Hollywood accounting, re: Fahrenheit 9/11

[Flounder]

Paranoia for fun and profit

Relevant parts:

On the Fahrenheit 9/11 DVD, Moore says he resolved to get the film seen in America "by hook or by crook." His hook was censorship.

On May 5, 2004, the New York Times ran a front-page article headlined "Disney Is Blocking Distribution of Film That Criticizes Bush." The story included the sensational charge that Eisner "expressed particular concern that [choosing to distribute Fahrenheit 9/11] would endanger tax breaks Disney receives for its theme park, hotels and other ventures in Florida, where Mr. Bush's brother, Jeb, is governor." The source for this allegation was Moore's agent, Ari Emanuel. Two days later, Moore claimed on his Web site that Disney's board of directors rejected Fahrenheit 9/11 "last week." In fact, the Disney board had not made such a decision in 2004 -- the project had been vetoed in 2003.

I knew that allready.

What puzzled me was this:

Fahrenheit 9/11, now an event, took in more than $228 million in ticket sales worldwide, a record for a documentary, and sold 3 million DVDs, which brought in another $30 million in royalties. (...) the net receipts returned to Disney were $78 million.

Disney now had to pay Michael Moore's profit participation. Under normal circumstances, documentaries rarely, if ever, make profits (...). So, when Miramax made the deal for Fahrenheit 9/11, it allowed Moore a generous profit participation -- which turned out to be 27 percent of the film's net receipts. Disney, in honoring this deal, paid Moore a stunning $21 million. Moore never disclosed the amount of his profit participation. When asked about it, the proletarian Moore joked to reporters on a conference call, "I don't read the contracts."

What of Disney? After repaying itself $11 million for acquisition costs, it booked a $46 million net profit, which Eisner split between two subsidiaries, the Disney Foundation and Miramax. (...) The Weinstein brothers (...) had a deal with Disney that contractually entitled them to a bonus of between 30 percent and 40 percent of the net profits on any film that they produced -- in this case, that came out to about $8 million per brother. (The Weinsteins are now in the process of leaving Miramax.) But Michael Moore had perhaps the happiest ending of all. Not only had he made $21 million, he already had a sequel in preproduction -- Fahrenheit 9/11 ½.

This can't be right, can it? Would a director really be satisfied with "monkey points" -- i.e. net points? Perhaps the article writer is staying in the context of sales-dependent income. Can I assume that the director (perhaps through FAG or Lion's Gate) was paid an up-front fee -- the aquisition cost, and that if the movie was only mildly successful, that's all the money he would see? Or do these monkey points come in addition to gross points and a flat fee?