Is it possible Disney wanted Tomrorowland to fail for tax purposes? Two of their hugest movies (Avengers 2 and Episode VII) open this year. It couldn’t hurt to have a loss on the books to offset some of those piles of cash. Could it?
What’s better, having two money bins filled with cash and one tax writeoff, or three money bins filled with cash?
Besides, with Hollywood accounting, it’ll look like Tomorrowland is the only profitable film.
In { megacorp ∩ hollywood } accounting? I wouldn’t want to bet either way.
First of all, no, Disney didn’t want Tomorrowland to fail. Hollywood accountants can do magic, they don’t need to set out to make flops. And I haven’t seen Tomorrowland yet, but it sounds like they set up for a sequel.
Second of all, if we accept the proposition that Disney wanted Tomorrowland to fail, George Clooney would never have signed up for such a movie. He wouldn’t want to be associated with any big flops if at all possible, no big star with power would. On the unlikely chance that a big company would purposely make a flop, it would be filled with no-name actors who are just happy for any work and to get paid and whose career wouldn’t be hurt by the flop because they don’t have a big career yet.
Paper losses are good. Actual losses are bad. Star Wars is an example of the first. Ishtar, the second. No clue about Tomorrowland.
Anyone who thinks this doesn’t know the first thing about finance or taxes. Or maybe they stopped taking math classes in first grade.
Let’s phrase it this way: “Would Disney give me $100, if I give them $35 of it back?”
I run my own business,and hear the same all the time. “But it’s a business expense”. It’s still an expense (money out of my pocket), it just gets better tax treatment.
Seinfeld: “You don’t even know what a write off is…”
Kramer: “But they do…and they’re the ones writing it off.”
This is going to sound sarcastic but I appreciate the knowledge.
My touchstone for how extreme “losses” can get against phantom “profits” is JMS, who claimed - and I believe him - that he never saw a dime from B5 past his salary, because WB was writing off losses on completely different productions on another continent against B5 revenues.
Just like the films themselves, industry accounting is utterly disconnected from reality.