CALIFORNIA
Check out the new California section
Business

$78 million of red ink?

FinanceDVDs and MoviesEntertainmentMoviesBusinessRentalsBudgets and Budgeting

ON an old studio lot outside London, a production crew began work on the movie "Sahara" in November 2003 by staging the crash of a vintage airplane.

But when the film opened in theaters in April 2005, the sequence had been deleted. "In the context of the movie, it didn't work," said director Breck Eisner.

The cost of the 46-second clip: more than $2 million.

This kind of spending, according to accounting records, helped turn "Sahara" into one of the biggest financial flops in Hollywood history.

The documents, obtained by The Times, provide a rare behind-the-curtain peek at the thousands of expenditures that drain the budget of a major motion picture. The line items cover such things as "local bribes" within the Kingdom of Morocco and the salaries and "star perks" paid to Matthew McConaughey and Penelope Cruz.

Movie budgets are one of the last remaining secrets in the entertainment business, typically known to only high-level executives, senior producers and accountants.

"The studios guard that information very, very carefully," said Phil Hacker, a senior partner in a Century City accounting firm that audits motion pictures. "It is a gossip industry. Everyone wants to know what everyone else is getting paid."

The records offer insights into the economics of modern-day moviemaking and industry practices that seldom are disclosed. Some examples:

•  "Sahara," an action-adventure based on the bestselling novel by Clive Cussler, has lost about $105 million to date, according to a finance executive assigned to the movie. But records show the film losing $78.3 million based on Hollywood accounting methods that count projected revenue ($202.9 million in this case) over a 10-year period.

•  About 1,000 cast and crew members worked on "Sahara." The highest-paid was McConaughey, who received an $8-million fee, or $615,385 for each week of filming, not including bonuses and other compensation. Cruz earned $1.6 million. Rainn Wilson, who since has raised his profile through roles in "Six Feet Under" and "The Office," was paid $45,000 for 10 weeks of work.

•  "Courtesy payments," "gratuities" and "local bribes" totaling $237,386 were passed out on locations in Morocco to expedite filming. A $40,688 payment to stop a river improvement project and $23,250 for "Political/Mayoral support" may have run afoul of U.S. law, experts say.

•  Ten screenwriters were paid $3.8 million in fees and bonuses — highlighting the increasingly common practice of hiring and firing numerous writers on big-budget features. David S. Ward, who won an Academy Award for "The Sting," received $500,000.

•  The production firm owned by Denver billionaire Philip Anschutz got $20.4 million in government incentives to film and edit parts of "Sahara" in Europe.

Unlike most financial failures, "Sahara" performed reasonably well, ranking No. 1 after its opening weekend and generating $122 million in gross box-office sales. But the movie was saddled with exorbitant costs, including a $160-million production and $81.1 million in distribution expenses.

The financial documents obtained by The Times were submitted as "confidential" exhibits in an ongoing Los Angeles jury trial.

Cussler initially sued, claiming that Anschutz's producers reneged on his $10-million contract by failing to honor his right to approve the script. Anschutz countersued, alleging that Cussler exaggerated sales of "Sahara" and other Dirk Pitt adventure books and that he refused to promote the film, hurting attendance. Both sides seek millions of dollars in damages.

"I'm floored that these documents could have been provided by someone, despite the fact that there is a clear agreement within the litigation ensuring that they are confidential," said Marvin Putnam, an Anschutz attorney. "They have been provided in clear breach of that agreement."

The records consist of a 151-page final budget, a profit-and-loss statement, a distribution agreement with Paramount Pictures and a six-year analysis of financial transactions.

Although portions of the movie were shot in Britain and Spain, most of the filming was done in Morocco, a country in North Africa that has become a popular site for U.S. filmmakers. "Babel," "Syriana," "Black Hawk Down" and "Kingdom of Heaven" all have benefited from Morocco's welcoming environment, favorable exchange rate and cheap labor.

An "assistant propman" on "Sahara," for example, earned a weekly salary of $233, the equivalent of one day's pay for a U.S. prop worker.

In one impoverished village, a "Sahara" crew acquired household items at a bargain price. "We actually bought all the dressings from this person's house at a very inflated rate, which was probably about a dollar," Eisner said on the "Sahara" DVD.

Producers had little reason to worry about red tape or paperwork because in Morocco a single permit provides access to the entire kingdom.

Cold cash came in handy. According to Account No. 3,600 of the "Sahara" budget, 16 "gratuity" or "courtesy" payments were made throughout Morocco. Six of the expenditures were "local bribes" in the amount of 65,000 dirham, or $7,559.

Experts in Hollywood accounting could not recall ever seeing a line item in a movie budget described as a bribe.

"It's a bad choice of words in a document, but it's a perfectly normal and cost-efficient way of getting a film made in a place like Morocco," said David A. Davis of FMV Opinions Inc., a Century City financial advisory firm.

