Making a fake movie to understand Hollywood’s shady accounting

[Ed Gordon]

For years there has been a deliberate practice among Hollywood studios to use tricky accounting and tax loopholes to make it seem like many movies they make end up as losses. Exempting them from paying taxes on production costs, and getting them out of profit sharing deals with actors and directors. But how do these tax loopholes and accounting tricks work? And should we try to close them?

Max Bialystock has moved from Broadway to Hollywood.

[Bobby Henderson]

It's the old "rolling break even" game. More than just the movie industry does it. The music industry is infected even worse. Many music artists don't see a dime from their album or streaming sales; they have to make a living by touring and selling merchandise. The music labels are trying to get as much of that money as possible too.