How Hollywood Studios Manage to Lose Money on Movies That Make a Billion Dollars

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And yet these guys cry foul over "pirating' bit of a double standard

"Hollywood accounting" otherwise known as "tax evasion".

Lesson learned: take royalties on gross receipts, and NOT royalties on profits where the "profits" can be manipulated.

So "The Producers" was actually a documentary and guide line for movie companies how to evade taxes. What a timeless classic!

Warner Brothers: We made 1 Billion dollars on this film. Irish Warner Brothers Pencil Company: We charge 1 billion dollars per pencil rental. Warner Brothers: oops, we made no money on that film, oh well.

And if anyone else tried to pull this they'll get told: "I'm sorry, those loopholes are only for those in the loop." And now you know how movie companies and even major corporations pay absolutely nothing in taxes year after year after year. But if you're even so much as late paying your taxes, they'll eviscerate you without hesitation. Why do they attack average people and not the companies? Well, companies like these can pay lawyers tons of money giving them teeth that the IRS isn't willing to fight with, which can get rather costly for the IRS. This is why the average tax payer gets the shaft and there's little they can do about it.

I still feel like Hollywood producers and accountants just watched Mel Brooks' The Producers and said to themselves, "That's not a bad idea!"

After having studied film and television for a year, I came to really dislike both film and television. What a bunch of greedy bastards. Pirates are truly the good guys.

And they wonder why the MPAA’s claims about the costs of piracy are mocked...

And that’s why everyone who has a successful series or movie franchise hires a forensic accountant and forces the studio to settle.

I remember in the 90s Paramount kept saying they were losing money on the Star Trek franchise. Then they got a new leader. She made it very clear that past statements were lies. She reported that Star Trek merchandise, by itself, had made Paramount and CBS (then co-owners of the franchise) more than $2 billion.

And best move ever by George Lucas: Take merchandising rights instead of money. Why would you need money if you have the licence to print it?

I’ve always wondered where the accounting firms and the IRS are when the studios claim this BS on their tax returns.

This reminds me of the movie "The Producer" about this 'creative accounting'.

And they're worried about me downloading an old movie from the 30s.

So they're using loopholes and committing fraud.

It's a bit like how a certain fruit themed technology company pays virtually no tax in Australia, despite selling container loads of massively over priced product every day. They buy in their inventory from entities (owned by their parent company) located in tax havens at vastly inflated prices , their mark up being barely large enough to cover their local expenses.

The thing I would really like to know if how much money does a movie make from product placement? I'm sure it's a pretty penny, and reduces the 'cost' of making a movie by A LOT. Can you do a follow-up video on the money made from product placement in movies?

Here's the thing: this type of accounting is done everywhere by everyone (obviously the quality of the accounting varies). It only makes news, or videos like this, when the millionaires are fighting billionaires. The little guy is always getting screwed and the Accounting "profession" doesn't give a shit as long as 'it gets paid'.