Amazon splashed out on John Cena and Idris Elba’s ‘Heads of State’
{CALVO_BRUNO}
Since the advent of streaming there has been speculation that the technology would ultimately bring the curtain down on movie theaters. While that still seems like a long way off, there is little doubt that many movies which would once appear on the silver screen are now showing on streaming platforms instead. One of Amazon’s latest blockbusters is testimony to that.
If ever there was a movie which was made for theaters it’s Heads of State which was released in July by Amazon MGM Studios via Prime Video. The premise of the the action comedy comes straight out of the 1980s as it stars Idris Elba and John Cena as leaders of rival nations who are reluctantly forced to team up to take on an evil adversary.
Elba has the role of Britain’s Prime Minister while Cena is his counterpart in the United States. They team up with an MI6 agent played by Priyanka Chopra and are joined by Paddy Considine, Jack Quaid, Stephen Root and Carla Gugino. Unsurprisingly, Cena and Elba save the day and end up friends. It wasn’t so simple to win over critics.
Heads of State only earned an average rating of 68% from critics on review aggregator Rotten Tomatoes while its audience score was only two percentage points higher. That didn’t stop the film from surging straight to the number one spot on Nielsen’s movie chart during its debut week with 1.1 billion minutes streamed as Deadline reported. It was also the number one movie on Prime Video for four weeks attracting more than 75 million viewers worldwide in its first month. No expense was spared on it.
The cost of making movies in the United States is a closely-guarded secret as studios typically combine their spending on separate films in their overall expenses and don’t itemize them individually. It is a different story for movies made in the United Kingdom like Heads of State.
The movie was shot in summer 2023 at London’s historic Shepperton Studios and on location throughout the U.K. It even showcased actual businesses on screen with Elba and Cena seen at the end of the movie celebrating their newfound friendship over a pint of beer and fish and chips in the Morgan Arms pub in east London. The location lifted the curtain on the cost.
Studios filming in the U.K. benefit from the government’s Audio-Visual Expenditure Credit (AVEC) which gives them a tax credit of up to 25.5% of the money they spend in the country. It comes with a catch.
To qualify for the reimbursement, movies must pass a points test based on factors such as how many of the lead actors are from the U.K. and how much of the production work is done there. Furthermore, at least 10% of their core costs need to relate to activities in the U.K. and in order to demonstrate this to the government, studios set up a separate Film Production Company (FPC) there for each picture.
This shines a spotlight on precisely how much it costs to make movies as each FPC has to file legally-binding financial statements. It takes a bit of detective work to get to the bottom of them.
The all-star cast included Jack Quaid as well as Cena and Elba
Chiabella James/Prime
The FPCs usually have code names so that they don’t raise attention with fans when filing permits to film on location. Tallying the code names with the productions they are responsible for requires deep industry knowledge which my colleague and I have built up over nearly 15 years of reporting. We are the only journalists worldwide who specialize in covering the financial statements of U.K. film production companies for national media and we have reported on them for more than 10 leading titles including The Times of London, The Guardian, The Daily Telegraph, The Independent and the London Evening Standard.
Once the code names have been correctly tallied with the films, the financial statements of the relevant FPC can be consulted to reveal how much the movie cost to make. That’s because the terms of the reimbursement state that each FPC must be “responsible for pre-production, principal photography/shooting and post-production of the film; and for delivery of the completed film.” In short, the FPC’s financial statements have to show the production’s entire costs, not just those incurred in the U.K. Studios aren’t allowed to hide costs in other companies as the terms also state “there can only be one FPC in relation to a film.”
Fittingly, the company behind Heads of State is called Stately Productions. As with all U.K. companies, its financial statements are released in stages long after the period they relate to. It explains why the latest set of filings is for the year to October 31, 2023. They show that the company spent $134.3 million (£110.9 million) during that time and note that “the final costs are forecasted to exceed the production budget primarily due to delays in production caused by the SAG/WGA strikes. The directors do not consider this to be an indicator of poor performance.”
The tax credit cast a powerful spell on the picture’s bottom line as it is calculated on up to 80% of core expenditure. This means that in order to get back the maximum 25.5% of the money they spend in the U.K., production companies need to ensure that 20% of their core costs are spent outside the country. Heads of State made the most of that as it shot some car chase scenes in Trieste in late summer 2023 followed by further filming in Belgrade, Serbia, in May 2024.
The U.K. hasn’t just become a popular filming location because of the high level of its reimbursement but also because there is no limit to the amount that can be paid out. That’s not all.
In addition to claiming on direct spending in the U.K., studios can also get a pro rata reimbursement on what are known as neutral costs throughout the production such as insurance and payment to senior producers, writers and directors.
These costs can be claimed in proportion to the amount of the activity in the U.K. so, for example, if the spending there only represents 22% of the total budget then 22% of the neutral costs will also qualify for reimbursement. Accordingly, the level of reimbursement can rise close to a third of the total costs which is a staggering sum.
The filings show that Stately Productions banked a $26.1 million (£21.6 million) credit bringing its net spending down to $108.2 million. It is likely that this will increase in the company’s next set of financial statements. They will cover the period up to April 30 this year – just two months before the premiere in London which was appropriately themed to Downing Street, home of the U.K. Prime Minister.
The next filings are due in 2026 and will show the cost of post-production, when costly visual effects are typically added. One of the biggest single costs shown on the current set of filings was the $10.6 million (£8.7 million) spent on staff with the company having a monthly average of 184 employees.
Costs are likely to rise further as visual effects spending usually takes place in the year before release.
Chiabella James/Prime
That doesn’t include freelancers, contractors and temporary workers as they aren’t listed as employees on the books of U.K. companies but often represent the majority of the crew on a film shoot.
The latest data from the British Film Institute (BFI) shows that in 2019 film making generated 37,685 jobs in London and 7,775 throughout the rest of the U.K. The BFI’s triennial Screen Business report added that when the wider impacts of the film content value chain are taken into consideration, 49,845 jobs were created in London in 2019 and 19,085 throughout the rest of the U.K.
In February the BFI released its latest annual data which showed that foreign studios contributed a massive 87% of the $2.6 billion (£2.1 billion) spent on making films in the U.K. in 2024. It remains to be seen how long the U.K. will continue to get a glow from attracting these studios away from their home country.
In May President Trump rocked Hollywood with the announcement that a 100% tariff will be applied to movies entering the U.S. that are produced in “foreign lands”. It was an attempt to bring film making back to the U.S. and although it has yet to be implemented, it hasn’t been forgotten.
On Monday Trump wrote on social media that “in order to solve this long time, never ending problem, I will be imposing a 100% Tariff on any and all movies that are made outside of the United States.” It nails his colors to the mast because if he doesn’t follow through with this threat to force studios back to the U.S., he will have to roll out the red carpet with incentives for them in order to compete with the U.K.
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