Why are there 3 or 4 studios/production companies listed at the beginning of movies? After a major studio there will be several others (ABC Films, XYZ Pictures). Do the major studies need “help” making movies?
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A part of this is “Hollywood Accounting”
In simple terms:
The main studios set up subsidiaries and holding companies and those companies nominally produce the film. The subsidiary is the legal entity carrying risk, this shields the main company from a lot of risk from lawsuits and other risk events.
The main company then “leases” it’s studios, staff, equipment, etc etc to the subsidiary to make the the film, and then the subsidiary has to repay them.
The leasing terms and rates then result in all the profits ending up with the main company while the subsidiary perpetually owes money until it is eventually disbanded/dissolved once it’s no longer useful.
A notable example is that Star Wars:Return of the Jedi, a **massively** successful film has, on paper, still not made a profit despite collecting over $400 million at the box office from a film that cost about $32 million to make. This is not an isolated example.
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