Hollywood accounting practices are so notoriously shady that “Hollywood Accounting” has its own Wikipedia page. The gist of it is that if you make a deal for a percentage of a movie’s profits, make sure it’s for gross and not net, because studios will deny turning a profit on anything, even Return of the Jedi. Mel Gibson might have a simple explanation for why studios are so covetous and greedy vis a vis who they’re run by if he hadn’t been accused of the same thing himself.
The latest example of Hollywood Accounting comes from WB, who made 2007′s Harry Potter and the Order of the Phoenix. The film earned a reported worldwide gross of $938.2 million, but according to an accounting statement recently obtained by Deadline, the studio is still claiming a $167 million loss.
I ran the data by several attorneys and agents, who are so accustomed to seeing studio accounting wave magic pencils over hit movies that they weren’t surprised even a Harry Potter film that grossed nearly $1 billion would fall under the spell [magic? spell? I see what you did there...]. Dealmakers say studio distribution fees are a killer, as are incestuous ad spends on studios’ sister company networks. They also cited the $57 million in interest charges, an enormous pushback on profitability. Since Warner Bros didn’t invite in a co-financing partner on the Potter films, has the studio borrowed money from parent company coffers? Are they paying that interest to a bank, or to themselves? Bottom line: nearly $60 million in interest for the estimated $400 million required to make and market Harry Potter, charges carried for about two years, is a high tariff. [Deadline]
“Hey, remember that Harry Potter movie we made? Yeah, turns out you actually owe us money for that, sorry, dude. Anyway, you think you could pay by next Tuesday? AT&T says they’re gonna shut off my phone.”
I also love that businesses will claim anything as long as it suits them in a particularly situation, no matter how narrow, and completely ignore that claim’s application to anything else. “You know our highest grossing movie of the year? We actually lost money on that. Turns out we’re completely incompetent, lol!”
![[avatar]](http://p.uproxxcdn.com/global/images/default-avatar.jpg){kind=avatar}
![[image]](http://cdn.fd.uproxx.com/wp-content/thumbnails/130/110/2012/03/Jamie-Waylett-150x150.jpg)
![[image]](http://cdn.fd.uproxx.com/wp-content/thumbnails/130/110/2012/03/Project-x-Bikinis-150x150.jpg)
Voldemort: Harry Potter. You will loose…everything.
as are incestuous ad spends on studios’ sister company networks
*fap fap fap*
They should write in a new scene with a topless Hermione, that’ll really get eveyone’s mind off their millions of dollars in lost revenue.
nearly $60 million in interest for the estimated $400 million required to make and market Harry Potter, charges carried for about two years, is a high tariff.
Well, I’m glad Discover Card isn’t only fucking me with usury-like interest rates.
It also turns out that Emma Watson’s cup size has actually shrunken.
Does Hollywood bank with Chase?
Or a topless Rupert Grint, I’m good either way.
*unbuckles belt, drops pants to the ground*
Hey, how did those get there?
Pablo the Chihuahua Accountant can make all ju monee prahlems desaparézcase, ese.
I wish I could say I’m amazed that DVD sales are itemized as “Video Cassette”, but I’m not. WB spends more on designer cocaine trays than on accounting software.
I really felt like the impromptu “Springtime for Voldemort” musical number would have made a terrific DVD extra…
If the IRS starts asking questions WB accountants will claim that they were under a Confundus Charm the entire time
*Warner Brothers accountant walks into Burger King*
“Hello, yes, I would like a Whopper with cheese value meal with a Diet Coke”
Cashier: Would you like to King size that for a dollar?
“Why yes, that sounds like a great deal. Thank you!”
Cashier: You’re quite welcome. Your order comes to $6.97. Will that be for here or to go?
“I’ll eat the food here, but I’d like the money to go, please. How about I give you three cents and you just give me an even $7?”
Cashier: Sir? You have to pay us $6.97 for the food, not the other way around. We don’t pay you to eat our food.
“well I don’t possibly see how you can make money that way, but ok. Here’s my studio expense accound card”
*cashier runs the card, it is declined*
Cashier: sir, I’m afraid your card has been declined. The reader says that you owe yourself $60 Million and that the card can’t be reactivated until you pay yourself back.
“Are salt packets still free?”