Box Office Bonuses: While back end points are based on a percentage of the profits, box office bonuses are usually a flat rate, based upon Daily Variety’s weekly box office chart. They work as follows: If your film earns $1 million dollars in the box office as per Daily Variety, then you will get a $10,000. Then, for every additional $1 million the film earns, you will get an additional $10,000. These bumps are negotiable, and vary in how much the bonuses are and how often, and often the producers will try to put a cap, so that the actor stops earning any bonuses after $50 million. The reason why box office bonuses are attractive for talent are that they are easily verifiable. There are no auditing statements to look at, no accounting to do, you can simply open the trade and see when you should start bugging your agent to get you your check.
Back End Compensation v. Box Office Bonuses: Depending upon the success of the film, the size of the budget and the drafting of the profit definitions, sometimes it is better to have profit participation over box offices bonuses or vice versa. You can imagine that even when a film does very well, if the film had a high promotional budget, or if a star was taking a big chunk up front, it would take longer for the film to earn profits, as the investors get paid in full before anyone can earn their profit participation revenues. It is not uncommon for a film to do very in the box office but barely break even because it was so expensive to make. Not to say this is all guesswork, and an experienced attorney and/or producer would be able to advise you regarding the likelihood of what the film can make. Sometimes, an actor will get both back end and box office bonuses, and then they don’t have to predict, they are covered on both aspects.
Please note: The information contained herein does not constitute legal advice and is intended for educational and information purposes only.