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History: The word points became Hollywood buzz in 1950 after Lew Wasserman, president of the MCA talent agency, negotiated a contract that made actor Jimmy Stewart a millionaire with one motion picture. In lieu of a salary to star in “Winchester ‘73” (1950), Universal Pictures agreed to pay Stewart 4 points (4 percent) of the film’s gross profits. Points became the rage in post Studio System Hollywood where actors and directors were becoming free agents and able to leverage their popularity because studios, divested of theater ownership in 1948, could no longer afford box office flops. Points would go on to figure prominently in controversies arising from “Hollywood accounting,” which became as creative as anything in Hollywood. In particular, deals involving “net points,” i.e. a share of a movie’s net profits, proved to be, as actor Eddie Murphy put it, “monkey points.” Those owed net points were often told their movies earned little or no net profits even though gross profits surpassed production costs two, three or more times. Cited as the reason were nebulous overhead charges for distribution, marketing, production and more.
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Definition: Percentage that an individual or company owns in a motion picture’s gross income, i.e., “gross points,” or in its net income, i.e., “net points.”