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[Prospero]

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As paradoxical and absurd as it sounds, it's cheaper for a Hollywood studio to make a big-budget action movie than to make a shoestring art film like Sideways. Consider Paramount's 2001 action flick Lara Croft: Tomb Raider. On paper, Tomb Raider's budget was $94 million. In fact, the entire movie cost Paramount less than $7 million.

Remember all those stories about how New Line was betting its entire future on the Lord of the Rings trilogy? Not quite. New Line covered almost the entire cost by using German tax shelters, New Zealand subsidies, and pre-sales.

Correct me if I'm wrong, but doesn't this explain why Uwe Boll gets to keep making movies?

 

[Nerevar]

On paper, Tomb Raider's budget was $94 million. In fact, the entire movie cost Paramount less than $7 million.

I'm sorry, but how can "creative accounting" increase the apparent cost of something by 1300%?

 

[Prospero]

I'm sorry, but how can "creative accounting" increase the apparent cost of something by 1300%?

Read the article--it's nuts.

 

[themadcowtipper]

Well it is not like an independent film is going to get all the tax breaks a big budget, well known film would get for filming somewhere. I mean films like LOTR gives the country where it is filmed tons of exposure, thats why they save tons of money with the tax breaks.

 

[border]

To make a long story short, they sell the rights to the film to investors in foreign countries so that they get a tax break. Then they buy the rights back for 10-20% less than they sold them for. That's like a 10-20 million dollar profit each time.

Then they sell the distribution rights across several foreign countries to cover everything else.

I still think that Tomb Raider might be an extraordinary example, though. Since it was a huge property they probably got a lot of big distribution offers, but Generic Blockbuster X might be a bit more unstable.

Uwe Boll keeps making movies because he can make them cheap. According to the article his budgets would be too small to do this kind of deal.

 

[MaverickX9]

Very interesting article.

Thanks for the link.

 

[galeninjapan]

Robert Rodreguiz makes movies cheap all the time. Thats what hes famous for.