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Warner Bros shelves finished ‘Coyote vs. Acme’, takes $30M tax write-off

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Re: Warner Bros shelves finished ‘Coyote vs. Acme’, takes $30M tax write-off

#91

Post by fzeroracer »

crazygringo wrote: post #70
fzeroracer wrote: post #19

Frankly I'm of the increasing opinion that if you do a tax write off on a creative work that you should be required to put it into the public domain. You've already made it clear that you believe that the value you would gain from it is $0, ergo it doesn't make sense to let companies vault content forever once written off. For example, a bunch of TV series were written off last year, which means that content has been…

I understand where you're coming from, but it's just not tenable. First of all, a lot of these creative works are ultimately unfinished. Are you really supposed to release the superhero movie without half the CGI, with some of the scenes in front of green screens? Without a soundtrack? What's the point? And secondly, even when they are finished, what about when they're just bad ? If something simply doesn't work crea…

I don't really care about bad work being released; there are plenty of awful works that were released to the public domain.

In this scenario, companies are permanently shelving work that has value. Infinity Train for example was made a tax write-off, which means the creator can never continue it and people can never watch it. The negatives of some bad work being released is not outweighed by the amount of good work that has been destroyed by the current system.

If you want to argue about artistic control, then you need to come up with a solution to the above. The status quo is unacceptable, so let's see what you got.

Re: Warner Bros shelves finished ‘Coyote vs. Acme’, takes $30M tax write-off

#92

Post by cyanydeez »

upon_drumhead wrote: post #2

Can someone explain how this makes any sense at all? They burned 70 million on making the movie and they'll recoup 30 million in tax write-offs, but if they released it, it's pretty certain to make way more than 30 million. And the claim that they're cash strapped after making 1.4 billion on barbie? I just don't understand this at all. Does anyone?

movie accounting makes these numbers mostly meaningless. it's possible everyone involved got their money back and the write off amount is the bagholders

Re: Warner Bros shelves finished ‘Coyote vs. Acme’, takes $30M tax write-off

#93

Post by cyanydeez »

prepend wrote: post #12
upon_drumhead wrote: post #2

Can someone explain how this makes any sense at all? They burned 70 million on making the movie and they'll recoup 30 million in tax write-offs, but if they released it, it's pretty certain to make way more than 30 million. And the claim that they're cash strapped after making 1.4 billion on barbie? I just don't understand this at all. Does anyone?

It basically means they don’t think they’ll make less than that if they would release. So they’d rather have $30M immediately (since 2023 is almost over) than release and have to perform accounting over the life of the film plus supplemental (streaming, other licenses) that they expect would result in less than $30M when all is said and done.

probably because they'd need to borrow money and inflation and interest rates probably projected higher than residual income.

Re: Warner Bros shelves finished ‘Coyote vs. Acme’, takes $30M tax write-off

#94

Post by fzeroracer »

djaro wrote: post #55
adhesive_wombat wrote: post #22

Earlier quoted context omitted.

Yes. And remember, while this may sound unfair ("why should I be forced to give away X by the gubbermint?!"), the company is also free to not take the tax write-off at all and just shove the whole thing into a wood chipper. If they want society to subsidise their successes, they shouldn't get to hoard the rest. And that's before we get into all the tax breaks, copyright shenanigans and chicanery that also subsidises…

You clearly don't understand tax write offs. How would they "not take the tax write off"?? The tax write off is the expenses they made while creating the film. There is no way for them not to write it off, after the expenses have been made. If they earn $100 and then spend $100, they have to write it off, because they no longer have the money, so they can't pay taxes on it.

No, the tax write-off in this situation is the company saying that they will never release or profit off something ever again. This allows them to artificially reduce the value of their asset to 0.

Re: Warner Bros shelves finished ‘Coyote vs. Acme’, takes $30M tax write-off

#95

Post by cyanydeez »

QwertyPi wrote: post #10
HlessClaudesman wrote: post #6

Earlier quoted context omitted.

You are making an assumption that this film would attract / retain more than 30 million worth of subscriptions.

The vast majority of movies—let alone the ones worth watching—are not on streaming platforms, so I don't understand why you'd expect this to be the payoff route. Movies are still "sold" (i.e. leased) both directly to consumers and to streaming platforms—presumably for a studio that's still the way they make money.

if they need a load, inflation and interest rates are probably going to eat that profit horizon.

I'd bet you're going to see this more often.

Re: Warner Bros shelves finished ‘Coyote vs. Acme’, takes $30M tax write-off

#96

Post by crazygringo »

fzeroracer wrote: post #91
crazygringo wrote: post #70

Earlier quoted context omitted.

I understand where you're coming from, but it's just not tenable. First of all, a lot of these creative works are ultimately unfinished. Are you really supposed to release the superhero movie without half the CGI, with some of the scenes in front of green screens? Without a soundtrack? What's the point? And secondly, even when they are finished, what about when they're just bad ? If something simply doesn't work crea…

I don't really care about bad work being released; there are plenty of awful works that were released to the public domain. In this scenario, companies are permanently shelving work that has value. Infinity Train for example was made a tax write-off, which means the creator can never continue it and people can never watch it. The negatives of some bad work being released is not outweighed by the amount of good work t…

> The status quo is unacceptable, so let's see what you got.

