Last summer, Deadline released this balance-sheet ("participation statement") detailing the alleged financial state of the corporate entity struck to run the Warner Bros movie "Harry Potter and The Order of the Phoenix." The movie, which had grossed nearly $1B at the time, was nevertheless running $167M in the red. The losses are largely attributable to to prints and advertising/marketing -- and, as many commenters on the original post point out, a major recipient of that marketing budget would have been Warner's itself, in the guise of its other media divisions. Another culprit is high interest fees, though the film didn't have outside financing, so Deadline speculates that the loan note was also held by Warner's.
The original post holds this out as an example of why only a fool accepts "net-participation" compensation for work associated with a film, but I think this is also a great example of why all financial numbers released by the entertainment industry should be treated as fiction until proven otherwise. Especially piracy "loss" figures, alleged contributions to national GDP, and job creation numbers.
As one dealmaker tells me: "If this is the fair definition of net profits, why do we continue to pretend and go through this charade? Judging by this, no movie is ever, ever going to go to pay off on net participants. It's an illusion to make writers, and lower-level actors and filmmakers feel they have a stake in the game."
And yet Warner Bros isn't doing anything differently here than is done by every other studio. Clearly, nothing has changed since Art Buchwald successfully sued Paramount over the 1988 hit Coming to America when the subject of net participation was scrutinized, and a judge called studio accounting methods "unconscionable".
STUDIO SHAME! Even Harry Potter Pic Loses Money Because Of Warner Bros' Phony Baloney Net Profit Accounting
A judge in Canada today granted $10 million bail for Meng Wanzhou, the CFO of China electronics giant Huawei. She has to remain in the Vancouver area, where she has a home. The United States has requested her extradition. China is not happy. Huawai’s response follows. .
That massive data breach that hit hotel group Marriott? Now there are clues the hackers behind it were working for a Chinese government intelligence gathering operation.
Tumblr will ban ‘female-presenting nipples’ and other content beginning December 17, 2018. Photographer and writer Nate ‘Igor’ Smith is a longtime Tumblr user whose work straddles the boundaries of art, editorial, and adult. Here, Nate explains why Tumblr’s decision to censor is devastating for the Tumblr’s longtime users, and the rest of us. — XJ […]
For the true audio enthusiast, there’s a lot of difference between putting on some songs “for background music” and a true listening experience. For the latter, there’s nothing like a pair of sturdy headphones and the powerful speakers that come with them. And the wireless variety doesn’t get much more powerful than the TREBLAB Z2 […]
Digital or analog, there’s a path of least resistance for any project. Finding that path is what the Agile methodology is all about, which is why proficiency in it is a must for any project management position – and the paycheck that comes with it. And the quickest path to learning Agile? The Agile Project […]
Everybody’s flown a paper airplane. But what if you could fly on a paper airplane? Until we invent shrink-ray technology, the PowerUp X FPV Video Paper Airplane Kit will have to do – but it’s as fun as that sounds and more. The original version of this creative toy added drone tech to the old, […]