How does “Hollywood accounting” work?
In: Economics
The actors in Bones sued over this recently. They are entitled to a percentage of money for reruns of the show. Fox owns the show and a channel that wanted to show reruns of it. So Fox licensed the reruns to the channel for free. So the actors got a share of nothing. But Fox gets the revenue from the channel so they make the money from the reruns.
Lets say big movie studio like Warner Bros wanted to make Forrest Gump 2. They would make an ‘on paper’ company (to make the movie) called ‘Forrest Gump 2 Movie Company’ then charge anything they wanted to the Forrest Gump company. Basically huge fees and although the film is a smash hit, they (Warner Bros) can make it look like it has not made a cent in profit because Forrest Gump 2 company still owes them money.
That’s how actors etc can be in a profit share contract of a huge movie but not see a penny from their profit share cut
Latest Answers