Harry Potter/Order of the Phoenix: grosses over $900 mil, loses $167 mil

[thewayne]

Hollywood has had shady accounting practices for ages, everyone has known this. Peter Jackson had to sue New Line to get paid. Well, two things have changed. A detailed cost chargeback breakdown for Order of the Phoenix was leaked showing how Warner Brothers charged fees to the movie for services that were done in-house. The other change is that Who Wants To Be A Millionaire and Nash Bridges (and probably others) sued and won, the juries deciding that the Hollywood accounting system is hopelessly screwed up and it is so far beyond reasonable that a show/movie that grossed upwards of a billion dollars could lose millions.

Basically Hollywood has been setting up dummy corporations with the purpose of losing money, sounds sort of like what Goldman Sachs did with betting that funds would lose money.

http://www.techdirt.com/articles/20100708/02510310122.shtml

http://entertainment.slashdot.org/story/10/07/09/1621218/Hollywood-Accounting-mdash-How-Harry-Potter-Loses-Money

There's a great comment in the Slashdot comments: "It's been the standard for years, and it's been one of the things that really pisses me off, that while the MPAA is going after movie pirates claiming theft, their members have been stealing money from investors and the tax man for decades. Even where the contract stipulates a percentage of gross, dirty tricks have been used to screw over directors, actors and other investors. The only reason most of Hollywood's accountants and producers aren't rotting in jail for embezzlement is because the movie industry has been this walled garden for many decades, seen as to valuable to peel back the layers to discover the crooks running the show."

Comments

[silveradept]

That's corporations at their finest. I would hope, now that they know, that SAG and the other unions involved in films and TV all demand correct accounting practices and audits so that their workers get fairly compensated.