Paying people with "back end" money, has been a fairly consistent practice since practically the beginning of film. The idea is that the studio can save money up front, and what the end up paying is based on the film’s success. That way, a bomb won’t cost them much, and a blockbuster will have plenty of cash to spread around. The problem comes when a studio claims that a movie didn’t make any money - even when that idea defies reason. Such is the case for Goodfellas as Warner Bros. claims the classic mob tale ended in the red. Irwin Winkler, a producer on the film, is suing because he doesn’t believe that’s true.
Winker was the producer behind Raging Bull and The Right Suff among a host of other classics, and according to The Hollywood Reporter, Winkler is entitled to 50 percent of Goodfellas net profits. It cost $30 million to make, and brought in $275 million at the box office. The math seems fairly simple, right? Not so much. Warner Bros. has claimed that Goodfellas actually lost money.
According to Winkler, he didn’t discover just how much out of whack the numbers actually were until 2014 - which is why we’re only hearing about it now. Winkler’s complaint says that while WB claims that the film only brought in $32 million in home video sales, the number was actually $128 million. Apparently by listing the home video profit under the subsidiary, Warner Home Video, as opposed to Warner Brothers Entertainment, the numbers didn’t fall into the right column. Winkler claims Warner actively concealed a total of $140 million of the movie’s profits. Warners, for their part, calls the accusations "baseless" and they promise to defend against them.
Movie studios have become somewhat notorious over the years for what appears to be creative accounting. Warner Bros., for example, has previously claimed that Harry Potter and the Order of the Phoenix also lost money (despite making nearly $1 billion at the global box office). Peter Jackson has also had to sue New Line Cinema in order to receive what he believed was his appropriate share of profits for the Lord of the Rings movies. Apparently Winkler’s contract with Warner goes back to 1981, but was still valid in 1990 when Goodfellas was released.
If Winkler is correct, however, this goes beyond creative accounting. It’s one thing to have all the dollars divided up among multiple subsidiaries so that nobody can figure out how to properly add anything up. It’s quite another to simply list the wrong numbers. Winkler is alleging that much of the home video revenue is flat out wrong. According to the suit, the overseas home video dollars are underreported in every country listed.
Goodfellas won six Oscars when it was released and has gone on to become part of American culture thanks to famous scenes with Joe Pesci and Ray Liotta. It’s a little hard to believe that the movie has never turned a profit. Do they think this is funny? Like a clown?
