By Brian Myers | Published
Financial disclosures released by Disney recently revealed that the mega-company’s latest Ant-Man movie’s total cost exceeded its box office despite the budget. On the surface, it looks like this turn of events may disappoint the studio brass, with more cons than cons. The company was able to take advantage of the financial incentive given to the studios by the British government, resulting in a net profit of less than $90,000 USD.
He didn’t lose money
Ant-Man and the Wasp: Quantummania debuted last February and was a far cry from what others in the Marvel Cinematic Universe have proven to be at the box office, due to a huge budget, a disappointing villain, and a VFX scandal. The film managed to gross a little over $476 million in ticket sales, of which production studio Disney was entitled to half. However, when considering the cost of making the film, this cut meant that Mickey Mouse and company were staring down the barrel of a $92.05 million loss.
Usually, a movie studio hides its profit and loss with an overall budget that includes its other movies. Being able to dodge the itemization of any particular film’s budget makes each effort look a little better, even when the studio is bombing at the box office. The studio’s decision to make the film in England meant two separate things for the company: full legal disclosure of its overall budget under British law and a cash payment.
Protected by British tax credits.
When choosing to shoot the latest Ant-Man movie in the country, Disney was forced to file financial statements that included disclosures that included everything from budgeted material costs to each crew member’s salary contribution. was Those financial filings show that Disney had $327 million in revenue, plus another $2.8 million in miscellaneous income. Total expenses were disclosed at $388 million, leading to a pre-tax loss of more than $58 million.
But, the tax credit given to the studios by the UK helped Ant-Man’s studio gain a lot. The government paid Disney up to 25.5 percent of what it actually spent in the country, giving it a credit of $58,281,661. By the time analysts got to the bottom line, the budget figures reflected a net profit of $88,236 for Disney.
Government needs transparency.
To be eligible for reimbursement, at least 10 percent of total production costs must be incurred within the United Kingdom. Film studios will set up additional film production companies within the country to show the finances. This separate company should be “responsible for pre-production, principal photography, and post-production,” as well as the final edited version to be delivered.
As this compensation can be very high, the government in the UK forces any studio wishing to take advantage of the tax credit to show all their cards. Even if it’s a big company like Disney Shooting. Ant Man Whether it’s sequels or smaller studios filming an independent feature, budget rules apply across the board. A film that turns a profit gets compensation as a credit for taxes owed, while a flop gets a cash refund for the funds spent to make the film.
