Entertainment and movie industry jargon for a really bad deal with respect to participation. Net receipts usually means revenue minus expenses. The problem lies in the definition of expenses, which might for example include taxes, allocated overhead for the studio and production company (including losses made on other films), arbitrary fees charged by the studio and production company’s related companies; actors’ and producers’ salaries and their share of the revenues (i.e., their participation), and their (and their entourages) hotel rooms, Winnebagos, apartment and house rentals, travel expenses (usually first class or private aircraft), and as any remotely chargeable extravagances; bonuses for studio executives, promotional costs, crew salaries and expenses, catering, parking tickets for everyone connected with the production, amortization of the studio lot, and whatever else the studio or production company’s bookkeepers and accountants can think of. As a result, such an arrangement means that when a recipient gets a share of the net receipts, it typically means zero (or indeed less.)
Hollywood is replete with stories of authors of blockbuster movies, which took huge sums at the box-office, who received nothing because they had agreed to receive net participation, or their participation was not calculated from ‘dollar one,’ perhaps most notoriously Winston Groom, the author of the novel and blockbuster movie Forrest Gump. Such a proposal is usually worthless to the recipient, unless he or it is looking for tax losses. Contrast with Gross Participation. See also Adjusted Gross Participation.