Chapter 256: Playful Mischief
"$8.4 million?"
Murphy could hardly believe it. The total investment for the film was only $60 million, and the tax incentives from Australia were unexpectedly high. "How did they calculate that?"
"Do you remember the expenditure plan we made for hiring Australian workers and the intended expenses for shooting at Sydney's Fox Studios?" Cara-Fest, knowing Murphy was unfamiliar with these details, explained in the simplest way possible, "And the entire filming and expenditure plan in Australia."
"Right," Murphy nodded. "I've seen it, a very detailed and rigorous plan."
He had been directly involved in drafting many aspects of these documents.
"The simplest calculation method," Cara-Fest tried to explain succinctly, "in Australia, for film companies and projects that meet the policy criteria and shoot locally, the highest refundable tax rate can reach forty percent. 20th Century Fox has cooperated with the Australian government for many years, including investing in building the Fox Studios in Sydney, which qualifies as such a film company."
Seeing Murphy about to ask another question, she quickly added, "I'm not talking about forty percent of the total production cost of the film. It's forty percent of the total amount spent on hiring personnel in Australia and all other expenditures."
Murphy understood, nodding. If it were forty percent of the film's production cost, that would be exaggerated, and the Australian government isn't just throwing money away.
"Do we already have the money?" Murphy asked again. "That was fast. Don't we have to wait until filming is complete?"
"Normally, we wouldn't get it until after we've finished shooting in Australia. That's when the tax rebate funds would be disbursed," Cara-Fest revealed some surprising news. "But I and the company sold this tax incentive to a local telecommunications company in Sydney and have already received $7.5 million in cash."
That's possible? Murphy realized he was completely unaware of the game rules among the major studios.
After struggling in the independent film scene, he thought he understood Hollywood well enough. But stepping into the mainstream commercial film circuit showed him he was still a novice.
On the flight back to Los Angeles, Murphy consulted with Cara-Fest extensively. Although she was also new to the Hollywood scene, her position allowed her a deeper understanding of the game rules among the major studios.
If she didn't grasp these intricacies, how could she compete with executives like Dave Scolla?
The incentives "Deadpool" received in Australia were largely thanks to 20th Century Fox's platform. To attract foreign film production investment to the Australian market, the Australian Film International Cooperation Agency and the Australian government launched a "Film Production Incentive Scheme," offering a series of tax incentives for approved projects. These could refund up to forty percent of qualified film project expenditures in Australia, subject to approval by the Australian Content Committee.
During her time in Australia, Cara-Fest was mainly busy with this work.
According to Cara-Fest, such tax incentives for "Deadpool" weren't unusual among the major studios, with many overseas countries and some US states offering incentives that could reach up to thirty percent of production costs to attract big-budget films from the major studios.
This is an astonishing ratio.
However, like "Deadpool's" tax-free amount and the funds Cara-Fest obtained, if one doesn't want to wait until project completion to reinvest this money as part of the financing, additional steps are required.
Since 20th Century Fox wouldn't need to pay taxes to the Australian government for this project, according to the regulations, this tax exemption could be sold to local businesses through a third-party brokerage, which would take a two percent commission.
The local company purchasing this tax benefit, the telecommunications enterprise, would only pay ninety percent of the tax exemption value. The remaining ten percent difference becomes their tax credit.
Overall, this arrangement benefits everyone involved, and the Australian government wouldn't promote such policies if they weren't advantageous to local development.
Thus, the funds Cara-Fest obtained became what's known as tax credit financing, one of the many financing methods in mainstream Hollywood commercial filmmaking.
Of course, this isn't the mainstream method. Each country's film tax incentives are limited, often becoming a target for competition among many companies. Even powerful entities like the major Hollywood studios, with their extensive networks, still have projects that don't receive tax incentives.
Without Cara-Fest's efforts, "Deadpool" wouldn't have received these incentives, and as a consequence, another project, "Alien vs. Predator," became one of 20th Century Fox's projects not enjoying the tax benefits.
People always have their biases, especially individuals like Murphy and Cara-Fest, whose decisions aren't based on fairness or justice but rather on the closeness of their relationships.
Returning to Los Angeles, Murphy took a day's rest before diving back into the preparations for "Deadpool."
First, he reviewed the cast for some minor roles confirmed by Seth Rogen's auditions. In most films, the actors playing background characters or those with few lines are not crucial. The selection of these actors is generally based on personal appearance, recommendations, and the cost of their fees.
"Deadpool" was no exception. After reviewing the list and audition tapes, Murphy signed off on the actor selections and handed them over to Cara-Fest for final approval.
For documents Murphy signed, as long as they didn't involve significant funds, Cara-Fest generally approved them.
Then, he communicated with Robert Downey Jr., Jessica Alba, Dwayne Johnson, and Gina Carano, mainly to check on their progress and that of their stunt doubles.
Like all Hollywood action films, high-risk scenes are performed by stunt doubles. Even if the actors wish to perform these stunts themselves, Murphy and the production team wouldn't allow it.
If a stunt double gets injured, it's merely a matter of compensation and finding a replacement. But if a leading actor gets injured, it's not just money that's wasted but also valuable time.
Although 20th Century Fox hadn't finalized the film's release date, Murphy's plan suggested it wouldn't be later than next summer's blockbuster season.
Given several big-budget films hadn't announced their release dates yet, 20th Century Fox wasn't in a hurry. In their view, a film like "Deadpool" needed a carefully chosen release window to avoid clashing with other major productions, which would impact its performance.
Another task for Murphy was approving Deadpool's costume design.
Led by Jack Watson, the costume design team captured the essence of the comic book character, creating a superhero outfit unique to Deadpool characterized by its flirtatious and coquettish appeal, blending playfulness and cheeky charm.
After finalizing Deadpool's look, Murphy immediately arranged for the production's photographers to take promotional materials of Robert Downey Jr. and instructed Cara-Fest to contact 20th Century Fox for media releases, aiming for widespread coverage across print, television, and online media.
Deadpool's box office success and critical acclaim owed much to its innovative marketing. While social media platforms like blogs couldn't match future levels of ubiquitous presence, traditional media remained influential, and utilizing it could compensate for the lack of social media reach.
Especially since blogs had gained significant influence online post-9/11.
The production team dedicated to promoting "Deadpool" had already launched a blog for the film, with Robert Downey Jr. also maintaining a personal blog.
After officially finalizing Deadpool's look, both blogs
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