The final budget shows that "local bribes" were handed out in remote locations such as Ouirgane in the Atlas Mountains, Merzouga and Rissani. One payment was made to expedite the removal of palm trees from an old French fort called Ouled Zahra, said a person close to the production who requested anonymity.

Other items include $23,250 for "Political/Mayoral support" in Erfoud and $40,688 "to halt river improvement project" in Azemmour. The latter payment was made to delay construction of a government sewage system that would have interrupted filming.

Putnam, Anschutz's lawyer, said the "local bribes" reflected line items that were budgeted but not actually spent. He said the payments on location in Morocco were reviewed after "Sahara" executives were contacted by The Times.

"The review of all of the ledgers failed to show a single expenditure that wasn't completely legitimate," Putnam said.

The Foreign Corrupt Practices Act prohibits U.S. companies from paying any foreign official to secure an "improper advantage" or influence a decision. The act permits small "grease" or facilitation payments for routine services such as the provision of visas, licenses and permits.

The "local bribes" probably would fall under the "grease" exemption because of the routine nature of the payments, said Alexandra Wrage, president of TRACE, an anti-bribery business association in Annapolis, Md.

But the political payment and the fee to delay the sewage project were more troubling, Wrage said. "If they paid a government official, that sounds like buying a business advantage, which is a violation of U.S. law."

Despite efforts to contain expenses by filming abroad, "Sahara's" production costs quickly soared from an initial budget of $80 million to more than $100 million largely because of myriad problems locking in a script.

Anschutz said in a deposition that he never set a limit on production costs but became "concerned" as they climbed to $160 million.

"What I wanted to do is make a good film," he said, adding: "At the end, we spent, in my view, too much money."


glenn.bunting@latimes.comTimes researcher Maloy Moore contributed to this report.*(INFOBOX BELOW)When commercial interests and artistic integrity clash

MOVIE executives routinely refuse to talk about their agreements to insert consumer products into films in exchange for hefty fees from advertisers, although they insist that commercial interests never take priority over artistic integrity.

But with "Sahara," some creative decisions apparently took promotional considerations into account. For example, producer Karen Baldwin demanded script changes to accommodate DaimlerChrysler because the German-American carmaker negotiated to have its Jeep trucks featured in the film. "You can't have the truck get almost stuck," Baldwin wrote in a March 2004 e-mail to "Sahara" executives. "I would bet that Jeep will have a heart attack when they see that. They want to show how well the Jeep handles and responds — not that it will get stuck in a tough situation."

Four months earlier, when director Breck Eisner expressed concern during development of the film about problems with another sequence involving a four-wheel-drive truck, Baldwin wrote in a memo, "Can't cut it. Jeep to pay 3 million."

The automaker entered into a partnership with the film's distributor, Paramount Pictures, for promotional tie-ins and an advertising campaign featuring its Jeep Wrangler Unlimited.

Eisner also suggested eliminating a bar scene featuring tequila because "it doesn't really work anymore." Baldwin again balked: "Need the tequila and beer scenes at some point as it means a lot of dollars (2 million from Souza and 3 from Heineken)."

The bar scenes eventually were cut for creative reasons, according to a person close to the production who spoke on the condition of anonymity. This person said that several companies backed out of product placement commitments in 2004 after "Sahara" novelist Clive Cussler filed a lawsuit against the production company seeking to stop the movie from appearing in theaters.

*

(INFOBOX BELOW)

Spending freely to give the thrill of a chase -- on water

A complex boat chase in "Sahara" features Matthew McConaughey doing his best James Bond impression. He performs daredevil maneuvers, dodges machine gun bullets and leaps out of a fast-moving craft seconds before it erupts in a fiery explosion.

The water sequence lasts only seven minutes, but it didn't come cheap. It was filmed at two locations in Morocco and one in Spain. Producers paid $915,415 for two high-powered boats and $548,162 for two gunboats. They paid $131,950 to build the shell of another vessel that would be blown up on-screen. The four boats were later resold for $803,049. The producers also transported military watercraft from Britain and rented a helicopter at a cost of $28,314 a week to capture aerial footage.

Much of the movie's weaponry — the "Sahara" budget allocated $288,285 for boat guns, automatic weapons, grenade launchers and 44,000 rounds of ammunition — was used in the chase scene.

Advance production personnel, a marine unit and stunt players needed several weeks to choreograph the chase. The scene took a cast and crew of several hundred three weeks to shoot. Fifteen camera and sound workers squeezed onto the speedboat carrying McConaughey.

One of the boats ran over and destroyed an expensive camera lens, which was replaced by the movie's insurance carrier.

