We have movies on the mind at Econ4u following Sunday’s Academy Awards. Watching everyone from the uber-wealthy Brangelina, to the resurgent Mickey Rourke, to the first-time stars of Slumdog Millionaire, I was left wondering how much of their mega-salaries actually end up in their bank account.

Let’s look for example at Mickey Rourke. Following his comeback performance in The Wrestler he’s looking to recoup the money he squandered as his career fizzled in the late ‘80s and ‘90s. He’s reportedly been offered $250,000 to play a villain across from mega-star Robert Downey Jr. in Iron Man 2.

Now in this economy, nobody should be complaining about a $250K payday. But how much is Rourke actually going to take home?  You really have to consider the actor as a small business.  And here is a breakdown of this small business’ expenses:

• The agent. The general policy in Hollywood is for the agent to take 10% of the negotiated rate.

• The manager.Rates for managers vary as wildly as they do for actors. But fees fall generally between 10-20%. For our sakes, we’ll assume that the manager charges 15% of the gross pay.

• Any major actor also needs to pay a lawyer to ensure that all the documents are signed properly and to protect them in case there is a dispute. That’s another 5% of the salary.

• The big stars (and big mouths) like Rourke also need to pay a publicist to both ensure that they get into the gossip rags and ensure that they stay out of them (depending on the circumstance). A quick look at Rourke-related headlines indicates that he keeps his publicist busy. Some stars need a stylist. And even though Rourke looked like Mr. Saturday Night fever on Sunday at the Oscars, what appears to the naked eye as Miami Vice was actually Jean Paul Gaultier. His stylist and publicist for any Iron Man promotion will take at least another 5%.

• Taxes. Making $250,000 a year, Rourke is paying a 35% federal tax rate plus 10.3% state tax rate in California. And if President Obama stays true to his campaign promise, those making 250K or more will be seeing a 2% tax hike.

So what’s the final tally? After all those expenses Rourke would actually take home just $50,000 from his work on Iron Man 2. Now one assumes that he might do other films that would help defray the cost of the publicist and stylist, or have a sponsor do so.  So even if you sliced off those expenses and cut his manager’s salary to 10%, the most Rourke could possibly bring home for the film is $74,250. Not a bad payday, but certainly not glitz and glamour either. He might want to hold off on that new motorcycle.

Rourke’s small business’ profit margin compares quite favorably to other common small businesses though. The profit margin for an average restaurant is just 5%, BEFORE taxes.  So if Brangelina walked out of a mom-and-pop restaurant with a $250,000 tab, Mom and Pop would only keep $8,750 of it. That makes Rourke’s $74K haul look quite nice by comparison.

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