Movie is created, but not marketed. The whole tax break thing is way over blown. It changes the numbers slightly, but doesn’t help them come out ahead of never

Movie is created, but not marketed. The whole tax break thing is way over blown. It changes the numbers slightly, but doesn’t help them come out ahead of never having made this. Using made up (but plausible numbers): Movie costs $100m to make. Plus $100m to market. You predict it will only make $120m. You haven’t spent that marketing money yet, so you have two options: * Throw the movie out, with the $100m it cost to make. A percentage of that reduces your taxable income by making you have less profit from your good movies. You loose $80m. * You take it to market. You have to do at least some sort of marketing, otherwise it will be a complete flop. You blow another $100m. Make $120m. You still loose $80m, but you tied up your capital for months and risked loosing it all if this actually went bust. Therefore, you choose option 1. It cuts the losses and allows you to immediately start on something else. ——- People love to throw around write offs like companies somehow make a profit off of a loss. In reality, a write off is only partially reducing a loss. It’s still a loss.