I read this article on Wikipedia the other day and found it quite amusing. As I’m currently studying for my MBA, I have to take a few accounting classes and suffice to say, the teacher never explained this to us!
I’ve known about not accepting net terms on a Hollywood contract ever since Freakazoid! told me not to way back in the day but the levels that it seems to go to are extreme. It’s safe to say that the major animation studios are involved, they too, after all, play in the same sandbox.
At one end, it is necessary, with so many fingers trying to grab a piece of the pie. At the other end, it is dishonest and misleading. Why distributors feel the need to secure a slice of the gross is beyond me, surely they’d be much happier with a flat fee thereby removing the risk element involved, no? It’s beyond me, but not beyond self-styled Hollywood Economist Edward Epstein. His blog provides a great insight into the financing machine that is the movie industry and is well worth a read.
I’ll elaborate more in a future post.