*

Aquatic pursuit

Five boats...$1.6 million

Boat captains and crew...$231,495

Stunt players...$211,120

Boat fuel...$173,700Site rental fees...$60,231

Set construction...$38,785

*

(INFOBOX BELOW)

Why the credits don't say no animals were harmed

ONE of the most dangerous scenes in the filming of "Sahara" involved a stunt man jumping off the backs of racing camels onto a moving train. The sequence was complicated by the refusal of the Malian mammals to run long distances.

"You have to keep hitting it and kicking it to keep it going," director Breck Eisner said on the "Sahara" DVD. It's "a very physical thing."

Although the actual jumps were performed by a trained camel master, there was no independent safety officer on hand during the filming of "Sahara" to monitor the treatment of more than 100 camels, horses, donkeys and other animals. That's because producers of the $160-million movie opted not to pay a $30 hourly rate plus travel and other expenses, said Karen Rosa, director of the American Humane Assn.'s film and television unit. As a result, the film's credits could not include a statement certifying that "no animals were harmed" in the making of the movie. "Sahara" executives said they were not required to use the American Humane Assn. because the production was based in Britain. "No animals were injured during the shooting of the film, and professional animal trainers were used," one executive said about "Sahara." He declined to be identified.

The animal-welfare organization assigns safety officers at no cost to about 900 U.S. films annually. "We've learned after doing this for 67 years," Rosa said, "that you need to be there to know the level of care the animals receive."

*

Animals and handlers

Camels...$81,375

Riders and grooms...$79,748

Horses...$71,610

Stabling and transport...$53,989

Horse and camel master...$51,638Veterinarian...$9,184

*

(INFOBOX BELOW)

How the stars divvied up the treasure

Matthew McConaughey and Penelope Cruz were romantically linked on the set of "Sahara," but their pay was anything but close. Here are how they and costar Steve Zahn joined the cast, as well as how much they made and their "star perks."

Matthew McConaughey

Although studio executives pursued Tom Cruise, Hugh Jackman, Christian Bale and other A-listers to play Dirk Pitt, Matthew McConaughey lobbied "Sahara" novelist Clive Cussler and pestered producers for the part.

"I always said I was looking for a character that could wrestle with crocodiles in the morning and dance with the queen at the ball that night," McConaughey, 37, said on a "Sahara" DVD commentary. "That kind of renaissance man [is] Dirk Pitt."

McConaughey's persistence paid off. He received an $8-million actor's fee and $833,923 in what the budget called "star perks." His company was paid $250,000 for his role as an executive producer. And his contract provided potential box-office bonuses and royalties from merchandising, video game and soundtrack revenues.

All for about 90 days of filming in Morocco, England and Spain.

---

Salary: $8 million Perks: $833,923

Entourage travel

$179,262

Makeup artist

$150,223

Stunt double

$124,740

Assistant

$114,000

Colorist

$72,800

Trainer

$67,977

Personal chef

$48,893

Stand-in

$33,869

Security

$29,296

Gym room at hotel

$3,488

Other

$9,375

---

Penelope Cruz

For years, author Clive Cussler wanted Salma Hayek to play Eva Rojas, a World Health Organization doctor, in the movie adaptation of his book.

"She was Hispanic, Eva Rojas was Hispanic," Cussler said in a deposition. "Salma was a very good actor, and she certainly had knock-out looks."

But producers chose Penelope Cruz for a reason beyond her glamour or talent. "Using Penelope means we have significantly more money to spend on the screen," producer Karen Baldwin said in an internal e-mail. That's because hiring the Spanish actress (Hayek is Mexican) helped "Sahara" qualify for $20.4 million in cash incentives to film in Europe.

Cruz, 32, played the love interest of Dirk Pitt and became romantically linked with her costar, Matthew McConaughey. But her $1.6-million salary came nowhere near his. Cruz's "star perks" included two dialogue coaches and six Moroccan security guards working 12-hour shifts.

---

Salary: $1.6 million Perks: $835,561

Entourage travel

$227,515

Hairstylist

$135,550

Makeup artist

$135,550

Dialogue coaches

$125,804

Security

$80,562

Stunt double

$64,371

Costume dresser

$22,235

Assistant

$18,480

Stand-in

$12,670

Other

$12,824

---

Steve Zahn

The producers of "Sahara" wanted to cast Jack Black as Al Giordino, the wisecracking sidekick to Dirk Pitt. But Black passed, producer Karen Baldwin testified. "If he had to choose between schlepping around the desert for three months or sitting on his sofa eating popcorn and watching TV, he was going to be sitting on his sofa," she recalled.

So Steve Zahn, 39, accepted $2.2 million plus a $300,000 option and $264,153 in "star perks," including two fitness trainers. Zahn's 10-page contract called for first-class round-trip airfare to Morocco, business airfare for his wife, two children and nanny, and coach tickets for his personal assistant.

While filming overseas, Zahn had to be given a "first-class bump-out trailer with first-class amenities," a private dressing room, an exclusive car and driver and a rental car for his wife and nanny.

