Back-End
Back-end refers to a film's profit from theater ticket sales, video rentals, and ancillary markets.
Usage
There are many ways that actors, directors and producers may be compensated for their work on a film. Often they receive a combination of up front salaries and back-end percentages or “points.” Sometimes, instead of being paid in advance, they opt to take the gamble of back-end deals in which they receive a percentage of the film’s total revenue after release. The back-end may either be calculated as gross sales or as net (subtracting the total studio investment in the film).
When a film has a lower budget, but is attempting to attract talent, a good back-end deal is one way to accomplish its goal. An actor or director may decide to take the plunge because of the possible profits if the film is a hit.
Examples
Big name celebrities with clout are able to negotiate powerful back-end deals. One example of this is on the Paramount film, War of the Worlds, where director Steven Spielberg and actor Tom Cruise received no up front salaries at all. They shared instead 17.5% of the gross profits from the film, with an increased percentage once the studio made back its initial investment in the film. Of course, not everyone is Spielberg or Cruise, and usually it is hard for anyone to collect any back-end points because of the creative accounting on the part of the studios.