Tubelight, Jab Harry Met Sejal and other flops: Right for stars to cover the losses?

Salman, Shah Rukh and other Bollywood A-listers compensate distributors if their home productions fail. Industry analysts explain the motive behind this and the calculations that make this possible.

With A-list actors such as Shah Rukh Khan, Salman Khan, Ajay Devgn, Hrithik Roshan, Akshay Kumar, and Ranbir Kapoor turning producers, the trend of compensating distributors for a flop is also gaining ground.

Actors Shah Rukh Khan and Anushka Sharma in a still from Jab Harry Met Sejal.

When Salman Khan’s big Eid 2017 release Tubelight blinked out, the actor reportedly refunded Rs 55 crore to the distributors. In August, when Shah Rukh Kha’s Jab Harry Met Sejal bombed, distributors took their cue from Salman and demanded that SRK refund their money. Though no official confirmation came from the actor’s side on this, Shah Rukh had, in the past, returned 50% of the money to the distributors of his 2015 movie Dilwale, which also did lukewarm business.

If a film tanks, how does an actor-producer refund distributors without burning a hole in his — or her — own pocket? Trade analyst Atul Mohan explains, “Producers earn from satellite rights, whereby the movies are exclusively sold to leading channels. So, they get the money value in advance; this can start from Rs 400 crore and go up to Rs 1,000 crore. Now, even digital rights have come into the picture, with big players like Amazon and Netflix entering the game, offering the same kind of money as satellite channels for showing the films on their [online] platforms. Now, if you calculate on an average, a producer has initially already earned Rs 50-60 crore for a movie, so they’re in a position to bear the loss.”

It’s not a new practice, anyway. Filmmaker Subhash Ghai compensated distributors when his 1995 film Trimurti flopped; this ensured that he had enough buyers for his subsequent films, Pardes (1997) and Taal (1999). Raj Kapoor’s big-budget 1970 film Mera Naam Joker incurred huge losses, and he gave distributors a bigger cut when his next film, Bobby (1973), released.

According to Mohan, this trend is a “goodwill gesture” from the actors to secure their positioning in the market. “For big actors, goodwill is more important than money, as they want longer relationships and a good name in the industry. So they try to absorb the losses of the distributors at their discretion. This way, the actor-producers make sure that they keep the doors open to work with the distributors in future,” he says.

Filmmaker R. Balki agrees, saying, “Our industry isn’t the same now as it was before, and it’s going though tremendous losses (with many big-budget films flopping). So, it’s a great gesture and will definitely help form strong relationships. Filmmaking is a business, so when the distributors make huge money out of a film, they also must share it with the actor, who hasn’t charged anything for the film and I feel this balance must exist.”

However, Mohan adds that since there’s no legal liability, no distributor can claim or challenge a producer in court and ask for a refund if a film flops. While a refund mostly happens when actors are working in their own productions, a stand alone producer might refuse to follow the trend.

Calling the current model a “high-risk low-reward business”, film critic and Bollywood expert, Omar Qureshi disagrees with this entire process of returning money. “There should be a fair deal from the beginning. Stars demand flesh and bone,” he says. “And earlier, if a movie did spectacular business, the distributors shared some overflows. But today, if stars are signed on their huge draw, it’s already a risk if the rest of the content isn’t looked at. Why should a distributor get happy with a big star and not even listen to the story? Also, stars have to come down a bit on their pricing or Bollywood is spiralling downwards.”

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