Karan Johar reveals why he sold 50% stake in Dharma, says margins on films like Brahmastra are low: ‘Real money is in middle-budget movies’

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Karan explained, “So, even when we made big hits, we were always sharing the profits. In this scenario, it gives us the opportunity of increasing and enhancing our profitability, and owning the film entirely. Yes, there will be those massive Brahmastras that we will make that will need the support of a studio. If I make a film that is over Rs 250 crore or Rs 300 crore, it’s not possible to fund that totally at our stage even now.”

But, Karan said, his goal is to produce much smaller films. “It’s the middle-budget film, where the cost to profit is super high. Those are the films that you can fund entirely on your own, and you can enjoy and reap the benefits of the big breakthrough profits. I believe the real bread and butter, the real money comes from middle-budget film.”

Karan said that with big films, the journey to recovery is often long and the margins aren’t very large. “But when you make a film in the Rs 65 crore to Rs 80 crore window and you really hit a large number, that is the film I’m chasing. More than the tent pole film, I’m chasing the middle-budget film that gives me the larger return. Everybody thinks bigger the film, bigger the money made, but that’s not true.”

A couple of years ago, Dharma co-produced Ayan Mukerji’s Brahmastra, which grossed around Rs 420 crore against a budget of around Rs 400 crore. He has also been producing smaller-budget films such as JugJugg Jeeyo and Bad Newz.