Movie Accounting
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Movie Accounting
By Steven Anderson
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Movie Accounting
By Steven Anderson
MGMT 505
MGMT 505
* Contents
1. Introduction
2. Movie Life Cycle in Business Terms
2.1. The Pitch – Literary Property
2.2.2. The Budget as an indicator of revenue
2.3. Principle Photography
2.3.1. Completion Guarantor
2.4. Post-Production
2.4.1 Negative Cost
2.5. Distribution
2.5.1. Distribution Expenses
2.5.2 Theatrical Distribution
2.5.3 Non-Theatrical
2.5.3 Pay –TV
2.5.4 TV
2.5.5 Merchandise, Music, etc.
2.6 Participation
2.7 Net Profits
2.7.1 Net profit by GAAP Method – SOP 00-2
2.7.1.1 Capitalization of Costs
2.7.1.2 Income Recognition
2.7.1.3 Film Amortization
2.7.2 Net Profit used for tax purposes
2.7.3 Net Profit used for Profit Participants
2.7.4 Net Profit for internal use and Equity Holders
2.8 The Audit
2.9 End of Movie cycle
3. Issues over accounting practices.
3.1 The budget valuation and its effect on the bottom line
3.1.1 Incentive to make budget bigger to make more money?
3.2 Negative Cost and its effect on the bottom line
3.2.1 Abandoned Projects
3.2.2 Fringe Benefits
3.2.3 Participants and deferments
3.3 Distribution expense
3.4 Profit Sharing Contracts and Fairness for net point players
3.4.1 History of Profit Sharing Contracts.
3.4.2 Gross Point contracts
3.4.3 Net Point Contracts
3.4.1 Buchwald vs. Paramount Case
3.5 Who is responsible for the success of the movie?
* *
Movie Accounting
1.1. Introduction:
Hollywood has long been a love obsession of Americans. Since the nickelodeons of early 1900s to the major blockbusters of the summer, going to the movie theater has always been an American pass time. At the same time, Hollywood is synonymous with the idea of wealth and money. The movie stars get paid millions of dollars per movie. Executive
Movie Accounting
By Steven Anderson
-------------------------------------------------
Movie Accounting
By Steven Anderson
MGMT 505
MGMT 505
* Contents
1. Introduction
2. Movie Life Cycle in Business Terms
2.1. The Pitch – Literary Property
2.2.2. The Budget as an indicator of revenue
2.3. Principle Photography
2.3.1. Completion Guarantor
2.4. Post-Production
2.4.1 Negative Cost
2.5. Distribution
2.5.1. Distribution Expenses
2.5.2 Theatrical Distribution
2.5.3 Non-Theatrical
2.5.3 Pay –TV
2.5.4 TV
2.5.5 Merchandise, Music, etc.
2.6 Participation
2.7 Net Profits
2.7.1 Net profit by GAAP Method – SOP 00-2
2.7.1.1 Capitalization of Costs
2.7.1.2 Income Recognition
2.7.1.3 Film Amortization
2.7.2 Net Profit used for tax purposes
2.7.3 Net Profit used for Profit Participants
2.7.4 Net Profit for internal use and Equity Holders
2.8 The Audit
2.9 End of Movie cycle
3. Issues over accounting practices.
3.1 The budget valuation and its effect on the bottom line
3.1.1 Incentive to make budget bigger to make more money?
3.2 Negative Cost and its effect on the bottom line
3.2.1 Abandoned Projects
3.2.2 Fringe Benefits
3.2.3 Participants and deferments
3.3 Distribution expense
3.4 Profit Sharing Contracts and Fairness for net point players
3.4.1 History of Profit Sharing Contracts.
3.4.2 Gross Point contracts
3.4.3 Net Point Contracts
3.4.1 Buchwald vs. Paramount Case
3.5 Who is responsible for the success of the movie?
* *
Movie Accounting
1.1. Introduction:
Hollywood has long been a love obsession of Americans. Since the nickelodeons of early 1900s to the major blockbusters of the summer, going to the movie theater has always been an American pass time. At the same time, Hollywood is synonymous with the idea of wealth and money. The movie stars get paid millions of dollars per movie. Executive
Cited: Hollywood by the Numbers. (2006, Feb 26). Retrieved December 05, 2012, from The Smoking Gun: http://www.thesmokinggun.com/file/5000-samuel-l-jackson-golf-allowance?page=2 The Avengers. (2012, December 05). Retrieved December 05, 2012, from Box Office Mojo: http://www.boxofficemojo.com/movies/?id=avengers11.htm Bill Daniels, D. L. (2006). Movie Money 2nd Edition. Los Angeles: Silman-James Press. Cones, J. W. (1997). The Feature Film Distribution Deal. Carbondale: Southwestern Illinois University Press. Lyman, R. (2001, December 12). New Line Gambles on 'The Lord of the Rings ' Trilogy. Retrieved December 05, 2012, from New York Times Online: http://www.nytimes.com/2001/12/12/movies/12LORD.html Masnick, M. (2010, July 08). 'Hollywood Accounting ' Losing In The Courts. Retrieved December 05, 2012, from Tech Dirt: http://www.techdirt.com/articles/20100708/02510310122.shtml Moore, S. M. (2002). The Biz - the Basic Business, Legal and Financial Aspects of the Film Industry 2nd Edition. Los Angeles: Silman-James Press. Winestein, M. (1998). Profit-Sharing Contracts in Hollywood: Evolution and Anaysis. Journal of Legal Studies.