'Hollywood Accounting' Losing In The Courts

Found on Techdirt on Thursday, 08 July 2010
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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.

This isn't new or surprising, but it's getting attention because the income statement for the movie was leaked online, showing just how Warner Bros. pulled off the accounting trick.

In that statement, you'll notice the "distribution fee" of $212 million dollars. That's basically Warner Bros. paying itself to make sure the movie "loses money."

Now it appears that Hollywood Accounting is coming under attack in the courtroom... and losing.

With these lawsuits exposing Hollywood's sneakier accounting tricks, and finding them not very convincing, a number of Hollywood studios may face a glut of upcoming lawsuits over similar deals on properties that "lost" money while making millions.

At the same time, they blame filesharing for all their losses when they steal (yes, really steal instead of duplicate) the money from those who have earned it. The more one hears about the entertainment business, the more one has to loathe them.