Net Profits Accounting

For every great Hollywood success, there are multiple stories of great Hollywood failures. Stars that have fallen from the top into bankruptcy while all the while not understanding how after making a giant blockbuster, they still walked away with very little money. These stories should not be the common ending to the Hollywood fairytale. The Boesch Law Group has been helping rewrite these endings with the success of a summer blockbuster. That is because BLG knows that contract provisions and complex business practices can effectively eliminate profits from “net profits accounting.” The net profit is the remaining money after all expenses have been subtracted from the profits. These expenses can often include all of the financing activities of the project. Though the meaning of “Net Profits” may differ on a case-by-case basis, litigation over the definition is common, and obscure contract clauses often dictate the outcome. Whether advertising, production costs, distribution expenses, overhead, salaries, distribution fees, and potentially many arcane categories of expenses are subtracted in calculating “net” profits depends upon contract construction and interpretation.

The superhero blockbuster “Batman,” at the time, was the highest-grossing movie in Warner Brothers’ history. It also was “unprofitable,” and the two producers who optioned the material to the studio did not see any net profits promised under their contract because of the language used to define “net profits.” For them, the language of the contract made a glorious day into a dark knight.

If you are ever in a situation where you feel your contract’s language may hurt your bottom line, don’t trust any Joker. BLG has extensive experience defending and recovering profits and royalties for and from various entertainment artists, executives, composers, rock bands, television executives, and producers, as well as film stars.

Not only do the Boesch Law Group entertainment lawyers succeed in collecting their clients’ rightful share, but BLG also prepares clients to better plan for the future by negotiating net profits.

Depending upon the negotiating power or leverage, steps can be taken to ensure that the contractual definition is the most favorable for you.

When you need to cover your bottom line, BLG will guide you through the dark night.

BLG.
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