Slate: How Major Movies are Financed

Slate has an amazing story (How to Finance a Hollywood Blockbuster) about how the movie studios use international tax law to help offset the financial risk in making a movie.

As paradoxical and absurd as it sounds, it's cheaper for a Hollywood studio to make a big-budget action movie than to make a shoestring art film like Sideways. Consider Paramount's 2001 action flick Lara Croft: Tomb Raider. On paper, Tomb Raider's budget was $94 million. In fact, the entire movie cost Paramount less than $7 million. How did the studio collect over $87 million before cameras started rolling?

Almost makes me with I went to law school or paid more attention in my accounting classes.

Comments

This article just goes to show how Hollywood LIES. If you believe that films costs $100 million to produce, you are surely an idiot. Being that the average film doesn't make $100 million, there is NO WAY that a studio is going to allow films to get such high budgets. Let's use TOMB RAIDER as an example. If it did cost $90 million to make, but did not make back $90 million, do you think a sequel would have been made? Even if it made some money on video, it is still not worth a risk. Come on. Hollywood knows people believe anything. And they do, unfortunately.