The weird thing about Hollywood accounting is that for the studio to make the most money possible it has to simultaneously demonstrate that a film made a lot of money at the box office (read: it's a hit) and at the same time try to ensure that on the books it never turns a profit. They need the "hit" status because that helps them command top dollar when selling the film to television, etc. They also need the film to stay in the red or make minimal profit "on the books" for tax reasons and to avoid paying out "participation" to people who get a cut of the profits.
Sausage making...it's an ugly business.
Sausage making...it's an ugly business.
