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  #1  
Old August 17, 2019, 10:03 AM
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GordonJ GordonJ is offline
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Default Education. Mel Brooks-THE PRODUCERS, points, Hollywood and VooDoo economics...

A big YIKES to start today off. Why? A meeting yesterday with an IP CPA who has experience with films, plays, TV shows, etc.

I had questions, boy did I have questions, and found out I was only twice as ignorant as I thought I was about Hollywood "investments".

In business, I've been involved in investment opportunities, in fact, it was what I went to College to learn, but being a poor student and not paying attention, it didn't help much.

I know about groups, REIT's, RELP's, small partnerships...all that jazz. Founder stock, different classes who gets paid first when a start-up gets profitable and stays that way. Or even loans, collateral, and options, futures, factoring blah, blah, blah.

Now in Hollywood, they have POINTS. And at first blush, it looks simple enough, Talent gets some of the backend. I get that. Had those type of contracts while doing Remote Direct Marketing with ADS in force. As a copywriter I was often given the choice whether to take a smaller up front fee against the back ends. Can be sweet deals, if your copy works.

Enter Mel Brooks. Here is a brief description of THE PRODUCERS. (The movie original).

Down and out producer Max Bialystock (Zero Mostel), who was once the toast of Broadway, trades sexual favors with old ladies for cash contributions.

Max's new accountant Leo Bloom (Gene Wilder), offhandedly muses that if Max found investors for a new production that turned into a flop, he could legally keep all the extra money.

The duo begins to put together the worst play possible, titled "Springtime for Hitler", with a terrible director and a hippie-freak star.
.


I think the Hollywood of today, has installed this Idea into the main stream of making movies.

So, we read about guys like Robert Downey Jr. who makes MILLIONS on his back end "points", and still collecting Millions UP front. Not bad for a reformed drug addict, hope for all recovery people (well, the rich ones anyhow).

But what are the points and how are they figured I asked Mr. CPA Hollywood, and this is where

VooDoo economics comes into play. Could be from Sales (Box office plus other, which is in itself a whole nuther level), or from PROFITS, or from Gross here and there, or from after investor payouts, or a lot of other things.

SO, my YIKES, this morning.

I want to sell my scripts, for sure, but I'd like to participate in the "manufacturing Process" of a few of them, especially a TV show, and one of my stories, MAD MARY, NIGHT WOLF.

Selling a script can be pretty straight forward, it is IP, bought and sold all the time, it is when you get into the BACK ENDS of things, that it gets difficult.

There is the shoestring bootstrapper, just like in biz, think THE BLAIR WITCH PROJECT. A camera, some actors, and BOOM, a movie.

There are of course BIG BUDGET, Tony Stark needs another million, and those FRANCHISES don't have much trouble finding investors.

And everything in between.

I'm getting an education, and hopefully, solving my Hollywood problems in the direction of my goals.

Today, at least till I go out to lunch, I'm thinking, how about writing a report and selling it for a few bux, so much easier, simpler and with another Headlight Cleaning type manual, some pretty big bux to use.

One of the hardest problems, so much harder to get an idea in front of A REAL person WHO actually has the juice to get your ideas (scripts/Pilots) into the right hands of a decision maker.

In business, we can find someone at Apple, or MicroSoft or even Amazon (well maybe not Amazon) to pitch our idea too, or go on SharkTank or even MicroFund with groups.

But to get into the shark infested waters of Hollywood, being all fresh off the turnip truck and all, well,

YIKES.

Gordon

PS. Points. In football, basketball and even in cribbage, I get, Points in Hollywood (as a potential to an investor), YIKES.
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Old August 19, 2019, 03:02 PM
Dien Rice Dien Rice is online now
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Default The details of why Return of the Jedi still hasn't yet made a profit!

Quote:
Originally Posted by GordonJ View Post
VooDoo economics comes into play. Could be from Sales (Box office plus other, which is in itself a whole nuther level), or from PROFITS, or from Gross here and there, or from after investor payouts, or a lot of other things.

SO, my YIKES, this morning.

