Zombies, Ghosts & Hollywood Accounting: Intangibles and Intellectual Property Strategies
in INTELLECTUAL PROPERTY STRATEGIES IN A GLOBALIZED WORLD (Alexandre Quiquerez & José Augusto Fontoura Costa eds., 2-18, Forthcoming)
31 Pages Posted: 31 Aug 2018 Last revised: 11 Oct 2018
Date Written: August 29, 2018
Film and television projects are frequently not profitable, at least as defined contractually in characteristic industry contracts. The “Hollywood accounting” treatment that generates these outcomes is both curious and often complex. Even highly successful film and television projects, from the films Star Wars: Return of the Jedi and Harry Potter and the Order of the Phoenix to television programs such as Who Wants To Be A Millionaire?, The Walking Dead, and Supernatural, which have all grossed significant amounts of revenues, have all been characterized as generating no profits, at least as defined in industry contracts, which has significant consequences for those entitled to profit participations. Contractual entitlements to a percentage of profits of course depend on having profits to begin with. Firms in the film and television sector have significant flexibility in how they characterize both revenues and costs. This flexibility is in part a consequence of the high degree of intangibility in that pervades film and television businesses. Practices within the industry also typically involve significant business dealings within entertainment industry corporate umbrellas. How revenues and costs from such intra-group transactions are accounted for has been a key source of a number of disputes. Disputes surrounding profit definitions in film and television highlight both the impact of intangibility and contract interpretation within the creative industries more generally.
Keywords: Intangibles, Legal Framework, Accounting, Hollywood, Movies, Film, Television, Net Profits
JEL Classification: K20, K40, M41
Suggested Citation: Suggested Citation