Financial disclosures released by Disney have recently revealed that the mega-company’s total expenditures for the latest Ant-Man film exceeded its box office haul despite the eye-popping budget. While on the surface, it would seem that this turn of events might frustrate studio brass, there’s more to the losses than meets the eye. The company was able to take advantage of a financial incentive given to studios by the British government, leading to a net profit of less than $90,000 USD.

It Didn’t Lose Money

Ant-Man and the Wasp: Quantumania
Ant-Man and the Wasp: Quantumania debuted last February and was far from the box office smash hit that others before it in the Marvel Cinematic Universe have proven to be, weighed down by the immense budget, a disappointing villain, and a VFX scandal. The film managed to gross a bit more than $476 million in ticket sales, which production studio Disney was entitled to half of. However, when considering the cost of making the movie, this cut meant that Mickey Mouse and the company were staring down the barrel of a $92.05 million loss.

Typically, a film studio will mask its profit and losses with the overall budget that includes its other films. Being able to dodge the itemization of any one particular film’s budget makes each endeavor appear to be a bit better, even when the studio might be holding onto a box office bomb. The studio’s decision to film in England meant two distinct things for the company: a full legal disclosure of its overall budget as mandated by British law AND a cash reimbursement.

Saved By A British Tax Credit

When choosing to shoot the latest Ant-Man movie in the country, Disney was forced to file financial statements that contained disclosures that included everything in the budget from material costs to the salary contributions of each staff member. These financial filings show that Disney received $327 million in revenue plus another $2.8 million in miscellaneous income. The total costs were reflected to be $388 million, leading to a pre-tax loss of more than $58 million.

But, the tax credit given to studios by Britain gave Ant-Man’s studio enough to capture a bit of a gain. The government reimbursed Disney up to 25.5 percent of what it actually spent in the nation, leading to $58,281,661 credit. By the time analysts reached the bottom line, the budget numbers reflect a net profit of $88,236 for Disney.

The Government Requires Transparency

Ant-Man and the Wasp: Quantumania
To qualify for the reimbursement, a minimum of 10 percent of the total production costs needed to be spent inside the United Kingdom. Film studios will set up additional film production companies inside the country so that they can show the financials. This separate company must be “responsible for pre-production, principal photography, and post-production,” and well as for the final edited version being delivered.

As this reimbursement can be rather hefty, the government in Britain forces any studio wishing to take advantage of the tax credit to show all of their cards. Whether it’s a big company like Disney shooting Ant-Man sequels or smaller studios filming an independent feature, the budget rules apply to all straight across the board. A film that results in a profit gets the reimbursement as a credit toward taxes owed, while a flop gets a cash reimbursement against the funds spent to make the movie.