For example- I looked at The Mummy (2017) on Wikipedia, which had a budget of $125-195 million, and grossed $410 million worldwide at the box office, yet it also says the studio lost $95 million. How is that possible?
In: 99
They do what is called Hollywood accounting. This is where you make sure a movie makes a loss without actually making a loss.
One of the easiest ways that they apparently do it is through promoting the movie. The company that they will use to advertise the movie will be a separate company but owned by the same people who own the movie. They then charge a stupidly high amount of money to advertise the movie. This is usually counted as an extra expense outside of the movie’s budget. So this can be used to greatly reduce how much a movie makes even though the company (companies) involved actually spent very little money compared to what they are claiming. It’s just their own money moving through different bank accounts and being written off as an expense.
Other ways are that they charge costs from other movies to ones that they need to lose money.
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