"Hollywood accounting" isn't designed to cheat anyone. It has been used to do so in the past, mostly decades ago. Slight difference.
It refers to the fact that a film as an enterprise is designed as an independent business with equity held by a few investors, and the enterprise gets dissolved when the film finishes post production. It's the only financial model that actually makes sense when you consider how a film is made and by whom. A small group of money people front a large amount of capital to pay hundreds to thousands of subcontractors up front to create an asset with intangible value, and they split the rights to that asset when they're done. Some of the subcontractors gets something that looks like equity, most don't.
It is a source of problems and inefficiencies. But to me the big issues lie before pre and after post, a lot of the work and structure of businesses during the creation of a film is pretty well honed and workers do have different kinds of power than most employees in traditional environments.
Also films are totally different than television and other media, at least financially. Studios work differently than networks.
It refers to the fact that a film as an enterprise is designed as an independent business with equity held by a few investors, and the enterprise gets dissolved when the film finishes post production. It's the only financial model that actually makes sense when you consider how a film is made and by whom. A small group of money people front a large amount of capital to pay hundreds to thousands of subcontractors up front to create an asset with intangible value, and they split the rights to that asset when they're done. Some of the subcontractors gets something that looks like equity, most don't.
It is a source of problems and inefficiencies. But to me the big issues lie before pre and after post, a lot of the work and structure of businesses during the creation of a film is pretty well honed and workers do have different kinds of power than most employees in traditional environments.
Also films are totally different than television and other media, at least financially. Studios work differently than networks.