Author: Abhishek Parasrampuria, Chief Financial Correspondent

I’m sure you’re all aware of the ‘Casting Couch’ along with other notorious practices which form a part of the daily currency required to gain entry into the glittering streets of Hollywood. The general opinion seems to be that directors and talent agents wield all the power, authority and influence in Los Angeles and hence must be pleased or pleasured for a successful break.

But perhaps on this one occasion Gordon Gekko is right and greed, for lack of a better word, is good.

For money often determines the outcome, popularity and visibility of a movie; the fact that we were forced to watch, tolerate and stomach three instalments of ‘The Expendables’ is proof of this fact.

However, revenue is also determining the content of movies. The recent numbers released by the Motion Picture Association of America (MPAA) disclose that almost 70% of the box office revenue may indeed come from international markets. Overseas ticket sales are becoming a major factor in determining whether or not studio-executives is willing to breathe life into a movie.

The bad part is how this defiles the body, soul and message a movie was originally supposed to disseminate. Actors are often chosen not according to their ability, but whether they have a stronghold or empathise with the markets producers’ wish to target. Iron Man 3, one of the most awaited films in recent times, had extra scenes and characters when released in the Chinese markets. Chinese box office revenues grow by double digits every year and perhaps this could be a reason the thriller ‘Red Dawn’ had to replace Chinese Villains by North Koreans, to my uttermost dismay.

Now, I have nothing against the Chinese nor is Kim Jong-Un my next of kin, however, changing the plot, actors and the basic content of a film simply to remain popular in regions which could be a potential source of revenue seems to be a highly corrosive practice. These are but the very obvious alterations made in blockbusters, who knows the thousands of subtle changes which have been implemented in the not so popular movies and TV shows we all love so much.

This is not all. In film Finance the cash flows generated over time (approximately 10 years for movies and 20 for TV shows) are used to repay investors; with the principal sources of revenue being box office releases, DVD sales and television/network screening. However, due to the importance of time value of money, the present value of these future cash flows have to be calculated, which is often a difficult task owing to the uncertainty of this industry in general. A return on investment of 30% or up is expected by investors due to the heavy risk they undertake, with more often than not, is substantial. Moreover companies that earlier provided insurance against failure to generate revenues, no longer do so as the complexity and competition in film making is reaching unforeseeable levels.

In such a scenario independent financiers have become quite popular, people with enough wealth to fund the entire budget. An example is Megan Ellison, daughter of Oracle co-founder Larry Ellison, who wrote a check for $45 million to finance Zero Dark Thirty, and played a part in covering the budgets of $21 million for Lawless and $40 million for ‘The Master.’ This is leading to increasing power in the hands of a few individuals, which as history proves it has not always been overly healthy, and this too is where the casting couch comes in.

To my regret my sources in this regard are Tabloids and Celebrity gossip magazines obsessed with shows such as ‘Keeping up with the Kardashians’ but more than a few have pointed out to the direct correlation between a personal relationship with large financiers and subsequent appearance in the projects they fund. Again, as I have no hard proof I will not be taking names but a five minute search on the internet could lead you to the article you’re looking for or the image you’re hoping to find.

But not all Hollywood movies are influenced by financing, ironically enough it was one of the most scandalous movies of our times that managed to retain its original content despite mounting pressure from Studio Executives, production houses and financiers to tone down.

In my very biased opinion if Hollywood is Mount Olympus then certainly Leonardo DiCaprio is Zeus (not Tom Hardy, not Tom Hanks and certainly not Tom Cruise), which he proved by his approach and attitude towards the making of ‘The Wolf on Wall Street.’ Rights to Jordan Belfort’s book were bought in 2006, when he was fresh out of Prison and decided that ‘Marty and Leo’ were qualified enough to make a film of his story in a deal based at Warner Bros. However, Scorsese wanted Paramount to co-finance, which Warner Bros didn’t exactly appreciate. That could be one of the reasons we had to wait seven years to see the shenanigans of Belfort and his pack on screen. Fresh controversy arose when Red Granite, which contributed $100 million to the financing of ‘The Wolf on Wall Street’ was sued for racketeering. I shall not go into the finer details but Riza Aziz (stepson of the Malaysian Prime Minister) and Joey McFarland the two principals of Red Granite, seemed to have accumulated these funds through illegal means which they used to finance Wold of Wall Street and the sequel of Dumb and Dumber. Not too surprisingly, Riza Aziz wasn’t up for an award for best picture in the Academy Awards despite his role in financing $100 million and despite the influence his personal wealth could buy. Ignoring all allegations and accusations the movie went ahead with its original plot, making the proud statement that not all studios and directors had to bow and scrap to the growing influence of money.

Hence, I feel there’s hope for Hollywood even if it’s ‘The Wolf on Wall Street’ that is providing it.