Hollywood Accounting is the interesting (shady) practice, where a movie will purposely lose money, on paper, to avoid paying royalities. Famous examples of Hollywood Accounting include The Return of the Jedi and Forrest Gump. So What is Hollywood Accounting? In this practice, when a studio is producing a movie creative accountants working will set up the movie as it's own company. The company then charges everything back to the studio (which is making the movie, just not on paper) Then at the end when the credits roll and the ticket revenue rolls in, it doesn't cover what was charged internally, and so makes nada! But in reality the movie made millions. Hollywood Accounting, or rather, how movies purposely make nothing at all.
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