WBS license IP from Warner Bros Productions (WBP).
WBS hire sets and costumes from WBP.
WBS pays WBP for promotional marketing.
All workers are contracted with WBS, who is making the movie.
Movie brings in millions or billions in revenue to WBS.
It just so happens that all those things, IP, sets, costumes, marketing, well they all came to more millions and billions, which WBS now needs to pay WBP.
WBS operates at a loss, WBP gets all the profits.
The reality is much more complicated than that, but that’s the gist of it - and the Hollywood entertainment industry aren’t the only ones doing it anymore.
Great breakdown! Given that this is Lemmy and we trend toward more tech focused, people might gel better with Apple and Microsoft. If anyone is confused about what you wrote but the my understand big tech tax evasion, it is basically the same set of steps.
Big tech just doesn’t pay residuals.
Apple is well known for their Irish tax haven holding all of their IP and other rights so Apple can lease it back from themselves and account for pure profit as expenses. That’s also how Amazon pays little to no taxes. Or sometimes these company’s pay negative tax rates meaning they get government welfare to buy billionaires fudge rounds presumably, in conservative populist parlance.
Also to add on to my earlier comment, after some research it appears that the standard union contract prior to the strike has always been based on gross revenue instead of net. So it is consistent with why the WGA put this out.
Exactly this. The classic example:
The reality is much more complicated than that, but that’s the gist of it - and the Hollywood entertainment industry aren’t the only ones doing it anymore.
Great breakdown! Given that this is Lemmy and we trend toward more tech focused, people might gel better with Apple and Microsoft. If anyone is confused about what you wrote but the my understand big tech tax evasion, it is basically the same set of steps.
Big tech just doesn’t pay residuals.
Apple is well known for their Irish tax haven holding all of their IP and other rights so Apple can lease it back from themselves and account for pure profit as expenses. That’s also how Amazon pays little to no taxes. Or sometimes these company’s pay negative tax rates meaning they get government welfare to buy billionaires fudge rounds presumably, in conservative populist parlance.
Also to add on to my earlier comment, after some research it appears that the standard union contract prior to the strike has always been based on gross revenue instead of net. So it is consistent with why the WGA put this out.
Although, as the chart shows, Apple is also a production company now, so it also needs to start paying residuals.