Production houses keen on sharing profits with top actors

Written by Shaheen Mansuri | Mumbai, Jun 12 | Updated: Jun 14 2008, 05:29am hrs
The latest buzz in the film industry about production houses offering a share in profits after the film is released to A grade actors can do wonders at the box-office, believe film producers. Many production houses, which are open to such a profit-sharing model between the actors and the production firm, feel that the actor will deliver results if he is also liable to a certain percentage of profits in any project. Also, if in case the film tanks at the box-office, the risk to the producer is minimised.

Sunil Manchanda, producer, MAD Films, The profit-sharing model between the producer and the actor is an international practice. It was bound to happen in India, since the actors who are in the top league feel that along with any film release, their name is also being sold he said. He further added that amongst other production houses, his firm is also open to strike a deal with actors on sharing profits after the release of the film.

A film producer, on condition of anonymity, explains the viability of offering an equity stake to the lead actor of the film. For instance, if an actor demands Rs 25 crore for a particular project, we can bring it down to Rs 15 crore and offer him an 10-15% stake post release of the film. By adopting this model, our risk bearing ratio is minimised and the actor will also try his best to monetise his property.

UTV Motion Pictures CEO, Siddharth Roy Kapur added, Though I cannot discuss the negotiations that are on with our productions house, we are open to deals for the success of our films. However, producers also feel that in India, the success of any film is star-driven, unlike in other countries where special effects and the post-production marketing gimmicks can make a film a hit.

Explaining the new trend, Mihir M Shah of broking house Prabhudas Lilladher, says that in India, success of a film is still largely dependent on the star cast. Therefore, the cost of signing in actors forms the major component of making a movie in India, unlike that in the US wherein emphasis is also given to content research and special effects. This is another reason why we see production houses in India entering into commission based fee model with some of the top actors. This also ensures maximising box-office collections for their movie.