Tom Hanks And The Financial Gamble Behind Forrest Gump's Success

In hindsight, it’s easy to say that Forrest Gump was an enormous hit, touching emotional chords with audiences and critics when it graced theaters in the summer of 1994. The film garnered 13 Oscar nominations, winning six, including Best Picture, Best Actor, Best Director, and Best Adapted Screenplay. Back in 1994-1995, the film's worldwide box office exceeded $525 million, a figure that today stands at $678 million. However, prior to its release, Tom Hanks made a daring choice that would change his financial trajectory.

The heartwarming story centered on a man with an intellectual disability was considered a huge gamble by the studio. With first-time producer Wendy Finerman, director Robert Zemeckis, and star Tom Hanks involved, there were many uncertainties. This backdrop makes it remarkable that Tom Hanks decided to forgo his salary for Forrest Gump in favor of a share of the film's profits.

After nine long years of development, Forrest Gump finally went into production with a budget of $50 million. Paramount Pictures felt anxious about this budget, even though they liked Eric Roth's script. The studio was not optimistic about a story featuring a character with a mental disability connecting with audiences, prompting them to look for ways to cut costs. Producers Steve Tisch and Wendy Finerman were asked to reduce their deals, as was director Robert Zemeckis. Tom Hanks, who was initially set to receive $7 million, agreed to defer part of his salary for a stake in the box office returns. If the film flopped, he would have worked nearly for free—a risk that turned out to be incredibly rewarding.

Tom Hanks negotiated a "first dollar" deal, which is a rare arrangement in Hollywood. This meant he earned a share of the box office receipts owed to Paramount after theaters took their cuts, but before the studio deducted expenses. This type of deal is crucial because once expenses are subtracted, creative accounting can significantly diminish the earnings for actors. Most non-first dollar agreements often end up being worthless.

Since the film's release, Tom Hanks has seen his decision pay off tremendously. Instead of the initial $7 million, he has earned around $70 million to date, thanks to streaming rights, syndication fees, and home video sales. This ongoing revenue stream is a testament to the film's enduring popularity and the smart gamble Hanks took.