[pyre]

Hollywood doesn't claim that the blockbusters make a loss. They can't get that creative with their accounting to make millions/billions of dollars vanish from the IRS. What they do is shuffle the profits around between their sub-companies. Say you sign a contract with Universal Pictures to get 20% of the profits of the movie. Now Universal Pictures takes a loss on the movie by moving all of the profits to Universal DVD Distribution or some other company under the "Universal" umbrella. So that other corp has record profits, while the one you hold the contract with reports a loss. [ The money can be 'moved' between companies by just charging exorbitant prices for their services rendered. E.g. Universal DVD Distribution charges huge amounts of money to Universal Pictures for the DVD production. ]

[kjhghj]

My Big Fat Greek wedding, cost $3M to make, grossed $400M and made a loss!

Forest Gump made so much of a loss the writer refused to do a sequel since he didn't want them to lose money

But that's nothing compared to universal selling the DVD rights to spiderman for $1 to universal so that Stan lee didn't get a cut.

[pyre]

My point was that the money goes somewhere. They move things around through sibling corporations, so that if you have a contract for a percentage of profits with one of them, then they move the profits to another sibling corp that you don't have a contract with. It doesn't have to specifically be the DVD production/sales that they are moved around through.

[edanm]

I've never heard of this practice. Do you have any references for further reading?