That seems an incredibly generous description (or breathtakingly naive, but I'm giving the benefit of the doubt because hopefully most people aren't that credul

That seems an incredibly generous description (or breathtakingly naive, but I'm giving the benefit of the doubt because hopefully most people aren't that credulous). The point of Hollywood accounting is to intentionally create enough inflated expenses (billed from companies controlled by the studios or related parties of the producers etc.) to ensure that the net profit is zero or less, even when the film actually generated a lot of income. It's true that tax gets paid eventually (and somewhere, maybe a tax haven) but it is intentionally creative accounting designed to minimise tax and screw people out of their royalties.