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1960 Variety Article: "Hitchcock to Make At Least $5 Million From Psycho"

posted 3 years ago by ecarle (14979)
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https://variety.com/1960/film/news/alfred-hitchcock-to-make-at-least-5-million-for-psycho-1201341585/

A 1960 article about Hitchcock looking to make about $5 million -- personally -- for Psycho. Big bucks back then...on a cheap investment.

I like how the article quotes an "industry insider" -- just like today's -- trying to analyize the film's success and saying "Its a freak." Damn right. Or as the 1960 movie poster said "A new and completely different form of screen excitement!"

I also like how it is written that to get a full take on Hitchcock's ownership deal on the movie(60%) "you have to have lawyers in the room."

Personally, I've always wondered how Hitchcock was able PERSONALLY to sell the Paramount film Psycho to Universal ...when he only owned 60% of it. Perhaps the 60% was on profits but he had full ownership to sell the negative?

Get the lawyers in here!

PS. I also like the line, "Dracula never had it so macabre."

[–] BullSchmidt (3189) 3 years ago

Before we get too happy for Mr. Hitchcock, that was back in the days when top breadwinner paid a lot more in taxes than they do today. Income over $300,000 was taxed by the IRS at 91%. There were tax shelters and other ways of avoiding paying taxes (legally, not illegal tax evasion) but he would have needed a professional to set those up, and such people often charged a percentage -- "you can either pay 91% to the IRS, or 33% to me."

[–] ecarle (14979) 3 years ago

Before we get too happy for Mr. Hitchcock, that was back in the days when top breadwinner paid a lot more in taxes than they do today.

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the first thing I should note, BullSchmmidt, is to give credit to you for finding this 1960 variety article when we were talking over on the Godfather page and I brought Psycho up (financially.) I dutifully brought the article over here to the Psycho page and...you followed. Thank you.

--

Income over $300,000 was taxed by the IRS at 91%. There were tax shelters and other ways of avoiding paying taxes (legally, not illegal tax evasion) but he would have needed a professional to set those up, and such people often charged a percentage -- "you can either pay 91% to the IRS, or 33% to me."

---

Hitchcock's spectacular personal profit from Psycho has been so legendary in film history that the idea that he didn't get to keep a lot of it is...rather dismaying.

I am inferring from your comments that it is a lot easier for modern day millionaires(and billionaires) to hide their income, perhaps Hitchcock operated in a more "honest age" about giving to the government?

Still, there were tax shelters back then, too, and I expect Hitchcock could hire the best investment advisors -- though I dunno, In Hollywood there were numerous such advisors who cheated big stars like Kirk Douglas, John Wayne, and Doris Day out of their earnings (and Doris was MARRIED to hers.)

One way Hitchcock made money off of Psycho was to sell the rights to it (and to his TV series) to MCA-Universal in exchange for stock in the company(Hitch became the third highest holder of Universal stock.) One would surmise that this meant Hitchcock "earned" off of such Universal hits as Airport, American Graffiti, The Sting, Jaws, and Animal House(all released while he was alive), but I dunno..did that turn into cold hard cash?

CONT

[–] ecarle (14979) 3 years ago

I DO recall reading -- with some surprise -- a comment by Ernest Lehman (who wrote North by Northwest and Family Plot) that "Hitchcock had money troubles" in his later years. I was rather shocked by that statememt; I thought that among peers who ended up l iving in apartments or the Motion Picture Home, Hitchcock was comparatively rich.

But we have to confront this: yes, Psycho was a gigantic blockbuster made out of Htichcock's pocket and he made big money off of it...but once he moved to Universal for The Birds and all five movies after that...he no longer had big ownership , and those movies didn't make as much money as Psycho. I suppose Hitchcock got his $250,000 fee(maybe moved up for inflation) but....The Birds, Marnie, Torn Curtain, Topaz, Frenzy and Family Plot were NOT blockbusters. The Birds earned half of Psycho's take. Frenzy is listed as the biggest hit after Psycho, but I don't recall it being a blockbuster.

