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> So the studio doesn’t want to do this, it’s just less bad. Less bad than what? Apologies if it was outlined in the article, I can't get it to load over my cr

• prepend 3y ago
  It’s less bad than losing everything. For example. Let’s say the movie costs $100 to make. And they value the movie at $100 based on future sales. And they have $1000 in profit from other stuff they do. So the cost of$100 and value of $100 offset each other so they pay taxes on the full $1000. Tax rate is 21% so they pay $210 and keep $790. But if they write off the value to zero that means they have a $100 loss. So you subtract that from the $1000 of profits and pay taxes on $900. Thats $189 in taxes. You subtract that from $1000 and keep $811. So if they don’t write it off in scenario1 they keep $790, but if they write it off they keep 811. They still spent $100 and made nothing so that’s bad. But they are able to keep an extra $21 so really only lose $79. Losing $79 is less bad than losing $100.