Court documents and other papers obtained by The Times on Saturday attempt to explain how Paramount Pictures' Eddie Murphy comedy "Coming to America" sold more than $350 million worth of tickets to moviegoers around the world without turning a profit.
The papers show that the bulk of the studio's $151 million share of box office receipts has been written off to the cost of producing, marketing and distributing the movie, and to contractual obligations to share receipts from the gross income. They also detail such items as Murphy's $5,000-a-week living allowance, a $4,920-a-week motor home and a $235 petty cash expense for a breakfast for his entourage at a New York McDonald's.
Murphy, who received a personal salary of $8 million for "Coming to America," also received 15% of the film rentals. According to the documents, Eddie Murphy Productions has been paid more than $13 million.
A state appellate court Friday ordered the opening of 13 key financial documents that remained sealed at Paramount's request throughout its recent legal battle with columnist Art Buchwald. The 64-year-old Pulitzer Prize winner successfully proved in a courtroom showdown that ended in January that his original 1983 story "King for a Day" served as the basis for the 1988 movie.
Buchwald and his co-plaintiff, producer Alain Bernheim, won a 19% share of the net profits of "Coming to America," but Paramount executives testified during the two-week trial that there are no net profits nor are there likely to be any time soon.
Part of the reason, according to the documents obtained by The Times, is the priority system for profit sharing set out in the contracts the studio negotiated. Although Paramount receives 35% of the film rentals as a distribution fee, that amount--as much as $50 million--is not considered income for the film itself and is not shared with profit participants.
Murphy's early contracts with the studio during the making of such hits as "48 HRS" and "Trading Places" show that he, like Buchwald, Bernheim and others without large bargaining power, had been a net profit participant. In a deposition he gave to Buchwald's attorneys last fall, Murphy scorned net profit percentages, calling them "monkey points" because they are essentially worthless.
The actor has renegotiated his contract with Paramount at least four times in eight years, according to court documents, and ceased accepting net profit points as part of his compensation in 1984.
By the time he made "Coming to America," he was sharing in gross receipts. His $8-million up-front salary on the film was nearly 10 times the $900,000 paid out to the rest of the principals in the cast--including Murphy sidekick Arsenio Hall and actor James Earl Jones, according to the court papers.
Director John Landis received a $600,000 salary and 10% of the film's gross receipts, plus many of the same benefits granted Murphy during the production.
Financial charges that Paramount absorbed during the making of "Coming to America" could become an issue in the upcoming accounting phase of the Buchwald lawsuit because many of the bills were charged off to the film's production costs, according to court documents.
Among the charges itemized in the court documents and internal memos was $5 million in limo service, food, travel, lodging, personal employees and other overhead.
Items charged on behalf of Murphy included $4,920 a week for a limo and driver; $3,792 per week for a custom motor home and full-time driver; $1,500 per week for a personal trainer; $650 per week for a valet; five production assistants at $650 per week each, and a $1,000 per week stand-in.
Per diem expenses for all those in Murphy's entourage totaled $50,400, while travel expenses for the group came to $68,000.
Petty cash items such as the $235.33 McDonald's breakfast raised eyebrows even with the film company.
"Under normal circumstances, it is customary to provide complimentary food and beverages for an actor in his trailer," executive producer Leslie Belzberg wrote Paramount production accountant Frank Bodo in an internal studio memo dated Jan. 19, 1988. "However, as you can see, these petty cash disbursements far exceed what is usually requested."
Near the end of shooting, Murphy wanted to leave the set a couple of days early while principal photography was still under way, and the studio added another $212,800 to cover the costs caused by the delay in production.
Accommodating a star to this extent is "standard in the industry," a Paramount spokesman said.
None of these expenses came out of Murphy's $8-million salary, his 15% share of gross receipts, travel and hotel expenses or his $5,000-a-week living allowance. Those costs were charged to the production. According to Belzberg's Jan. 19 memo, the total cost for Eddie Murphy Productions in the making of "Coming to America" as of that date was $13,081,711.
A hearing is scheduled Wednesday to set the agenda for auditing and other procedures in the second phase of Buchwald vs. Paramount.