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Dilwale's BO 150cr, Distributor Right [MG] - 130cr, D.S 70-75cr & Dis. Loss is around 55-60cr, Srk refund 25cr to Dist. - Financial Express

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* Sp. Note from artical - Srk Fear that distributors getting first right of refusal for his next home production release Raees due to huge loss in Dilwale. [Fan is produced & distributed by Yrf]
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* Here full Artical -


* Shahrukh Khan has refunded close to Rs 25 cr to cover up 50% loss to distributors asking them to bear the rest.
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* If that wasn't all, sources close to the actor and his production mention that Shahrukh Khan has in fact, prima facie also consented to these distributors getting first right of refusal for his next release Raees.

* Shahrukh Khan starrer Dilwale box office collections were big at around Rs 150 crore, but not big enough.
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* The Rohit Shetty directed film Dilwale, which released in December, 2015 that also featured Kajol, Varun Dhawan and Kriti Sanon, was produced by Red Chillies and Rohit Shetty Productions, but despite presence of Shahrukh Khan and huge promotions the film did not perform as expected at the box office.
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* However, now months after its release we hear that Shahrukh Khan, whose production Red Chillies took over the distribution of the film in India, has decided to compensate individual distributors to a certain extent for the losses incurred with refunds.

* In fact back in 2001 and 2005, Shahrukh Khan had refunded the individual distributors of his films Asoka (Eros) and Paheli (UTV), after both films underperformed at the box office.
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* As a direct result of the actor's 2001 film Asoka underperforming at the box office, Shah Rukh's subsequent release Chalte Chalte was sold for a much lower price.
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* On similar lines after the failure of Paheli, distributors of Shahrukh Khan's next venture Om Shaanti Om were given first right of refusal to acquire the film.


* Recently admitting Dilwale's underperformance at a press conference Shahrukh Khan had said, "I don't think the film has done as well as it should have. I am personally disappointed with that", well now the actor has decided on reimbursing 50% of the losses incurred by the distributors.
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* However, the interesting part here is that as of last count Dilwale had done approx. Rs 150 cr net business in India and Rs 174 cr gross in the overseas markets, while the satellite rights were sold for Rs 70 cr to Sony MSM. [OMG ! 70cr still unbelievable] Music rights of the film were sold to Sony for Rs 18 cr. With the sale of these rights Shahrukh Khan quite literally made a killing on the project earning close to Rs 150  crore as profit!

* Shahrukh Khan had set a domestic distribution target with a minimum guarantee (MG) of Rs 130 cr
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* but since Dilwale box office collections were around Rs 150 cr at the India B.O., the distributors share would have amounted to approx. Rs 70 cr to 75 cr which meant a loss of around 55 cr to 60 cr cumulatively for the individual distributors pan India.
http://www.financialexpress.com/photos/business-gallery/209429/shahrukh-khans-dilwale-box-office-collections-at-rs-150-crore-but-distributors-log-losses-actor-offers-refund/
asked Feb 10, 2016 in Movie Discussions by Rocsky Unit Manager (31,697 points)
24% Accept Rate

edited Feb 10, 2016 by Rocsky

2 Answers

+1 vote
 
Best answer

At least he is compensating them where other stars just see their own benefit..
Even Rajani Anna cheated the distributors...
" Don sirf apna swarth nahi dekhta, usse apno ki bhi utni hi chinta hoti hain jitani khudki ".
It's like flood have come everyone is trying to save their own life but srk will look after every other cobuddys and star like Aamir will try to make single seat boat even if he get double seat boat he will use it for his own benefit only.....
Humanity jinda hain bhai.....

answered Feb 10, 2016 by Boxofficemaan Assistant Director (43,558 points)
selected Mar 4, 2016 by Rocsky
+4 votes

You got the note wrong... Srk has not feared, infact he has agreed to give the distributors the first right of refusal for Raees.
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Right of first refusal (ROFR or RFR) is a contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transaction with a third party.
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It means also hints that Raees might be once again distributed by RCE only. And first right of refusal will give distributors the first exclusive right to purchase the film directly from the producers. If the distributors are happy with the product then they'll buy the rights otherwise they'll REFUSE which is what Right for first Refusal actually means. Then the movie's rights can be sold to a third party (like Eros or UTV) which then will release the film.
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So Srk has not just paid 50% of losses but also has given those specific distributors a direct chance to purchase or not purchase Raees distribution rights. This move will create some goodwill because distributors will think they've been given freedom to buy either Raees or Sultan. With YRF backing Sultan, the distributors whom YRF don't favor will choose RCE's Raees. And also this will make some distributors to act loyal to RCE afterall the losses have been re-imbursed.
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Lastly, Srk is not scared of "first right of refusal". As per the article, he has willingly offered that right to the distributors.

answered Feb 10, 2016 by suhas Mega Star (248,367 points)

Didnt got ur First right of refusal. I read it 2 times but still didnt got connected. Can u explain in easy way like aam janta can understand with some examples...
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1) You said specific distributors got a direct chance to purchase or not purchase Raees distribution rights. - What does this means? If they didnt purchase then where Raees will go ? I mean who wil purchase then . Confused
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2) You said With YRF backing Sultan, the distributors whom YRF don't favor will choose RCE's Raees.- But YRF has strong distribution thing since years so 90% owners wil opt for YRF due to loyality since years. Now remaining 10% owners will choose Raees . So whats this ? No equality na ? Confused.
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Bas answer these 2 bro

Specific distributors as in those distributors who got their losses refunded by RCE. "If they didnt purchase then where Raees will go".. If they don't buy then some other distributor will get the chance. YRF is a distribution house too so there'll be enough distributors ready to compete with it provided a good product is in hand. They did compete with SOS in 2012, plus this time the other product has Srk in it. If no distributor buys then RCE might release it themselves. Also considering this right of first refusal implemented I feel RCE wants to release Raees by themselves like Dilwale.
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These 90% & 10% is way too hypothetical.. Did SOS get only 10% buyers? YRF has a strong upperhand in getting the screens, which is understandable. But here the opposite party is no weak either. It is still 50-50, and if YRF continues to dominate then 60-40... Beyond that, RCE or Excel are not that weak to let YRF win in terms of getting the screens that easily...
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Simple terms,
You're the producer of Raees & I'm the distributor for Dilwale who faced loss... You want to sell the movie & have set individual distributor price for Rajasthan at 10cr. You can't sell the movie's rights to any other distributor just like that. Because according to right of first refusal agreement I get that chance or to say you should first approach me or let me approach you. If I like the product I'll buy it by negotiating the price in case if I don't want to purchase at 10cr. If I don't like the product or negotiation fails then it's me who has to "Refuse" to buy Raees & only then you can contact other distributors to buy Raees. If you approach any other distributor first without giving me the chance then it's breach of contract & I can sue you for losses. Ofcourse there are enough law points to even save the producer from getting sued.
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Anyways if the competition is intense & everyone wants to play dirty. Then YRF can pull of one trick by getting the Dilwale distributors to stall through negotiation process & in the end refusing to purchase Raees forcing the producers to release the film themselves or get a bit stressed at the last minute finding distributors who might demand lower price. In that period YRF can book more screens. Ofcourse this one of the possibilities.. If RCE & Excel wants to play dirty they can continue to manipulate the distributors in many other ways, since YRF will wait until FAN to pre-book screens for Raees.

thankyou this explanation was VERY helpfull

thanks for the info Suhas bro

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