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D’oh! Foreheads were almost certainly being slapped Homer Simpson-style at Warner Bros yesterday as studio executives reflected on their decision to sell the distribution rights to Slumdog Millionaire last August – three months before the film was released.

Slumdog, which cost only $15 million (£8.7 million) to make, has already gone on to take $160 million (£117 million) at the box office worldwide and could double this sum after last night’s haul of eight Oscars, including Best Picture. It is likely to go on earning millions of dollars a year for decades to come, thanks to DVD sales, TV licensing, and revenues from internet streaming.

It was during a crisis of confidence last spring that Warner Bros decided to hedge its relatively small bet (around $5 million) on Slumdog by handing over 50 per cent of the US distribution rights to Fox Searchlight, part of News Corporation, parent company of The Times.

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At the same time, Warner Bros decided to shut down its Warner Independent Pictures division, which had co-produced Slumdog along with Pathé, Celador Films, and Film4, to focus on more mass-appeal movies such as The Dark Knight. Of all the movies on Warner Independent Pictures’ 2008 slate, it is thought that Slumdog was the only one that had its distribution rights sold to a third party.

Danny Boyle, the director – who was told that the film was going to go straight to DVD in the US – made sure to reference Warner Bros in his acceptance speech for the Best Director award. “I’ve got to thank everybody at Warner Bros for having the great grace to pass the film on to the extraordinary guy at Fox Searchlight, Peter Rice, and all his team,” he said.

Back in London, Peter Carlton, the senior commissioning executive at Film 4, gleefully remembered showing a director’s cut of the film to Warner Bros last June. “It was like showing it to a brick wall,” he said. “They told us afterwards they were thinking of sticking it out on DVD.”

But Mr Carlton said that Slumdog’s eventual distribution deal with Fox Searchlight remained heavily biased in favour of the studio. He accused big American studios like Fox and Warner Bros of “damaging British film” by imposing distribution deals that gave little or nothing back to independent film financiers.

“They make sure they’re the first in line for the profits. And the second and third in line as well. It’s damaging to the whole British film industry.”

Mr Carlton said that although Slumdog was an entirely British film he was expecting “practically no money” to flow back into the country from profit made in America.

Paul Smith, the chairman of Celador, which put up £7 million to finance Slumdog, said he was “extremely happy” with the American distribution deal. “The more successful the film is over there the more money will flow back into Britain,” he said, adding that he expected to make “close to £10 million profit”. Fox Searchlight and Warner Bros stand to clear around $40 million in profit from US ticket sales alone, industry sources said.

Tessa Ross, controller of film and drama at Channel 4 who optioned the original book and is credited with getting the project on to the screen, warned against the British making films with the express intention of winning Oscars.

“Danny Boyle is a brilliant director but he’s had a long career up to this point,” she said. “The truth is we need protected, sustained funding to nurture talent through good times and bad.”

Fox Searchlight, which could not be reached for comment yesterday, would make a “significant” amount of money as American distributors, Ms Ross said. But Pathé – as distributors for the rest of the world – would make “a lot” of money as well.

The next Slumdog?

Fish Tank, the latest film by Andrea Arnold, 47, who won an Oscar in 2004 for Wasp. Her debut feature, Red Road, won the Jury Prize at Cannes in 2006

In the Loop, Armando Iannucci’s directorial debut, is believed to be close to winning a distribution deal after it was shown at the Sundance Film Festival

Chéri, by Stephen Frears, who is already riding high after the success of The Queen. Stars Michelle Pfeiffer

An Education, by Lone Scherfig, stars young British hopefuls Carey Mulligan and Dominic Cooper. It was well received at Sundance

Bunny and the Bull, by Paul King, who is known as the writer and director of The Mighty Boosh television comedy series

Moon, by Duncan Jones, better known outside the film world as Zowie Bowie, David Bowie’s son. This, his debut feature film, is a science fiction thriller starring Sam Rockwell. It has already attracted some attention at Sundance

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