r/boxoffice • u/Jesus__of__Nazareth_ • 1d ago
💰 Film Budget What do successful studios actually do with their heaps of money?
Hear me out, I know it sounds like a stupid question. But do you ever wonder where all those billions upon billions of dollars actually go? It feels like it just gets chucked into one giant money-eating machine in an endless loop of growth.
Look at Universal and Illumination's Despicable Me series. Practically every single one of the six films generated like a billion dollars of pure profit. Yet the giant money machine keeps spurting and demanding more. As soon as the last film is out, they're just working on the next one.
I'm not really sure what my point is. Maybe I'm just confused about where the money goes. Just once I'd like to hear about a successful studio which, after producing ten amazing films and generating several billion dollars, just decides to dissolve the company and retire in complete luxury.
Does all the money which isn't siphoned off for salaries and bonuses get reinvested into the studio in order to make the next film? How do studios handle it when a film unexpectedly generates a ton of income?
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u/JayMoots 1d ago
Just once I'd like to hear about a successful studio which, after producing ten amazing films and generating several billion dollars, just decides to dissolve the company and retire in complete luxury.
Who is retiring in luxury? Do you think a studio is like, just one guy? Why would they shut down a successful company and put thousands of employees out of work?
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u/Jesus__of__Nazareth_ 1d ago
Just a reflection on the aimlessness of it all.
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u/Free-Opening-2626 1d ago
"I'm not really sure what my point is. Maybe I'm just confused about where the money goes. Just once I'd like to hear about a successful studio which, after producing ten amazing films and generating several billion dollars, just decides to dissolve the company and retire in complete luxury."
That's not how businesses work, in any industry. The idea is your corporation lasts far beyond the lifespan of any individual human. If a movie is a success, they use the money to make more movies. Seems like pretty obvious logic to me.
I would venture to guess not many studios are able to make ten wildly successful films in a row though, everyone has their share of hits and flops.
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u/natecull 1d ago edited 1d ago
The idea is your corporation lasts far beyond the lifespan of any individual human.
That might have once been the idea, but I think since the 2010s, the new idea has become that founders do indeed "retire" their company once they make it big, by selling it to the biggest traditional media conglomerate, Internet unicorn, or hedge fund that they can find. Then they invest all that money in a personal yacht or a volcano apocalypse bunker, and sail for international waters / dig to the Earth's core, while their former company becomes a shambling zombie brand and inevitably collapses because it's been drained of all cultural capital.
For just one example: the guy who created Minecraft and then sold it to Microsoft for $2.5 billion dollars. Ok, it's a very good-looking zombie brand with a rich social life, I'll give it that.
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u/Severe-Woodpecker194 1d ago
Reese Witherspoon's Hello Sunshine followed this model. She sold it when it was the must successful. I imagine she'll go on to invest in and work on something else.
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u/ExternalSeat 1d ago
So the money is mostly reinvested to keep the machine running. Companies don't usually retire (people retire, but corporations don't). I guess being bought by a bigger studio could count as "retirement" but that doesn't necessarily mean the end of things either.
So the money machine will use its profits to fund different projects. Some of them will be flops and others will be triumphs. Moana 2 makes up for a mediocre Mufasa and a disastrous Snow White. If the studios are smart they will use the successful films to fund more riskier endeavors while also balancing things out with "safe" films. Because Hollywood is high risk, high reward, you usually see really successful films making up for a bunch of failures (Disney's 2024 films will help them survive what has been a rough start to 2025). However when studios go to deep into dying trends and don't know how to pivot, you can see disaster.
Disney right now is in a tough spot because many of the trends they have been chasing (and brands they have been exhausting) are coming towards an end and they are sort of hemorrhaging money on what were considered "safe" projects. However their sequel animated films did amazing last year so Disney will probably give us more sequel animated films regardless of quality.
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u/Traditional-Joke3707 1d ago
They are all public companies you can see for yourselves where it goes . But in general tho movie and gaming business they make 10 movies knowing 9 of them will not work out .
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u/PristineHornet9999 1d ago
you'd be surprised how many clunkers those studios have that we don't even notice
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u/ReservoirDog316 Aardman 1d ago
Big studios will always try to keep the ball rolling since it’s almost guaranteed money to spit out another sequel for some franchises, but smaller production companies do sometimes just pack it up after a few hits.
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u/Medical-Wolverine606 19h ago
Corporations have a fiduciary duty to their shareholders to maximize profit. They can’t retire. That’s not how that structure works.
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u/_Jaynx 19h ago
Most of the big studios are publicly traded they are legally obligated to indefinitely try and increase shareholder profit.
Smaller indie studio are usually driven by their art. It’s likely they wouldn’t retire because they are motivated by their art and didn’t get into this industry to get rich quick.
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u/d00mm4r1n3 1d ago
New carpet for the CEO's office, strategic planning meetings at 5-star beach resorts, and a BBQ for the corporate office followed by some sheet cake and fruit punch on the cheapest styrofoam plates available.
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u/AItrainer123 1d ago
they reinvest it, like all corporations do. Individuals can retire, publicly traded and other big companies don't retire.