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Comment on What the AMPTP is refusing to grant the WGA vs. their profits

glockenspiel@lemmy.world ⁨10⁩ ⁨months⁩ ago

Revenue is used because this industry is notorious for “Hollywood accounting” to avoid having any actual profits to avoid residuals based on net.

Some of the biggesr blockbusters of all time are, thanks to Hollywood accounting, net losers. Forrest Gump is a classic example: it made almost a billion dollars in revenue vs a $55 million budget. But thanks to tax evasion techniques the movie is actually a huge financial loser on paper, losing more than $65 million if you look at net.

You can’t trust non-workers, who exist entirely off the wealth they can cheat out of workers, to be honest.

So that is why gross revenue is used in Hollywood.

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TWeaK@lemm.ee ⁨10⁩ ⁨months⁩ ago
Exactly this. The classic example:

Warner Bros Studios (WBS) wants to make a movie.

WBS license IP from Warner Bros Productions (WBP).

WBS hire sets and costumes from WBP.

WBS pays WBP for promotional marketing.

All workers are contracted with WBS, who is making the movie.

Movie brings in millions or billions in revenue to WBS.

It just so happens that all those things, IP, sets, costumes, marketing, well they all came to more millions and billions, which WBS now needs to pay WBP.

WBS operates at a loss, WBP gets all the profits.

The reality is much more complicated than that, but that’s the gist of it - and the Hollywood entertainment industry aren’t the only ones doing it anymore.
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- glockenspiel@lemmy.world ⁨10⁩ ⁨months⁩ ago
  Great breakdown! Given that this is Lemmy and we trend toward more tech focused, people might gel better with Apple and Microsoft. They both do this sort of thing, but Apple is well known for their Irish tax haven holding all of their IP and other rights so Apple can lease it back from themselves and account for pure profit as expenses. That’s also how Amazon pays little to no taxes. Or sometimes these company’s pay negative tax rates meaning they get government welfare to buy billionaires fudge rounds presumably, in conservative populist parlance.
  
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  - FlyingSquid@lemmy.world ⁨10⁩ ⁨months⁩ ago
    
    Big tech just doesn’t pay residuals.
    
    Although, as the chart shows, Apple is also a production company now, so it also needs to start paying residuals.
    
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billiam0202@lemmy.world ⁨10⁩ ⁨months⁩ ago
Hollywood accounting doesn’t apply to studios that are publicly traded, only their projects:

2022 profits

Disney (NYSE: DIS) $28.321 billion

Netflix (NASDAQ: NFLX) $12.447 billion

Warner Brothers Discovery (NASDAQ: WBD) $13.375 billion

Paramount Global (NASDAQ: PARA) $10.309 billion

NBC Universal/Comcast (NASDAQ: CMCSA) $44.951 billion

Amazon (NASDAQ: AMZN) $-2.722 billion

Sony (NYSE: SONY) "Almost $7 billion"

Apple (NASDAQ: AAPL) $99.8 billion

Some thoughts:

Some of these are obviously corporate figures and don’t necessarily reflect how well the production department of each corp is doing. Still, it reflects the fact that these corporations could easily (well, mostly) absorb the costs of what SAG-AFTRA/WGA are asking for.

Sony has all their fiscal year information published but not collated by calendar year, and I couldn’t be bothered to dig it up myself, so I just took their word for it.
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FlyingSquid@lemmy.world ⁨10⁩ ⁨months⁩ ago
That’s really interesting. Thanks for explaining that, it was something I was totally unaware of. Now I have changed my mind and I think the WGA listed the right numbers.

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2022 profits