[Dirtbag59]

Some more stuff on Hollywood Accouting. Copy and pasted from an annonomoys user on TheRegister.co.uk. Keep in mind this is from the same guys that are pushing for SOPA and PIPA.

iiNet wins AFACT appeal • The Register Forums

Some Introductory Excerpts:
'Hollywood Accounting' Losing In The Courts | Techdirt

If you follow the entertainment business at all, you're probably well aware of "Hollywood accounting," whereby very, very, very few entertainment products are technically "profitable," even as they earn studios millions of dollars. A couple months ago, the Planet Money folks did a great episode explaining how this works in very simple terms. The really, really, really simplified version is that Hollywood sets up a separate corporation for each movie with the intent that this corporation will take on losses. The studio then charges the "film corporation" a huge fee (which creates a large part of the "expense" that leads to the loss). The end result is that the studio still rakes in the cash, but for accounting purposes the film is a money "loser" -- which matters quite a bit for anyone who is supposed to get a cut of any profits.

For example, a bunch of you sent in the example of how Harry Potter and the Order of the Phoenix, under "Hollywood accounting," ended up with a $167 million "loss," despite taking in $938 million in revenue.
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http://www.p2pnet.net/story/41701

We’re finally making progress on the real criminals of entertainment piracy. The MPAA ia losing court case after court case using their infamous ‘Hollywood Accounting‘, and losing consistently, primarily because jury members are finally realizing how sleazy these members of the MPAA really are.

Honestly, how does New Line Cinema think it can gross nine Billion, that’s Billion, on the Lord of the Rings Trilogy worldwide, and then try and weasel out of paying J.R. Tolkien estate for the idea, and Peter Jackson for directing the movie, claiming it ‘lost’ 120 Million? This is probably the reason behind the delay of creating ‘The Hobbit’ movie. If I were Peter, I wouldn’t direct any movie until I got paid for the previous one.

Hollywood Accounting is where the MPAA (insert big 6 assholes here) create a corporation for each movie, ie Lord of the Rings, LLC, and then purposely use that entity to numerically absorb money, and to reflect a loss by creatively making up numbers for advertisement, distribution, additional licensing and/or copyrights for the particular movie. They illegally and grossly bloat these numbers as ‘expenses’ for the Studio to allegedly ‘pay’ from the gross of the movie itself.

After ‘New Line Cinemas’ paid expenses to ‘Lord of the Rings, LLC’, there apparently just wasn’t enough money left to pay the director, or the estate of J.R. Tolkien, who owns the copyrights on the idea, and wrote the books. This ensures that stakeholders in the movie itself get the ’steak’ of the profits, whereas the entitled entities, like the writer, producer, rights holder, etc, are left with the ‘peas’, if that. Typically they only get to lick the plate after the fatcat assholes at the MPAA get their ill-gotten gains first.

United Hollywood: The End of Hollywood Accounting?

The WGA, the Teamsters and California State Senator Sheila Kuehl have just announced the introduction of the "Fair Market Value Bill." The bill seeks to prevent studios from selling programming to sister companies for below market value. This particular strain of Hollywood accounting is designed to shift profits away from the studios (where they must be shared with talent and producers and serve as a basis for pension and health contributions) to networks, where they may be enjoyed without the pesky need to pay one's "partners."
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