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It has been mentioned that the studios make a blockbuster or two, but then have several 'duds' that fail to make money. But that isn't the issue. I don't think the government cares about whether a movie makes a huge profit or not - the movie cast and crew do.
What should happen is that the studio pays taxes on the overall profits of the studio - as all companies do - with profits and losses summed together.
What should also happen is that contractually the losses from a different movie should never engage the profits of a contracted movie. That is an illegal move, and should be investigated completely.
If someone works for me and I contract out 10% of the profits on one product, and that does very well, I can't turn around and say 'Oh, these 7 other product ideas didn't fare well, and so the company has no profit this year - you don't get your money.' As for the company, overall I would lose money, and not have to pay taxes on any profitable items seeing as the overall net is negative.
That is contract fraud. Now, I'm sure the Hollywood types are quite adept at the legal wrangling needed to rob everyone, but it should still be an issue.
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[–] tidy_athiest ago
I don't get how that can be possible.
It has been mentioned that the studios make a blockbuster or two, but then have several 'duds' that fail to make money. But that isn't the issue. I don't think the government cares about whether a movie makes a huge profit or not - the movie cast and crew do.
What should happen is that the studio pays taxes on the overall profits of the studio - as all companies do - with profits and losses summed together.
What should also happen is that contractually the losses from a different movie should never engage the profits of a contracted movie. That is an illegal move, and should be investigated completely.
If someone works for me and I contract out 10% of the profits on one product, and that does very well, I can't turn around and say 'Oh, these 7 other product ideas didn't fare well, and so the company has no profit this year - you don't get your money.' As for the company, overall I would lose money, and not have to pay taxes on any profitable items seeing as the overall net is negative.
That is contract fraud. Now, I'm sure the Hollywood types are quite adept at the legal wrangling needed to rob everyone, but it should still be an issue.