Zahn also had a free cellphone, along with rights to purchase wardrobe items at 50% off.

---

Salary: $2.2 million Perks: $264,153

Entourage travel

$71,219

Stunt double

$92,701

Stand-in

$33,869

Security

$29,296

Assistant

$19,000

Car and driver

$9,573

Gym/trainer

$5,000

Car rental

$1,585

Cellphone

$1,000

Internet

$910

*

(INFOBOX BELOW)

Everything under the sun

The final production budget of the 2005 action-adventure film "Sahara" provides a rare glimpse into Hollywood economics. Documents obtained by The Times reveal how thousands of expenditures added up to twice the movie's original budget of $80 million. The line items include such expenses as a $10-million contract for author Clive Cussler and $12,600 for diving equipment.

---

Final production budget: $160 million

---

General expenses:

$24.4 million

- Insurance: $5.4 million

- Publicity: $131,723

---

Sets and property:

$24.1 million

- Set construction: $5.8 million

- Wardrobe: $2.3 million

- Makeup: $795,880

---

Transportation

and location costs:

$20.1 million

- Hotels $3 million

- Customs fees $1.1 million

---

Cast and extras:

$18.9 million

- Matthew McConaughey: $8 million

- Steve Zahn: $2.2 million

- Penelope Cruz: $1.6 million

- William H. Macy: $750,000

- Rainn Wilson: $45,000

- Extras (4,020): $402,569

- Other: $5.9 million

---

Story and rights:

$14.1 million

- Clive Cussler: $10 million

- Writers: $3.8 million

---

Shooting units:

$13.6 million

- Marine unit: $3.9 million

- Aerial unit: $1.2 million

- Dive equipment: $12,600

---

Production units:

$13 million

- Staff: $3.9 million

- Accountants: $1.6 million

---

Postproduction:

$10.3 million

---

Special effects:

$7.3 million

---

Other:

$14.3 million

---

Source: "Sahara" final budget

Graphics reporting by Maloy Moore

*

(INFOBOX BELOW)

The bottom line

The "Sahara" ledger, based on financial projections through 2015. The actual loss on the film was about $105 million through 2006.

Revenue

$202.9 million

Net box office...$79.5 millionHome video...$68.8 million

Pay television...$16.5 million

Network television...$9.5 million

British subsidy...$20.4 million

Other...$8.2 million---

Expenses

$281.2 million

Production...$160 million

Prints and advertising...$61.0 million

Home video...$21.9 million

Distribution fee...$20.1 million

Other...$18.2 million---

Net loss

$78.3 million

*

(INFOBOX BELOW)

Off-camera pay

Compensation for the "Sahara" crew varied widely. Below are some of the people who toiled on the movie, how much money they were allocated in the budget, and the length of time, if noted in the budget, that they were expected to work.

Producer Mace Neufeld

$1.8 million

Producer Stephanie Austin

$1 million

Composer Clint Mansell

$800,000

Production designer Allan Cameron

44 weeks

$779,688

Director Breck Eisner

$750,000

Financial controller Andy Hennigan

64 weeks

$416,416

Film editor Andrew MacRitchie

41 weeks

$335,665

Costume designer Anna Sheppard

38 weeks

$269,800

Marine coordinator Lance Julian

32 weeks

$244,200

Art director Giles Masters

41 weeks

$224,040

Key makeup artist Aileen Seaton

24 weeks

$180,710

Set decorator Anna Pinnock

30 weeks

$141,159

Gaffer Lee Walters

27 weeks

$106,889

Key grip Gary Hutchings

24 weeks

$91,646

Aerial cameraman John Marzano

7 weeks

$84,466

Script supervisor Jean Bourne

17 weeks

$81,653

Publicist Susan D'Arcy

19 weeks

$76,440

Boom operator Paul Munro

19 weeks

$65,546

Wardrobe mistress Cristina Sopeña

12 weeks

$30,329

*

(INFOBOX BELOW)

Incidentals

The budget of a major feature film lists a wide variety of expenditures. For "Sahara" they included such items as prop skeletons and a gully sucker, which is used to empty the tanks of portable restrooms.

Catered meals

$1.4 million

First-aid technicians

$615,044

Train

$348,750

Pyrotechnic equipment

$200,200

Faux solar panels

$152,425

Bottled water (Morocco)

$105,556

Walkie-talkies

$102,884

Facial disease special effect

$54,600

Music rights (per song)

$50,000

Cleaning and laundry

$43,850

Gully sucker

$38,748

Skeletons

$16,744

*

About this package

This report is based on the final budget of "Sahara." Actual expenses may have varied from budgeted items. It was written by Glenn F. Bunting and researched by Maloy Moore.

Copyright © 2014, Los Angeles Times
Comments
Loading