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
You’ve heard the term “don’t throw good money after bad?” The studio has spent who knows how much money already but now believe that the film won’t be successful. In order to promote and distribute the film they will have to spend additional millions of dollars which they already know they won’t be seeing back. Rather than spending more money, they kill the film and take the already spent money as a loss and can use that loss as a tax benefit to recoup at least some of the money that’s already gone.
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