(1973) Tags: Warner Bros
Ira N. Smith and Sydell Smith v. Commissioner
This is a tax dispute case involving the investors who acquired the US/Canada distribution rights to the 1973 cult classic ‘The Wicker Man’ starring Christopher Lee. The case from the tax court lists the actual budget, terms of a distribution agreement and the tax write off that the investors recorded. Below is a brief breakdown of the expenses related to ‘The Wicker Man’:
The budget for ‘The Wicker Man’ was $1,411,987.50
The United States and Canadian distribution purchase price for the movie consisted of a check in the amount of $280,000 and a nonrecourse promissory note in the principal amount of $1,520,000.
On December 11, 1973, a distribution agreement was entered with National General Pictures Corporation. The term of the agreement was 12 years. The agreement provided that National was to release the movie commercially as soon as practicable in 1974. The agreement also provided that the distributor would manufacture 100 prints of the movie and that not less than $100,000 would be expended for advertising the movie during 1974. The distributor was to pay 30 percent of the first $1,000,000 of gross receipts; 35 percent of gross receipts in excess of $1,000,000 up to receipts of $1,300,000; 40 percent of gross receipts in excess of $1,300,000; and 50 percent of gross receipts in excess of $1,500,000. The distributor was to pay all costs of distribution including costs of prints and advertising out of its share of gross receipts. The distributor went out of business in early 1974 and did not release ‘The Wicker Man’.
Read the full court report below for more information ‘The Wicker Man’.