It’s like how Peacock paid NBCUniversal $500M for The Office, even though Peacock is owned by NBCUniversal. Or how HBO Max paid Warner Bros $425M for Friends, even though HBO Max is owned by Warner Bros.
If a studio owns a streaming service, how exactly is that streaming service paying that studio for the content? Is the studio just paying itself? How exactly does that work and why do they have to do it?
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Imagine this scenario. I make a tv series and I’m owed syndication royalties for whenever it’s broadcast. Somebody needs to pay me to show the series and it doesn’t matter who the companies are. On a high level it may appear that NBCUniversal is paying itself, but the money is going from company A to company B so the people who are owed money by company B selling the rights can be paid.
Also, many companies will operate independently and just happen to be owned by a parent company. They still have to operate like any other company and send/receive money where it’s applicable. If I own two companies, for tax purposes at the very least I must show a transfer of money from one company to the other despite owning both entities.
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