In the 70's, Universal paid Hitchcock one million dollars to make some rather silly TV and radio ads for the Universal Studios Tours (California ads only). I recall him having to "fly like Superman" in front of a process screen and he looked too old and too sophisticated to have agreed to that gag. (Spielberg thought these commercials were terrible and an insult to Hitchocck's prestige.) Still: one million dollars.

I read a bio of Dean Martin that showed HE invested HIS earnings well (or a good investment man did). Thanks to his hit TV show(for which he was very highly paid); his records, his Vegas act and a surprise blockbuster in Airport, Dino had money available to literally buy up half of Southern California real estate, from Santa Barbara through Los Angeles and on down to San Diego.

I wonder if Hitch had some similar investments made? I know he owned a large cattle ranch.

CONT

[–] ecarle (14979) 3 years ago

Oh, well, "when the legend becomes fact, print the legend." Psycho stands as Hitchcock's biggest hit, and biggest personal profit maker.

Poor guy. He only really had this one. I recall Hitchcock watching Spielberg's Jaws hit big; Hitchocck said "but now, how can he top it?" Little did Hitchcock know that Spielberg would be among the first to win from "continual blockbusters" -- Psycho ten times. (Close Encounters, the Indy Jones movies, ET, the Jurassic Park movies...and movies like Back to the Future as a producer.)

What I think is different for Psycho is that, on the one hand, its this big Hollywood hit(like Grease) but on the other hand the movie itself is artful and terrifying and haunted people who saw it for decades. Powerful stuff -- the box office was almost incidental.

[–] BullSchmidt (3189) 3 years ago

> I am inferring from your comments that it is a lot easier for modern day millionaires(and billionaires) to hide their income, perhaps Hitchcock operated in a more "honest age" about giving to the government?

I have no idea. There certainly were and are a lot of legal ways to reduce your taxes. I assume everything Hitchcock did was by the book.

> I DO recall reading -- with some surprise -- a comment by Ernest Lehman (who wrote North by Northwest and Family Plot) that "Hitchcock had money troubles" in his later years.

I'm sorry to hear that, although I'm not surprised -- Psycho was a once in a lifetime super-success for him. I'm not saying that to criticize him, just that everything came together in a "perfect storm" of sorts for that movie.

When you're dealing with those kinds of amounts of money, you need good advisors. Johnny Carson had the opposite situation from Hitchcock. When he died he was worth about half a billion dollars, but early in his tenure on The Tonight Show he had real money problems because of incompetent advisors. His contract with NBC had a clause that most of his compensation would be deferred. NBC liked that because that was money they didn't have to pay him yet, and Carson liked it because it's a useful tactic to ultimately lower your taxes. But his contract with his agent specified that the agent got fifteen person of his compensation immediately, whether that compensation was deferred or not. I don't know what the dollar amounts were, but imagine this scenario in today's money -- you're making $1,000,000 per year, $800,000 of which you won't get for years but is accumulating for you, and you get $200,000 per year now. But per your contract with your agent, you must pay him 15% of that million, $150,000, now. Ouch!

[–] ecarle (14979) 3 years ago

> I am inferring from your comments that it is a lot easier for modern day millionaires(and billionaires) to hide their income, perhaps Hitchcock operated in a more "honest age" about giving to the government?

I have no idea. There certainly were and are a lot of legal ways to reduce your taxes. I assume everything Hitchcock did was by the book.

--

Oh, I expect so, too -- he was very afraid of the police; that would extend to the IRS. He probably overpaid!

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> I DO recall reading -- with some surprise -- a comment by Ernest Lehman (who wrote North by Northwest and Family Plot) that "Hitchcock had money troubles" in his later years.

I'm sorry to hear that, although I'm not surprised -- Psycho was a once in a lifetime super-success for him. I'm not saying that to criticize him, just that everything came together in a "perfect storm" of sorts for that movie.

---

Oh, yes. That's why Hitchcock misjudged how Spielberg WOULD have more blockbusters after Jaws. Hitchcock himself used the term "once in a lifetime event" to describe the success of Psycho. Unlike, say, James Cameron(who wanted over a decade to deliver a movie after Titanic), Hitchcock was thrown only by about two years before bringing forth The Birds(an event in its own way, a great film with flaws) -- but he got back in the game and stayed there to the end, making smaller movies with less location work and physical labor for him.

