The final agreement with multiplex owners will give producers a 50% share of box office takings in the first week, 42.5% in the second and 37.5% in the third, with the final week yielding 30%. The settlement also allows for a 2.5% swing either way in the event the films make above Rs17.5 crore or less than Rs10 crore. In case of the latter, the films are released with at least 500 prints.
The terms of the agreement, which are due to be formalized on Monday morning, apply to all releases regardless of budget, as well as to Hollywood films. It also gives producers and distributors the first call in terms of a release strategy.
Film-makers Bhatt, Vidhu Vinod Chopra and Yash Chopra were among the key mediators, as were actors Aamir Khan and Shah Rukh Khan, according to Deshpande, who believes that the agreement leaves the fraternity in a stronger position.
The newfound unity could serve as a platform for the industry to tackle other common issues, according to Amit Khanna, chairman of Reliance BIG Entertainment Pvt. Ltd, whose BIG Cinemas division was the first of the multiplex chains to sign the deal.
“I got involved a little late, when people were taking positions without initiating a dialogue,” said Khanna. “I felt that it was imperative that I took a role, because I have been in the industry for a long time. All of us are now going to pull together on subjects like piracy and entertainment tax. If we managed to do this, then the Indian industry is on a good foundation. The mood last night was one of tiredness and relief and joy. It was so late, so we all went straight home after signing.”
Khanna said he was confident that the dispute had brought film producers and multiplexes closer together, adding that there was “no rancour” between the parties.
“We have all suffered long enough, and it is not good to deprive the audiences of films,” said Deepak Asher, president of the Multiplex Association of India. “It was not a good thing to deprive theatres of movies, but the issue is now resolved, and we can work together as a family to resolve other issues. All parties agreed together and at the same time.”
However, a member of the multiplex body, who declined to be named, described the agreement as leaving him “without even his shirt and underpants”.
“All of us gave in. Once PVR fell, then everyone fell. They decided to go with BIG Cinemas,” said this person, who added that PVR Ltd, the country’s biggest multiplex chain, had decided to follow the lead of BIG Cinemas and agree to the terms ahead of the remaining chains. Between them, PVR and BIG Cinemas control up to 25% of the market in terms of box office collections, according to Anand Shah, an analyst at Angel Broking Ltd.
“When you have a gun to your head, then either you pull the trigger, or you call their bluff. There was a full blown argument about this in the middle of the night. When you start pontificating, they will take your shirt, your underpants, and everything. The terms will make everyone bleed and they will mean fundamental changes to the industry. We will see mergers and acquisitions among multiplexes, and we will suffer badly for the next two years, and then I think emerge stronger,” the person added.