brian myers issued
Disney’s recent financial disclosures revealed that the company spent more on its latest film, Ant-Man, than it did at the box office, despite its eye-popping budget. On the surface, this event appears to be frustrating for studio staff, but there is more to the loss than meets the eye. The company was able to take advantage of incentives given to studios by the UK government, resulting in a net profit of less than US$90,000.
didn’t lose money
Ant-Man and the Wasp: Quantumania Released last February, the film is far from the box office smash that previous films in the Marvel Cinematic Universe have proven to be, weighed down by a huge budget, disappointing villains, and VFX scandal. It was something. The film grossed just over $476 million in ticket sales, and production studio Disney was entitled to half of that. However, given the film’s production costs, this cut meant that Mickey Mouse and company stood for a loss of $92.05 million.
Movie studios usually hide their profits and losses in the overall budget, which includes other films. Being able to avoid budget breakdowns for certain films makes each effort look a little better, even when a studio might be sitting on a box office bomb. The studio’s decision to shoot in England meant two different things for the company. That is full legal disclosure of the entire budget as required by UK law, as well as a cash refund.
Saved by UK tax credits
When Disney chose to film its latest film, Ant-Man, domestically, it was forced to submit financial statements that included disclosures that included everything about the budget, from materials costs to staff salaries. These financial statements show that Disney received $327 million in revenue and an additional $2.8 million in miscellaneous income. Total costs were calculated at $388 million, with a pre-tax loss of more than $58 million.
However, the tax credits that the UK gave studios were enough for Ant-Man’s studio to make some money. The government reimbursed Disney up to 25.5 percent of the amount it actually spent domestically, resulting in a credit of $58,281,661. By the time analysts reached the finish line, the budget numbers reflected Disney’s net income of $88,236.
Government wants transparency
To be eligible for reimbursement, at least 10 per cent of the total production cost had to be spent in the UK. Movie studios will be able to set up additional film production companies in the country and provide financial clarity. This separate company is “responsible for pre-production, principal photography, post-production” and must also be responsible for the final edited version delivered.
These refunds can be quite large, so the UK government is forcing studios who want to take advantage of the tax credit to show all their cards. Even if it’s a big company like Disney Photography. antman Budget rules apply across the board to all, including small studios shooting sequels and independent feature films. Profitable films are refunded as a credit for unpaid taxes, while unsuccessful films are refunded in cash for the funds spent on making the film.