Ernest Lehman's comment about Hitchcock's money troubles aside, Hitchcock was certainly more rich in the end than most of his peers. Psycho AND the other movies AND the TV show AND his royalties from the Mystery Magazine, books, and records sold under his name. I assume he did fine.

CONT

[–] ecarle (14979) 3 years ago

And he did something fascinating: he took five movies he owned out of release (to TV, to cable, to VHS) while he was still alive, and announced to the press -- these films shall be released after my death, in an Alfred Hitchcock film festival. He said he was doing it "to provide for my family." I'm not sure about that. I think he did it to assure himself fame and fortune and power ...after his death!

And it worked. Hitchcock died in 1980. The five movies came out -- to theaters first -- in 1983 and 1984. With two bona fide classics coming out first -- Rear Window and then Vertigo -- the "late" Hitchcock got reviews like "The Best Director of 1983 has been dead for three years" or "The Best Movie of 1983 was made in 1954." These movies also added millions to their earnings...not a lot of millions, but millions nonetheless.

And a new version of Hitchcock's TV show returned in the 80's -- re-stagings of old episodes with Hitchcock's original intros "colorized."

As one critic wrote in the 80's: "Alfred Hitchcock has never stopped being a leader in movie-making and as a cultural force. He just died, is all."

Or as I like to say "Hitchcock is Elvis."

CONT

[–] ecarle (14979) 3 years ago

When you're dealing with those kinds of amounts of money, you need good advisors. Johnny Carson had the opposite situation from Hitchcock. When he died he was worth about half a billion dollars, but early in his tenure on The Tonight Show he had real money problems because of incompetent advisors. His contract with NBC had a clause that most of his compensation would be deferred. NBC liked that because that was money they didn't have to pay him yet, and Carson liked it because it's a useful tactic to ultimately lower your taxes. But his contract with his agent specified that the agent got fifteen person of his compensation immediately, whether that compensation was deferred or not. I don't know what the dollar amounts were, but imagine this scenario in today's money -- you're making $1,000,000 per year, $800,000 of which you won't get for years but is accumulating for you, and you get $200,000 per year now. But per your contract with your agent, you must pay him 15% of that million, $150,000, now. Ouch!

---

Yes...one wonders how a star like Carson could accept those terms...perhaps the agent's cut should have been deferred, too?

Speaking of income deferrments, there's a famous Hollywood story of William Holden taking his huge (in 1957) payout from "The Bridge on the River Kwai" in $50,000 a year increments over 20 years. Tax purposes. But inflation would eat at that $50,000, I'd suppose.

A weird source about Hollywood money issues came from an FBI wiretap of some Mafia guy -- Sam Giancana , maybe (paraphrased):

"All those Hollywood (expletives) have money problems. They don't know how to save it."

I also recall reading some sneering Hollywood "money manager" summing up why stars go broke:

"I see it all the time. They want to buy a Rolls-Royce. They say "i can buy that with just two weeks of income." But they keep spending that same two weeks over and over until they are broke."

CONT

[–] ecarle (14979) 3 years ago

Or more simply computed:

A star buys a house which(with his other expenses) requires an income of $20 million a year. He gets paid $10 million per movie, makes two movies a year -- covered(in gross.)

But soon , his 'price goes down -- to $3 million a picture. That's more than most of us make per year -- but with $10 million in expenses each year -- they go broke.

I don't think this happens anymore. Movie stars get base pay and percentages based on international sales and they can't possibly go broke. Even Johnny Depp -- who can't get a big movie deal anymore -- owns about 20 mansions leaving him with some assets.

Hitchcock owned one house in Beverly Hills(Bel Air) and one house on the Northern California coast, in Santa Cruz -- and that was it. The rest of his money went to a wine collection and travel to Europe.

In that era, you had Hollywood movie stars with second homes in..Palm Springs(aobut 100 miles east.)

Modernly, Hollywood stars buy huge swathes of property in Idaho and Wyoming, second homes in Italy and France...its just a whole new ballgame, earnings wise.

For now.