Netflix Number One Action Movie Cost Just $170 Million To Make

‘The Union’ was a hit on Netflix despite poor review scores

Netflix

It’s tough to find a chart-topping movie that cost less than $250 million to make and even tougher to find one which came in under budget. Netflix revealed yesterday that it managed to pull off both feats with the same movie.

Netflix has made a name for itself with its buzzy originals. So much so that even movies which aren’t highly rated can quickly climb its charts, especially if they have an A List cast. That perfectly describes The Union, a 2024 action thriller starring Mark Wahlberg and Halle Berry.

Wahlberg plays a construction worker from Jersey who is recruited into a secret spy organization by Berry, his high school sweetheart. Its cookie cutter plot came straight out of the 1990s so it’s little surprise that many critics thought it was outdated.

They scored it just 36% on review aggregator Rotten Tomatoes whilst audiences were even harsher rating it 24%. Remarkably, that didn’t stop it from becoming a blockbuster.

The Union ranked in the top 10 in 93 countries and topped the Netflix charts for two consecutive weeks. In its first week it attracted a massive 33.1 million views and, against all the odds, got another 40 million the week after. Surprisingly it didn’t cost Netflix dearly.

The cost of making movies in the United States is usually a closely-guarded secret as studios combine the cost of separate pictures in their overall expenses and don’t itemize the cost of each one. It is a different story for movies made in the United Kingdom like The Union.

The movie was partly shot on the H Stage of Shepperton Studios in Surrey, around an hour south west of London. It was made there as a result of a deal struck by Netflix in 2019 to rent large parts of Shepperton, creating a U.K. production hub for the streamer. It didn’t do it just because of the space.

Studios filming in the U.K. benefit from the government’s Audio-Visual Expenditure Credit (AVEC) which gives them a cash reimbursement 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 lifts the curtain on precisely how much it costs to make movies as each FPC has to file annual financial statements. It takes a bit of detective work to get to the bottom of them.

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.”

Cryptically, the Netflix subsidiary behind The Union is called Crumpet Productions and, as with all U.K. companies, its financial statements are released in stages long after the period they relate to. This starts during pre-production and continues after the premiere to give the production team time to ensure that all the bills are paid.

It explains why it latest filings cover the period up to December 31, 2024, four months after the movie debuted. The company’s earnings report shows that a total of $169 million (£140.4 million) had been spent on the production by then which it says was “less than the budgeted costs.”

One of its biggest single expenses was the $10.3 million (£8.7 million) spent on staff which peaked at an annual average of 153 people. 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. However, that’s not the end of the story as the government reimbursement had a magic touch on the picture’s bottom line.

The reimbursement is capped at 80% of core expenditure so in order to get back the maximum 25.5% of the money they spend in the U.K., production companies need to ensure that at least 20% of their core costs are spent outside the country. Netflix took full advantage of this as The Union was also shot in Croatia, where it benefitted from the country’s cash rebate program and employed local workers.

The U.K. hasn’t only 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 earnings report for Crumpet Productions shows that it had banked a total reimbursement of $35 million (£29 million) by the end of last year. This comes to 20.7% of the total costs and brings the net spending on the movie down to $134 million. The benefit to the U.K. government is even bigger than that.

The latest data from the British Film Institute (BFI) shows that in 2019, every $1.31 (£1) of reimbursement handed to studios generated $10.88 (£8.30) of additional Gross Value Added (GVA) benefit for the U.K. economy. It led to a total of $10.1 billion (£7.7 billion) in GVA being generated by the fiscal incentives for film in 2019.

Released in December 2021, the BFI’s triennial Screen Business report showed that between 2017 and 2019, the fiscal incentives to studios generated a record $17.7 billion (£13.5 billion) of return on investment to the UK economy and created more jobs than ever before.

In 2019, film making generated 37,685 jobs in London and 7,775 throughout the rest of the U.K. The BFI’s 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 around 87% of the $2.6 billion (£2.1 billion) spent on making films in 2024. Between 2020 and 2023 Netflix alone invested almost $6 billion in the U.K. shooting shows and films there. However, it remains to be seen how long the U.K. economy will continue to get a glow from attracting American studios away from their home country.

In May President Trump rocked Hollywood with the announcement that a 100% tariff would 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 is understood to still be on the agenda.

Trump’s special adviser, the actor Jon Voight, recently revealed that a 120% tariff on film and television and strengthened federal and state tax incentives are being discussed at the White House. Unless Trump follows 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.