'Straight Outta Compton' Boosts To Warner Bros.

Warner Bros. may have lost Straight Outta Compton to Universal, but there’s a silver lining: Sources say it will earn at least $5 million — and possibly millions more — from its share of the movie.

The studio is one of several net profit participants — including producers Ice Cube and Dr. Dre, who also stand to make multiple millions after forgoing their up-front fees. (There are no "first-dollar" or "gross" participants.)
How the net profits are defined, of course, is crucial. Insiders believe Warners gets its money at "cash break zero" — that is, when production and marketing costs have been covered, without factoring in Universal’s 10 percent to 12 percent distribution fee.
Let’s assume the movie crosses $300 million worldwide (though nobody is predicting where it will top out). Roughly half of that goes back to Universal in "rentals" — that is, $150 million.
The studio then peels off $29 million in production costs, plus an estimated $60 million for marketing, leaving a net profit of around $61 million. With roughly 5 percent of the pie, Warners makes more than $3 million from theatrical revenue.
But that’s not all. The studio also gets a cut of home entertainment, pay and broadcast TV — which could double or even triple its take. (Historically, theatrical profit was estimated to be around one-third of the total; recently it has inched up to almost half.) That means it could make another $3 million to $6 million, and more if Compton continues to surge at the box office.