and pay it to the creative folks,” said Michael Sherman, an entertainment attorney with Jeffer, Mangels, Butler & Marmaro.
Studios and producers routinely use profit sharing deals to lure bigname talent to a small budget project. But they're often unwilling to share the profits, or even admit that they exist.
Writer art buchwald proved that in his 8-year legal battle with Paramount Pictures over the 1988 hit "Coming to America." More recent disputes over the TV series "Frasier" and the 2003 Oscar-winning film "Chicago" have also gone to court.
"Certainly the more money a film makes, the more is at stakes and the more likely there are to be inquiries into whether the accounting has been done correctly and properly," said Jay Dougherty a professor at Loyola Law School.
"Crash" was produced on a shoestring budget and went on to generate $180 million in worldwide box office and home video receipts. The complex foreign financing behind the film is said to be the main reason it's taking so long to cut checks for profit participants. It also doesn't help that the film's multiple producers are in a legal battle over credits. But it's unlikely the dispute over profit sharing will wind up in court.
"There are very good reasons to settle these matters,” said Jay Cooper, an entertianment attorney at Greenberg Traurig. “One is uncertainty of a trial and two is the cost."
Despite the potential headaches, profit sharing deals are here to stay in Hollywood because most of the time they help save money for the studios -- and make money for talent. "Crash" just seems to be one of those accidents that can happen.
