Movie Money: Understanding Hollywood's (Creative) Accounting Practices, 2nd ed.

The distribution of a motion's picture's "profits" is, for most filmmakers, a murky, labyrinthine domain ruled by studio/distributor accountants and lawyers. "Movie Money" unravels, demystifies, and clearly explains the film industry's unique, arcane creative accounting practices. It examines a film's various revenue-consuming components and presents numerous film-industry definitions of gross and net profits and the many ways in which these figures are calculated. It also provides in-depth discussions of various aspects of profit participation terminology, accounting practices, and deal practices along with chapters on audits, claims, and negotiating tips and tricks. This Second Edition greatly expands the first edition's coverage of basic cable providers and new rulings regarding motion picture industry financial reporting practices and new material on vertical integration (i.e., studio self-dealing).

When columnist Art Buchwald sued Paramount for plagiarism and breach of contract over the 1988 film Coming to America, a by-product was the revelation that Hollywood's accounting practices are more than slightly deceptive. That movie grossed $350 million worldwide, but Paramount was able to claim that the movie failed to show a profit. Daniels and his coauthors shed light on the issue. One coauthor, David Leedy, was a CPA with an admitted grudge when he self-published a 1980 booklet Motion Picture Distribution--An Accountant's Perspective. He sold more than 5,000 copies out of a post office box in Hollywood. In 1990, he updated his guide, relying on revelations that came out of the Buchwald case, but a finished book never made it to market. This newest, more polished version is a result of a collaboration between Leedy and Daniels, an entertainment journalist, and Steven Sills, head of a Hollywood auditing firm. The authors target "entertainment professionals" as their intended audience, but Movie Money will fascinate anyone interested in show business. David Rouse