When financing a film, if a movie or project flops, is there a recovery time in which the studios or executives can somehow come up with the money for the next project so that the next project won’t flop?
Financing / Crowdfunding : Financing by Josiah Bhola Hillaire
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Not that I know of, but I'm sure the loss will translate to a tax write-off that frees up money to partially fund future projects. But there needs to be enough successes to balance out the failures to keep it sustainable.
Bron just went belly up, so there's an example of a big player that ran out of runway.
I didn't know that, Timo Puolitaipale. I just looked it up and found out Bron Studios filed for creditor protection in Canada and Chapter 15 bankruptcy in the U.S. I thought Bron Studios was doing well. I've seen its logo in a lot of movies.
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A lot of US producers will use Section 181 to minimize their exposure to loss: https://www.law.cornell.edu/uscode/text/26/181#:~:text=Go!-,26%20U.S.%20Code%20§%20181%20%2D%20Treatment%20of%20certain%20qualified%20film,television%20and%20live%20theatrical%20productions&text=A%20taxpayer%20may%20elect%20to,not%20chargeable%20to%20capital%20account. But to your question, there isn’t necessarily a specific recovery time until the next project goes, but you can write off some of the loss and just think through the way you structure financing your next movie . As with all film funding a return is never a guarantee , but if you believe strongly on the project and a story, invest, and go for it.
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I really didn’t know that Timo Puolitaipale. Thank you for sharing that
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Thank you Amanda Toney
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Studios are conglomerates; they make or lose money regardless of movies. For example, I saw an Apple stock evaluation before AppleTV existed and the report said Apple did not have to make any $ from produced movies & tv shows. Apple is spending $400M+ on Scorsese's next movie. No way movie will earn profit.