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Imagine if you are a major star in the top ten league.

Someone like, say, Shah Rukh Khan, Hrithik Roshan, Amitabh Bachchan, Govinda, Ajay Devgan, Sunny Deol or a few others.

Your asking price per film is the equivalent of at least one full territory.
So, for instance, if your new film is being sold for Rs 2 crores per territory, your minimum price is at least Rs 2 crores.

PART I: Why stars dodge taxes PART II: Passing the parcel PART IV: Howdunnit

But let's say you think you're a superstar, that your name alone guarantees magic at the box office. You feel you deserve more than just that fair share. So you demand more than the price of one territory.

The response, almost always, will be No Way.

Or, to put it more diplomatically, "Bhaisaab, if you think you can earn more per territory than the best distributors in the biz, why don't you distribute it yourself!"

That is apparently what one wise (or not-so wise) producer is said to have remarked to Amitabh Bachchan in his heyday. Bachchan was flush with the success of his early hits and felt he deserved a larger share of the pie than he was getting.

In a way, he wasn't entirely wrong in demanding an increase. Back in those days, the film biz was almost entirely cash-and-carry and it was routine for producers and distributors to declare ridiculous incomes that were less than ten per cent of their earnings.

So when this particular producer made this retort to Bachchansaab, he got a bright idea. Why not distribute the film himself? That way he would earn whatever the film actually earned -- which, in those days, as I mentioned, usually meant ten times what it was said to have earned officially.

Amitabh did, indeed, demand a whole territory as the price for the film in question. The film turned out to be a blockbuster. And his earnings went up so massively, he knew that he would never again be content with just receiving an actor's 'salary' again.

Legend has it that this is how and where film stars first began to spread their financial wings and demand bigger sums. It's only fit that the crorepati himself was the one to first ask and answer the question Kaun Banega Crorepati -- main banoonga!"

Even today, while Bachchan's KBC earnings are rapidly freeing him of his huge debts caused by the debacle of ABCL, he and his family live in a bungalow which was given to him as part of his fee for acting in Satte Pe Satta.

At that time, the bungalow probably cost a tenth of what it did now. Had he taken cash, there's little doubt that it would not have multiplied tenfold in the intervening fifteen-odd years. Few people realise how astute a financial man the Big B really is.

From those small beginnings, a new trend began. Film stars began to demand territories instead of cash payments. That way they would stand to earn more if their films became hits.

Shah Rukh Khan rose from financial obscurity to multiple-crorepati status in five short years through this approach. Word has it that he refuses to sign a film with certain producers only because they refuse to grant him distribution rights.

And as stars became aware of their real earnings per territory, they began to demand more per film. Until now, one hears, Hrithik Roshan is being offered Rs 6 crores per territory and that amount is expected to increase if Mission Kashmir is a hit.


While all those in the top ten are earning well over Rs 2 crores per film.

This trend has pushed up the production cost of a film several dozen times. Today, the average Hindi film with major stars, director, music director, choreographer, lyricist, costs around Rs 25 crores to produce. Over 70 per cent of that amount goes to these individual professionals. Which means that less than 30 per cent of the budget is actually spent on production.

This is in contrast with Hollywood, where a blockbuster can cost as much as US $ 100 million-plus, with only US $ 30 million or so going to the stars and director (the music director etc, are obviously not present!), which leaves 70 per cent to be spent on what you see on that screen.

No wonder, then, that Hollywood films remain the pinnacle of cinematic achievement in the movie world today. While our films depend on star power to bring in the crowds.

And no wonder that with film stars raking in all those extra crores of rupees, there's no incentive to spend more on the other areas of film production that matter. From special effects to set design to costumes to script, it's all just paani in the dudh. And the malai is the star, who takes the cream of the profits.

PART I: Why stars dodge taxes
PART II: Passing the parcel
PART IV: Howdunnit