Anthony McCarten, a London based novelist and playwright, is known for Darkest Hour and The Theory of Everything. He also wrote the screenplay for Bohemian Rhapsody and hasn’t received full payment for it, since he was told the movie lost $51 mill.

Bohemian Rhapsody, tells the story about Queen frontman Freddie Mercury, and took about $900 mill in the box office and only cost about $55 mill to make. So how did it make a loss?

The movie was distributed and co-produced by 20th Century Fox, and it is alleged that McCarten is the victim of ‘studio accounting’. It is saying that Fox used accounting gimmicks to avoid paying.

McCarten is suing GK Films, the production company that developed the movie, and with whom he had signed the contract. The suit claims that McCarthen is owed 5% of the film’s net proceeds, but Fox has improperly substituted its own definition of the term ‘net’. The suit states:

“If net proceeds don’t pay out on a low-budget film that does nearly a billion dollars at the box office, then they never will.”

GK Films, led by producer Graham King, is an independent company with a track record of financing major movies, like Gangs of New York and Hugo. According to the complaint, the company has a reputation for offering lower upfront rates in exchange for a more favourable definition of backend profits.

The suit claims that there was a low fee that was given to McCarthen for writing the movie, and he called one of the executives at GK Films, Denis O’Sullivan, who told him:

“The number is what it is, but Graham (King) wants me to tell you that as he did with Cameron Diaz on Gangs of New York, he will take care of you in success.”

The complaint states that GK Films definition of net proceeds would resemble the movie’s actual net proceeds and would not be subject to traditional big studio accounting, which would erase any apparent profits by tacking on fees.

McCarten had received two accounting statements from Fox. The first, in April 2019, claimed that the movie had lost $105 mill, which the second, in July 2021, claimed it had only lost $51 mill.

That is some creative accounting. A movie costs $50 mill to make, makes $900 mill in the box office, but still makes a loss! I need these accountants to help with my tax return.

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