They’ve just cancelled their upcoming film “Coyote vs. Acme,” and everyone is calling it a tax write-off, just like they did with the cancelled Batgirl film.
Having spent so much on the production of these films, how is it beneficial to them to cancel the film outright? What is a tax write-off in that sense?
In: Economics
When you are a business you write off everything you spend to earn revenue. If you spent $10 to make $20 in revenue, then you only pay tax on $10. They get to write off what they’ve spent making the film.
From what i gather, the write off is simply more valuable to them then anyone is willing to give them for the film. They’ve reportedly spent $72m to make it and wanted 75-80 for it. nobody will give them that and they want to get the film off of their balance sheet.
They save $30m in taxes just to cancel it.
Let’s remember that WB is a public company and has to report their earnings to shareholders. So even though they are losing money, they must feel like it benefits their balance sheet for the upcoming quarter and long run more than continuing to explore options for the film does.
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