Hollywood Accounting Runs Out the Clock

Warner Bros. Entm’t Inc. v. Superior Court, No. B289109 (D2d8 Nov. 20, 2018)

Actors and other talent sometimes get an interest in the “profits” to movies and TV shows. Unless you've got huge juice, however, “profit” does not mean actual profit, like how the IRS or Scrooge McDuck would calculate it. “Profit,” instead, is contractually a defined term that permits a studio to deduct all sorts of “costs.” Under this Hollywood accounting, projects that made large amounts of money wind up being in the red forever, at least so far as the accounting for the participation interests of the talent go.