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Net Profit Participation Statement
Reconstructed from Reporting on the Original Statement · For Illustrative & Archival Purposes
This is not a copy of the original document, which this archive has not seen directly. It is a reconstruction built strictly from the figures, percentages, and line items that Deadline's Mike Fleming Jr. and subsequent reporting confirmed were present in the actual leaked statement.[1] Every numbered figure below carries a footnote identifying its source. Where the original statement's exact internal structure is unknown, this reconstruction uses the standard net-profit deduction sequence documented in Buchwald v. Paramount and subsequent industry reporting,[2] applied to the confirmed top-line and bottom-line figures. Nothing below should be read as a verbatim reproduction of Warner Bros.' actual paperwork.
I. Revenue
| Worldwide Theatrical Gross Receipts | $938,200,000 | [3] |
| TOTAL GROSS RECEIPTS | $938,200,000 |
II. Distribution & Marketing Deductions
| Distribution Fee (34% of Gross Receipts) | $319,000,000 | [4] |
| Prints & Advertising / Marketing Spend | $200,000,000– |
[5] |
| SUBTOTAL: DISTRIBUTION & MARKETING | ~$520,000,000 |
III. Production & Financing Deductions
| Negative Cost (Production Budget) | ~$150,000,000– |
[6] |
| Pre-Production Advance to Production Entity | $315,000,000+ | [7] |
| Interest on Negative Cost & Advance (~18% effective rate, ~2 yrs.) | $57,000,000– |
[8] |
| SUBTOTAL: PRODUCTION & FINANCING | ~$522,000,000– |
IV. Final Accounting
| Total Gross Receipts | $938,200,000 | |
| Less: Total Deductions (Sections II & III) | ~$1,042,000,000– |
|
| NET PARTICIPANT PROFIT (LOSS) | $167,300,000 | [9] |
No Payment Due
Archive Note
The reconstructed deduction subtotals above (Sections II and III) do not sum precisely to the confirmed $167.3 million reported loss, because several of the original statement's exact internal figures — the precise negative cost, the precise marketing spend — were not disclosed in Fleming's reporting or subsequent coverage, only described in ranges or by category. This is the honest limit of reconstruction from secondhand reporting rather than the source document itself. What is not in question, across every account of this statement reviewed for this piece, is the three figures that matter most: a gross receipts figure approaching a billion dollars, a reported loss of $167.3 million, and an effective interest rate, on the studio's own numbers, that more than one entertainment attorney who reviewed the statement called indefensible by ordinary lending standards.[10]
Footnotes & Sourcing
[1]Mike Fleming Jr., "STUDIO SHAME! Even Harry Potter Pic Loses Money Because Of Warner Bros' Phony Baloney Net Profit Accounting," Deadline, July 2010 — the original report containing the leaked statement and Fleming's analysis.
[2]Buchwald v. Paramount Pictures Corp., Cal. Superior Court Phase II accounting findings (1990), and subsequent industry reporting (e.g. Deadline's 2020 "Yesterday" net profit statement analysis) establishing the standard sequence of distribution fee, marketing spend, negative cost, and interest as the conventional net-profit deduction structure.
[3]Worldwide gross of $938.2 million as reported in Fleming's original 2010 Deadline piece. A 2011 Deadline retrospective ("Harry Potter Inc: Warner Bros' $21B Empire") cites a slightly higher figure of $942 million-plus for the same film; this reconstruction uses the original 2010 figure as the one tied directly to the leaked statement.
[4]The 34% distribution fee is quoted directly from reader/industry commentary on the original Deadline piece, which characterized it as "a little high but within the usual distribution fee range." Dollar figure calculated from this rate against the confirmed gross; not an independently confirmed dollar amount from the original statement.
[5]Marketing/P&A spend range is this reconstruction's estimate based on industry commentary describing a "$200m spend for P&A" as plausible for a film of this scale; the precise figure in the original statement is not confirmed in available reporting.
[6]Negative cost range reflects publicly reported production budget estimates for this film; not confirmed as the exact figure used in the original net-profit statement.
[7]The $315 million-plus pre-production advance figure comes from reader commentary on the original 2010 Deadline piece, posted in 2011, asserting this figure as the primary driver of the reported loss. This is commentary on the leaked statement, not a quotation from the statement's own text as published by Fleming.
[8]The approximately 18% effective interest rate and the $57–60 million interest charge are drawn from Fleming's original reporting and reader commentary calling the rate "completely out of line," noting that a typical shareholder loan rate accepted by tax agencies runs closer to prime plus 1%.
[9]The $167.3 million reported loss figure (cited as "$167 million-plus" in the original 2010 piece and refined to "$167.3 million" in Deadline's own 2020 follow-up reporting on a separate film's statement) is the single most consistently confirmed figure across all sourcing reviewed for this piece.
[10]Characterization of attorney and agent reactions drawn from Fleming's original reporting: "I ran the data above by several attorneys and agents, who are so accustomed to seeing studio accounting wave magic pencils over hit movies that they weren't surprised."
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