Please don't be snarky or have attitude like that.

Anyways, if you'd like to know, the specific Infinity Train example (as well as Westworld etc.) have to do with a very specific write-off opportunity that occurs in a limited time frame when a corporate merger occurs -- in this case, HBO with Discovery. I'm not familiar with the specifics, but if you want to fix something, I'd suggest looking at this particular merger tax write-off loophole (?).

It would seem to be a result/problem of that very specific accounting move in merger situations only. It's not a problem with write-offs in general.

Re: Warner Bros shelves finished ‘Coyote vs. Acme’, takes $30M tax write-off

#97

Post by clouddrover »

unsupp0rted wrote: post #51
clouddrover wrote: post #13

Earlier quoted context omitted.

They'd probably need to spend another $70-$100 million promoting it. So they need to get let's say $170 million returned to the studio to break even. The judgement must be that they won't achieve that. For example, Indiana Jones and the Dial of Destiny failed commercially at the box office: https://www.the-numbers.com/movie/Indiana-Jones-and-the-Dial... Disney spent $300 million making it and will have spent at least…

It wasn’t budget discipline that was the main problem. Indiana Jones 4 didn’t need budget discipline. The main problem was that Indiana Jones 5 was following 4, and both were laughably bad at being quality Indiana Jones-level movies. The general audience knew in advance what they were getting wasn’t going to be exciting and they didn’t want it. The hardcore fan audience also knew what they were getting: old-man Indie…

> Indiana Jones 4 didn’t need budget discipline.

It absolutely did. With budget discipline they would have made a better, more Indiana Jones movie. The direct result of having too much money available was that they stuck all manner of pointless garbage in the film and made it worse.

Adjusting for inflation, Indiana Jones 3 had less than half the budget of Indiana Jones 4 and is the better movie with the bigger box office.

Re: Warner Bros shelves finished ‘Coyote vs. Acme’, takes $30M tax write-off

#98

Post by stavros »

rtsil wrote: post #31
Mindwipe wrote: post #15

Earlier quoted context omitted.

> but if they released it, it's pretty certain to make way more than 30 million. It's pretty unlikely this film will make $30 million, and they would have to spend at least another five to ten million to release it (profit participation from talent, marketing (which is probably contractually obligated), finalising post production, mastering, distribution etc etc.). The effects work is nowhere near done etc. > And the…

> and they would have to spend at least another five to ten million to release it That's very optimistic. P&A (print and advertising, but since movies are now released in digital copies, the print part has become negligible) usually is between half and 100% of the production budget.

Wait, how is advertising 100% of the budget? Surely you need to also make a movie?

Re: Warner Bros shelves finished ‘Coyote vs. Acme’, takes $30M tax write-off

#99

Post by fzeroracer »

crazygringo wrote: post #96
fzeroracer wrote: post #91

Earlier quoted context omitted.

I don't really care about bad work being released; there are plenty of awful works that were released to the public domain. In this scenario, companies are permanently shelving work that has value. Infinity Train for example was made a tax write-off, which means the creator can never continue it and people can never watch it. The negatives of some bad work being released is not outweighed by the amount of good work t…

> The status quo is unacceptable, so let's see what you got. Please don't be snarky or have attitude like that. Anyways, if you'd like to know, the specific Infinity Train example (as well as Westworld etc.) have to do with a very specific write-off opportunity that occurs in a limited time frame when a corporate merger occurs -- in this case, HBO with Discovery. I'm not familiar with the specifics, but if you want t…

I proposed a solution and your best argument was 'what if it was bad'. Your argument had no substance to it. You're arguing about artistic control when the artists are literally not the one in control, it's the businesses making a decision to take away art from them.

And the Infinity Train example has nothing to do with a specific loophole, it is how tax write-offs work. It was done because the merger saddled Warner Bros with debt which it sought to rectify by reducing its tax burden as much as possible through devaluation of assets. The only 'loophole' is that companies have to pay taxes on assets gained during a merger. So to avoid this companies write off their assets to say their value is $0, reducing their total tax burden. But the core problem is still the fact that they can say that their asset is worth $0 and shelve it forever.

Re: Warner Bros shelves finished ‘Coyote vs. Acme’, takes $30M tax write-off

#100

Post by rtsil »

stavros wrote: post #98
rtsil wrote: post #31

Earlier quoted context omitted.

> and they would have to spend at least another five to ten million to release it That's very optimistic. P&A (print and advertising, but since movies are now released in digital copies, the print part has become negligible) usually is between half and 100% of the production budget.

Wait, how is advertising 100% of the budget? Surely you need to also make a movie?

If you have a $200M movie, you'll need to spend $200M in advertising as well.
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