I want to sell my scripts, for sure, but I'd like to participate in the "manufacturing Process" of a few of them, especially a TV show, and one of my stories, MAD MARY, NIGHT WOLF.

Selling a script can be pretty straight forward, it is IP, bought and sold all the time, it is when you get into the BACK ENDS of things, that it gets difficult.
Hi Gordon,

I've read a little bit about Hollywood's "voodoo economics"...

Apparently getting a percentage of the PROFITS is not a good thing to do, because they can wave their voodoo wand (is there such a thing?) and make those profits disappear... So they don't have to pay you anything, if you have a percentage-of-the-profits deal, when the profits are zero...

Apparently, the thing to do is to get a percentage of the GROSS REVENUE (or equivalent), or something measurable which is much harder for them to change...

Profit is Revenue minus Expenses.

Where they can make the profits magically disappear is by adding to the expenses... Like the marketing budget. A great one is having to pay a lot for intellectual property rights.

Let's say Disney makes a Mickey Mouse movie. They may have Company 1 to make the movie, but another separate Company 2 owns the rights to Mickey Mouse.

If they get Company 2 to charge a ridiculously HUGE amount for Company 1 to use the IP rights to Micky Mouse, they're able to magically transfer all those profits from Company 1 to Company 2. That means, if you're being paid a percentage of the profits, it's... "Sorry man, we can't pay you. The movie made a huge loss!"

Harry Potter and the Order of the Phoenix was the sixth highest grossing movie of all time at the end of its run. However... it made a $167 million dollar loss!

The third Star Wars movie, Return of the Jedi, still hasn't made a profit!

The producers of the 1989 movie Batman didn't get paid a cent (until they went to court), because they had a pure percentage-of-the-profits deal... Warner Bros had waved their accounting wand to make the profits disappear... (They eventually settled out of court.)

A great article to read on this is Hollywood accounting on Wikipedia...

https://en.wikipedia.org/wiki/Hollywood_accounting

Best wishes,

Dien
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Old August 19, 2019, 04:27 PM
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GordonJ GordonJ is offline
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Default I could have saved time and money.

Quote:
Originally Posted by Dien Rice View Post
Hi Gordon,

I've read a little bit about Hollywood's "voodoo economics"...

Apparently getting a percentage of the PROFITS is not a good thing to do, because they can wave their voodoo wand (is there such a thing?) and make those profits disappear... So they don't have to pay you anything, if you have a percentage-of-the-profits deal, when the profits are zero...

Apparently, the thing to do is to get a percentage of the GROSS REVENUE (or equivalent), or something measurable which is much harder for them to change...

Profit is Revenue minus Expenses.

Where they can make the profits magically disappear is by adding to the expenses... Like the marketing budget. A great one is having to pay a lot for intellectual property rights.

Let's say Disney makes a Mickey Mouse movie. They may have Company 1 to make the movie, but another separate Company 2 owns the rights to Mickey Mouse.

If they get Company 2 to charge a ridiculously HUGE amount for Company 1 to use the IP rights to Micky Mouse, they're able to magically transfer all those profits from Company 1 to Company 2. That means, if you're being paid a percentage of the profits, it's... "Sorry man, we can't pay you. The movie made a huge loss!"

Harry Potter and the Order of the Phoenix was the sixth highest grossing movie of all time at the end of its run. However... it made a $167 million dollar loss!

The third Star Wars movie, Return of the Jedi, still hasn't made a profit!

The producers of the 1989 movie Batman didn't get paid a cent (until they went to court), because they had a pure percentage-of-the-profits deal... Warner Bros had waved their accounting wand to make the profits disappear... (They eventually settled out of court.)

A great article to read on this is Hollywood accounting on Wikipedia...

https://en.wikipedia.org/wiki/Hollywood_accounting

Best wishes,

Dien

Thanks Dien, the wiki thing is like what my CPA was saying, at a big dollar per hour rate. Wish there was a way to speed up real time talkers (who get paid by the minute) like the old cassettes on Chipmunk speed.

Maybe, I should get into accounting. Or just guerrilla my art, make a movie on my iphone, like others have done.

Gordon
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