Wednesday, 1 February 2012

author economics

I've been meaning to post this for a while. You probably know that movie accounting practices are pretty baroque. Studios do all kinds of nonsense to pretend a film isn't making money - they 'loan' cash to a separate entity they have created to make the film, and the interest is a cost, and all kinds of blah, blah, blah. Maybe the following doesn't tickle your strawberries, but it really tickles mine.

Perhaps the most famous example is the case of “Buchwald vs. Paramount” in which Paramount claimed that the movie Coming to America, based on a Buchwald story, failed to reach profitability:

Art Buchwald received a settlement after his lawsuit Buchwald v. Paramount over Paramount’s use of Hollywood accounting. The court found Paramount’s actions “unconscionable,” noting that it was impossible to believe that a movie (1988‘s Eddie Murphy comedy Coming to America) which grossed US$350 million failed to make a profit, especially since the actual production costs were less than a tenth of that. Paramount settled for an undisclosed sum, rather than have its accounting methods closely scrutinized.

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