From commanding a premium price to profit sharing Bollywood over the years have seem to seen it all. And now this trend appears to be transcending to the South based film industry which is currently basking in the glory of oscar win by the film RRR. Both the actors Jr.NTR and Ram Charan are believed to have raked up their prices by 100% to anywhere between Rs 60-100 crore and now are also looking at sharing the profit anywhere between 50-80%, as per industry sources. “There are multiple formulas that work right from sharing profit to actors producing their films. There is no one size that fits all and same is the case here. For instances, SRK also produces his films besides working for the likes of YRF and Dharma. No one knows what kind of deals one has been able to ink,” Vikramaditya Motwane, filmmaker-producer and screenwriter, told BrandWagon Online.
About six-seven years ago actors such as Akshay Kumar, Salman Khan, Shah Rukh Khan would typically charge anywhere between 50-80% share of the profit earned by a movie, apart from a flat upfront fee. What this meant was if a film earned about Rs 100-150 crore, the A-lister actor would take home 50-80% of the profit apart from the fee. While the mechanism works wonderfully in case where a film box office collection ranges between Rs 500-600 crore, as the actor then can walk away with about Rs120-150 crore. This leaves ample room for everyone to earn. However, the scene can turn ugly, in case of films which tanks at the box office. In this case, while the film production company suffers losses while the actor still gets paid. “This process of sharing profits along with up-front fee started with an aim to block dates of actors for a quick turn around. As a result, the risk resided with production houses. This was a lop-sided model. A more fiscally prudent way to work would be to stop paying any up-front fee,” Vikram Malhotra, founder and CEO, Abundantia Entertainment, explained.
Post the win by RRR at the Oscars, according to industry estimates, the brand value of actors Jr NTR and Ram Charan have upped by 100%. Both charge around the same price which is anywhere from between Rs 30-50 crore per movie. In fact, Charan had charged about Rs 45 crore for RRR. Interestingly, the scene is similar with Jr.NTR who has charged about Rs 45 crore for RRR. Prior to this, he would charge about Rs 12 crore per film. According to industry experts the value chain works differently down South. So far the investment from large corporations (MNCs) have been restricted to Hindi film industry, but with the advent of over-the-top (OTT) platforms, the scenario has changed. According to Malhotra, for the first time international production films have begun to invest in the Southern region.
Over the years in Bollywood now A-lister actors own their production firms from Shah Rukh Khan who owns Red Chillies Productions to Akshay Kumar who owns Cape of Good Films, earlier known as Hari Om Entertainment Co. As a result these actors now co-produce films in partnership with large film production firms. However, a set of critics opine that a profit sharing model may work in case of few actors. “I believe that an actor is the USP of a film and if he/she demands profits from the earnings of the film then it is a healthy practice. If the budget is viable then definitely the actors should grab a share of the profits earned by the film,” Taran Adarsh, film trade analyst, said.
