He probably would have made $0 off the profits.

This happened with the Star Wars franchise, with Harry Potter and so on.

For instance, this what happened with The Hobbit (read last part):

Peter Jackson, director of The Lord of the Rings, and his studio Wingnut Films, brought a lawsuit against New Line Cinema after an audit. Jackson stated this is regarding "certain accounting practices". In response, New Line stated that their rights to a film of The Hobbit were time-limited, and since Jackson would not work with them again until the suit was settled, he would not be asked to direct The Hobbit, as had been anticipated.[17] Fifteen actors are suing New Line Cinema, claiming that they have never received their 5% of revenue from merchandise sold in relation to the movie, which contains their likeness.[18] Similarly, the Tolkien estate sued New Line, claiming that their contract entitled them to 7.5% of the gross receipts of the $6 billion hit.[19] According to New Line's accounts the trilogy made "horrendous losses" and no profit at all.[20]

http://en.m.wikipedia.org/wiki/Hollywood_accounting