More Hollywood Accounting Errors

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  • More Hollywood Accounting Errors

    Here are two articles I came across this week so far.

    In the 1st one Disney claimed Millionaire lost money and in the 2nd one Warner Bros. claimed latest Harry Potter lost money.
    I understand these companies are protecting their bottom line after they have paid out salaries etc, but my question is why even offer profit participation if you aren't ever going to pay it?

    http://www.latimes.com/business/la-f...,4051564.story

    http://www.deadline.com/2010/07/stud...ey-accounting/
    The Best Impersonation of Christian Bale Freak Out!!

    http://www.youtube.com/watch?v=Fd5631H6KuE

  • #2
    Re: More Hollywood Accounting Errors

    I read a funny article about all of that in which they said that net is usually offered to, and I quote, "writers, and low level actors and directors".

    Don't you just love that? They didn't say low level writers. They said writers, in general, as in ALL...and low level others. So yeah, writers, those who create it all, are seen as no more valuable nor respectable than some random bit part actor no one has ever even heard of.

    Gotta love it! I know I do. It just gives me something to fight.

    Comment


    • #3
      Re: More Hollywood Accounting Errors

      It's theft. But not directly theft. It's not like breaking a window, jumping in and stealing the goods.

      One famous music producer once told me: "It's all in the contract," meaning they will steal if you give them the keys to the house.

      The above link is to a specific contract that defined the FORMULAS and CALCULATIONS to be used to come up with profits, royalties and or bonuses.

      So if you have no leverage in a negotiation and they don't care if you go else where but don't mind acquiring the product, they WILL take everything you own.

      If you have leverage then above link doesn't apply cause the DEFINITIONS of Cash Break or gross is wildly different then someone who doesn't have leverage.

      i.e., first dollar gross or cash break means NOTHING unless it's defined. So i give you First dollar gross but i define it as company must recoup all costs, tax, marketing promotions, participants, cash out, furniture... then you get paid.

      another example is first dollar gross herein client will get paid after company recoups production cost.

      big difference.

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      • #4
        Re: More Hollywood Accounting Errors

        Winston Groom's price for the screenplay rights to his novel Forrest Gump included a share of the profits; however, due to Hollywood accounting, the film's commercial success was converted into a net loss, and Groom received nothing. That being so, he has refused to sell the screenplay rights to the novel's sequel, stating that he "cannot in good conscience allow money to be wasted on a failure".


        My new hero...

        Comment


        • #5
          Re: More Hollywood Accounting Errors

          I'll never understand why Hollywood is so averse to paying writers, the progenitors of film, adequately and fairly. Meanwhile, some a$$hole actor, who has more traction in tabloids than he does on celluloid, gets multi-million dollar deals.

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          • #6
            Re: More Hollywood Accounting Errors

            Originally posted by Buzz View Post
            however, due to Hollywood accounting, the film's commercial success was converted into a net loss, and Groom received nothing.
            ...wow.

            I know this should be old hat by now, but this stuff never ceases to amaze me.
            I can't believe the WGA hasn't been using their Lawyers on this issue.
            Especially since more than a few members of the WGA *are* Lawyers.

            The Producer Lawrence Turman included this gem of an anecdote in his book:

            Not long after Short Circuit came out, he received a statement from the Studio
            saying he would receive no profit participation, as there were no profits to be shared.

            Later that *very day* he got a call from the Studio:

            How fast could he make a sequel?

            ...

            Comment


            • #7
              Re: More Hollywood Accounting Errors

              "a reckoning of numbers" indeed...

              accounting practices are going to be a huge problem for the studios moving forward as this is obviously just at the beginning stages of what will become many many lawsuits...worse, jurors have obviously not forgotten worldcom...

              ...that and ze germans may not appreciate what they learn as to the true costs of things...

              i imagine the shredders are working overtime these late nights and weekends...

              as far as impact on writers, i would imagine bad short-term/good-long term...
              Last edited by Lounge Spartan; 07-17-2010, 09:51 AM.
              ...it's like a battle between motors and horses, like technology vs. horse.

              Comment


              • #8
                Re: More Hollywood Accounting Errors

                I know this should be old hat by now, but this stuff never ceases to amaze me. I can't believe the WGA hasn't been using their Lawyers on this issue. Especially since more than a few members of the WGA *are* Lawyers.

                This scam has been going on for literally decades.

                They are telling the gov/IRS one thing, and then reporting to you a different version of the truth.

                So what is happening is that these studios are charging off (in excessive amounts) items so that it appears (to you) that this picture has never gone into profits.

                I remember reading about this way back in the 80's when they were charging 3k to hang a movie poster and calling it "publicity fees" --now multiply this by the thousands (the theaters) and you get the picture.

                Actually what the studios is pulling off is direct fraud... criminal fraud.

                I am amazed that the WGA has not hired any forensic accountants to look into this matter... the WGA has dropped the ball on this completely.

                I personally know a couple of forensic accountants who could (if given the access) send many of these studio executives to lenghty prison sentences for criminal fraud.

                Yes--they are stealing from you. Stealing from you intentionally, and with premeditation.

                ST



                Winston Groom's price for the screenplay rights to his novel Forrest Gump included a share of the profits; however, due to Hollywood accounting, the film's commercial success was converted into a net loss, and Groom received nothing. That being so, he has refused to sell the screenplay rights to the novel's sequel, stating that he "cannot in good conscience allow money to be wasted on a failure".


                My new hero...


                This guy could have easily gone out and found a attorney/accounting firm on contingency-- and believe me these people would have pulled the books completely apart, and made all of those involved felons and embarrased at the same time. Forrest Gump was a huge, huge commercial success--and it made tons of money for the studio and all involved with the project... those who knew how to structure their deals that is. This author got defrauded--and still perhaps he has legal remedies, because this picture is still being distributed over the last decade, and has accumulated a vast paper/accounting trail to work with.

                It reminds me of the accounting firm my wife worked with during the 90's. They were pulling Walt Disney's books apart for the owner of the literary property Mary Poppins. What they uncovered (insider stuff that I learned) would blow your mind--but part of the deal that Disney required was that all this stuff be covered up in the settlement. They had to settle for millions.

                I'm just guessing, but the author of Forrest Gump could reap a multi-million dollar payment (in excess of 50 mil) with all the vid sales and so on down the line. The profits that this movie has generated has been astounding.

                Again criminal fraud as a normal way of doing business.

                Comment


                • #9
                  Re: More Hollywood Accounting Errors

                  Originally posted by Takezo View Post
                  Again criminal fraud as a normal way of doing business.
                  A trickle-down economy in its best. Wall Street steals trillions so ome waitress in Lower Manhattan could gets an occasional $1,000.00 tip; for every kid killed overseas in The Forever Wars someone gets a job of being a hero, for every spec we write and nobody cares about USPS or Adobe gets a chunk of the profit

                  The whole country is a fraud.
                  "The writer is the most important person in Hollywood, but we must never tell the sons of bitches." -- Irving G. Thalberg

                  Comment


                  • #10
                    Re: More Hollywood Accounting Errors

                    Dino De Leurentis (sp?) was once asked why he didn't make lower budget movies. His answer, "because you can't steal ten million dollars from a thirty million dollar movie." (this interview came out sometimes in the 70's).

                    Now the money is way, way beyond anyone could ever imagine. With films grossing 2 billion or more (like Avatar) during their life runs--the temptation is too great not to grift.

                    sT
                    Last edited by Takezo; 07-21-2010, 01:35 PM.

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