This is making me think the absurd IP movie making grift is actually at the core about doing these weird tax moves to improve profit margins. The studios are acting as hedge funds investing in productions, it makes no sense in the real world, but it makes financial sense somehow.
What makes me crazy about this stuff is the average American doesn't give a fuck because it's business so sleepy, yawn, zzz...
I wonder what would happen if studio a business reality tv show called Burning Money. For this episode they create a huge pile of $100M in cash in a stadium, monster trucks drive around for some reason, they set the pile on fire, and then while it's burning - and then the CEO comes out and gives a short speech how it was good business to burn all that money and his company is making money by doing it.
The real question is - what denomination? $100 bills is a mistake because it's too small for the spectacle. I think $100M in hundreds is only equivalent to ~50 suitcases. Maybe fewer. Maybe just the right ratio of fives and tens would work.
Giving the movie a full release pretty much doubles the production cost, since that's about what you have to spend to market it. They must have decided that it wasn't worth it.
Shoving the movie onto streaming with little fanfare seems free, but the problem with that is you can't write it off as a business loss. So if the movie isn't projected to make a certain percentage of its cost back, then it's more valuable to delete it and get the writeoff.
All of this seems strange to me though because we know that many major corporations don't destroy huge amounts of product just to mark it as a loss, and still end up paying virtually zero taxes. Is a movie studio unable to take advantage of the tax code the way Nike, FedEx and General Motors all can?
This is making me think the absurd IP movie making grift is actually at the core about doing these weird tax moves to improve profit margins. The studios are acting as hedge funds investing in productions, it makes no sense in the real world, but it makes financial sense somehow.
What makes me crazy about this stuff is the average American doesn't give a fuck because it's business so sleepy, yawn, zzz...
I wonder what would happen if studio a business reality tv show called Burning Money. For this episode they create a huge pile of $100M in cash in a stadium, monster trucks drive around for some reason, they set the pile on fire, and then while it's burning - and then the CEO comes out and gives a short speech how it was good business to burn all that money and his company is making money by doing it.
The real question is - what denomination? $100 bills is a mistake because it's too small for the spectacle. I think $100M in hundreds is only equivalent to ~50 suitcases. Maybe fewer. Maybe just the right ratio of fives and tens would work.
Giving the movie a full release pretty much doubles the production cost, since that's about what you have to spend to market it. They must have decided that it wasn't worth it.
Shoving the movie onto streaming with little fanfare seems free, but the problem with that is you can't write it off as a business loss. So if the movie isn't projected to make a certain percentage of its cost back, then it's more valuable to delete it and get the writeoff.
All of this seems strange to me though because we know that many major corporations don't destroy huge amounts of product just to mark it as a loss, and still end up paying virtually zero taxes. Is a movie studio unable to take advantage of the tax code the way Nike, FedEx and General Motors all can?