Interesting breakdown of Movie/Music Accounting

[SirFozzie]

.. Man, this kind of shit would make Arthur Anderson and Enron blush.

First, the music side..

RIAA Accounting: Why Even Major Label Musicians Rarely Make Money From Album Sales | Techdirt

Now, this is understandable. Not good, mind you... but, well, there's a simple solution to that. Don't sign with a company that will be a parasite on you.

The other side, however, is blatant enough to make Enron blush.

'Hollywood Accounting' Losing In The Courts | Techdirt

Take the 2007 Harry Potter move ("Order of the Phoenix"). A near billion dollar seller, when you combine gross at the theater, DVD sales, PPV, Video on Demand, etcetera. How could you go wrong?

Well, according to Hollywood Accounting, they lost $167 million on it.

"How could that be? If a billion dollar movie loses hundreds of millions of dollars, who would make movies?" you may ask..

Well, that's because of the wonders of corporate trickery. They form a company specifically for the movie, and then charge themselves a huge "distribution fee" (in this case, 212 million and counting), to shift the profits.

Thankfully, this kinda shit is being challenged in the courts. Recently, Disney/ABC lost a $270 million judgement over Hollywood Accounting in a case against Celador, who made the show that basically saved the network, "Who Wants to Be a Millionaire". On a lesser side of things, on the very same day, Don Johnson won a verdict of $23 million against the creators of the show Nash Bridges, for similar tricks.

Hope this kinda stuff continues, and probably this kinda stuff won't end till several companies (and their executives) suffer an Enron-type meltdown.

[thesloppy]

This reminds me of the articles that come out every couple years implying that half the teams in NFL are losing money.

Ignore that we own the stadium, the practice facilities, the corporate offices, the local media company, the concessions company, and are charging ourselves massive amounts of rent, concession and advertising fees, shuffling around income from one shadow company to the next....but the team itself is going broke! Help us! Buy some tickets! Get a luxury box!

[Sun Tzu]

Good for Don Johnson.