Tom Hanks is in the news for a Broadway return, with the play This World of Tomorrow, but the story dragging his name back into feeds this week is three decades old. Zoom TV, part of India’s Times Network, has retold how Forrest Gump, a hit that took more than half a billion dollars at the global box office, was booked by Paramount Pictures as a film that never made a profit. In that telling, Hanks and director Robert Zemeckis are the clever ones. Their deals paid them from the first dollar, which, Zoom TV writes, ended up “effectively insulating their compensation from the studio’s internal accounting maneuvers.”

That reading gets the ledger backwards. Hanks and Zemeckis were not standing outside Paramount’s accounting; they were one of its biggest lines. On the figures the Associated Press reported at the time, the studio’s payments to the two men came to almost exactly the amount by which it said the film was in the red. The loss that left novelist Winston Groom’s profit share at zero was, give or take rounding, the size of the checks to the star and the director. Nobody broke a contract. That is the point.

This is more than Hollywood trivia. Anyone who has been offered a slice of the upside instead of a bigger fee, from a book option to startup equity to a royalty, is joining the same kind of queue. The Gump ledger is the cheapest lesson the business offers: the question is never how big the hit is, but who gets paid before your share is counted, and who decides what counts as a cost.

How Forrest Gump became a $62 million loss on paper

The story broke in May 1995, first in Forbes and then in an Associated Press report by John Horn that opened like this: “In one of the most striking examples yet of creative Hollywood accounting, the makers of ‘Forrest Gump,’ the fourth-highest-grossing movie ever, say the blockbuster is more than $60 million in the red.” The film was claiming worldwide ticket sales of $661 million at that point. It had just won best picture and five other Academy Awards.

The AP had seen a Paramount accounting document. By December 1994, the studio’s share of ticket sales around the world, after theater owners kept half, came to about $191 million. Against that, Paramount deducted $50 million in production costs, a distribution and marketing fee of about $74 million, $62 million in distribution expenses, $6 million in interest and payments to Hanks and Zemeckis of close to $62 million. The deductions add up to about $254 million, roughly $63 million more than the money in. The Deseret News put the figure at $62 million in the red as of December 31, and Premiere later printed it to the dollar, according to Film Stories: $62,403,581.

Read that list again. Some lines are soft. The AP noted that such charges “often are arrived at arbitrarily and could be inflated,” and an anonymous source told the agency that Paramount’s real distribution expense was far less than the $62 million reported. Home video, a big earner in 1995, had not yet been counted. But the payments to Hanks and Zemeckis are the hardest number on the page. That money really left the studio, and it left first.

Tom Hanks and Robert Zemeckis were paid first, then billed to the film

The contracts explain the order. According to the AP, Paramount, Hanks and Zemeckis all took a percentage of the gross receipts, “taking a cut of the first dollars that come in from theaters, video stores and soundtrack sales.” Groom, co-producer Steve Tisch and screenwriter Eric Roth were net profit participants, paid only from what remained after costs. Groom had sold the rights for $350,000 plus 3 percent of the net profits. People close to the film told the AP that Hanks and Zemeckis would each earn close to $40 million; IndieWire later reported an estimate of $65 million for Hanks alone.

Hal Vogel, then an analyst at Cowen & Co. and the author of the book Entertainment Industry Economics, gave the AP the sentence that explains the whole ledger: “The gross participants in effect block off the net participants.” Zoom TV is right that the gross deal protected Hanks. It leaves out where the protection came from. On a net profit statement, a gross share counts as a cost, deducted before anyone further down the line sees a dollar. The bigger the hit, the bigger that cost, which is one reason a hit’s net line moves so slowly.

The case that Tom Hanks earned every Forrest Gump dollar

The defense of the deal is strong, and Hanks can make it himself. Den of Geek, drawing on the Sherry Lansing biography Leading Lady, reports that Paramount demanded budget cuts shortly before filming, and that Hanks and Zemeckis each took a 50 percent cut in their salary, saving $8 million, in exchange for a bigger share of the profits. When there was no money for Forrest’s run across America, the two split the bill for those scenes themselves, then paid for a completion bond to cover overruns. Hanks told Graham Bensinger’s In Depth, as IndieWire reported in 2020, that the studio got its money back on the condition that it would “share the profits a little bit more.” His verdict: “And it was good for us, too.”

On that view, the gross points were a price, paid in salary given up and money put at risk on what Den of Geek calls a “massive, massive gamble.” Groom and the other net participants, meanwhile, signed what they signed. Vogel told the AP that net participants are hardly the “babes in the woods” they make themselves out to be. “They all have the highest paid attorneys money can buy and they’re all millionaires,” he said. “They know how the system works.” Paramount, for its part, said the film would eventually show a net profit, advanced Groom $250,000 and insisted: “We are treating everyone fairly and respectfully and we won’t be goaded into bad behavior.”

Why the Forrest Gump ledger still failed Winston Groom

All of that justifies paying Hanks. None of it justifies calling the film a loss. The risk the two men took was real, and it was rewarded in full before a single net dollar existed. Groom’s 3 percent was never a share of Forrest Gump’s success. It was a share of whatever survived the queue, and on Paramount’s statement nothing did.

Paramount already knew what a court thought of that design. In Art Buchwald’s lawsuit over Coming to America, Superior Court Judge Harvey Schneider ruled the studio’s net profit accounting “unconscionable,” the AP recalled. Paramount had argued that a film with $288 million in revenues had earned no net profit, and it later settled with Buchwald for $900,000. During that trial, according to the AP, Eddie Murphy called net profits “monkey points.” Warner Bros. had claimed in 1992 that Batman lost more than $20 million. This was practice across the industry, which is the trouble with treating Forrest Gump as a mystery.

Groom’s case ended the way these cases usually end. He hired the lawyer who had fought Paramount over Coming to America, Film Stories reports, and by June 1995 he had settled. The Deseret News reported the price: a seven-figure deal for his sequel, Gump & Co., and this time “a share of the film’s profits before expenses.” Paramount did not change its books. It changed his contract, once it wanted the sequel. “I’m happy as a pig in sunshine,” Groom said. The sequel was never filmed, and Groom died in 2020.

Forrest Gump’s money: what the record shows and what stays an estimate

The record is solid on structure. The AP’s line items, Groom’s $350,000 and 3 percent of net, the gross deals for Hanks and Zemeckis, the 1995 settlement and the Buchwald ruling all come from reporting at the time. So does the account of Hanks paying for scenes, which he gave himself in an interview and which Den of Geek’s version, drawn from the Lansing biography, matches.

The money is where the numbers drift. Hanks’s earnings are estimates: close to $40 million, per people close to the film quoted by the AP in 1995, and $65 million in the figure IndieWire cited in 2020. The worldwide gross has grown in the retelling from $661 million in 1995 to $678 million or $683 million today. Whether the film ever showed a net profit is a guess. Film Stories and Den of Geek both say they suspect it eventually did, and neither cites a Paramount statement. The AP’s anonymous source disputed the distribution expense, and no audit has been published.

Here is where interpretation starts, and it is ours. Gross deals are not villainy, and Hanks did nothing but negotiate well with his own salary at stake. But the moral the retellings draw, that the smart move is to get gross points, only works for people with the leverage to demand them. In this story that meant a star who had just finished shooting Philadelphia, the film that would win him his first Oscar, and his director. The novelist who wrote the book had a fee and a place in line.

Every retelling ends on the same note, that Hollywood’s books are a mystery. They are not. The order of payment was written into the contracts, and Paramount’s accounting followed it. On the studio’s own figures, Forrest Gump did not lose $62 million so much as pay it out, to the two men at the front of the line.