Bob Is Exciting

Big Budget Breakdown

2007-09-02T11:48:00.000-07:00

Have you ever wonder why Hollywood keeps cranking out crappy big budget movies? Especially sequels to movies that everyone knows didn't live up to their potential (Tomb Raider 2, Fantastic Four 2). Well, I found this very interesting article on Slate.com. Check it out.

How To Finance a Hollywood Blockbuster. Start With a German Tax Shelter.

By Edward Jay Epstein
Posted Monday, April 25, 2005, at 12:18 PM ET

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. How did the studio collect over $87 million before cameras started rolling?

First, they used the German tax-shelter gambit. Loopholes in Germany's tax code are responsible for a good portion of Paramount's profits—an estimated $70 million to $90 million in 2003 alone. Best of all, there's no risk or cost for the studio (other than legal fees).

Here's how it works: Germany allows investors in German-owned film ventures to take an immediate tax deduction on their film investments, even if the film they're investing in has not yet gone into production. If a German wants to defer a tax bill to a more convenient time, a good way to do it is by investing in a future movie. The beauty of the German laws as far as Hollywood is concerned is that, unlike the tax laws in other countries, they don't require that films be shot locally or employ local personnel. German law simply requires that the film be produced by a German company that owns its copyright and shares in its future profits. This requisite presents no obstacle for studio lawyers.

The Hollywood studio starts by arranging on paper to sell the film's copyright to a German company. Then, they immediately lease the movie back—with an option to repurchase it later. At this point, a German company appears to own the movie. The Germans then sign a "production service agreement" and a "distribution service agreement" with the studio that limits their responsibility to token—and temporary—ownership.

For the privilege of fake ownership, the Germans pay the studio about 10 percent more than they'll eventually get back in lease and option payments. For the studio, that extra 10 percent is instant profit. It is truly, as one Paramount executive told me, "money for nothing." In the case of Lara Croft: Tomb Raider, Paramount sold the copyright to a group of German investors for $94 million through Tele-München Gruppe, a company headed by German mogul Herbert Kloiber. Paramount then repurchased the film for $83.8 million in lease and option payments. The studio's $10.2 million windfall paid the salaries of star Angelina Jolie ($7.5 million) and the rest of the principal cast.

Paramount made some more preproduction cash by taking advantage of the British government's largesse. To qualify for Section 48 tax relief in Britain, the movie had to include some scenes filmed in Britain and employ a couple of British actors. Given Lara Croft's peripatetic plot, neither condition presented an artistic problem. Again, Paramount entered into a complex sale-leaseback transaction, this time with Britain's Lombard Bank. Through this legal legerdemain, the studio netted, up front, another $12 million—enough to pay for the director and script.

To pay for most of the rest of the movie, Paramount sold distribution rights in six countries where the Tomb Raider video games were a big hit with teenage boys. These pre-sales in Japan, Britain, France, Germany, Italy, and Spain brought in another $65 million.

Through this triple play, Paramount earned a grand total of $87.2 million. The remaining budget—less than $7 million—would be covered by licensing the film's U.S. pay-television rights to Showtime (a network owned by Paramount's corporate parent, Viacom). At no cost to its treasury, Paramount launched a potential franchise—don't forget that sequels can be financed with the same "risk management" techniques.

Why couldn't Sideways, which cost just $16 million, use these tricks to pay off its much smaller budget? Because the international financing game favors big-budget movies with international appeal. Even if a $16 million production did entice a German tax shelter for some reason, the lawyers' bill for arranging the transaction would eat up most of the leaseback skim. A movie like Sideways, which is artistically grounded in California, would also have a hard time qualifying for the British tax subsidy. And finally, Sideways lacked the advance name recognition that's required to ring up large pre-sales in foreign markets.

Of course, it's not only Paramount that employs these devices—every studio uses them to minimize risk. Remember all those stories about how New Line was betting its entire futureLord of the Rings trilogy? Not quite. New Line covered almost the entire cost by using German tax shelters, New Zealand subsidies, and pre-sales. If studio executives don't crow in public about such coups, it's probably out of fear that such publicity will induce governments to stiffen their rules—as, for example, Germany periodically does with its tax code. When you've got a golden goose, you don't want to kill it while it's still laying eggs. on the

Be Kind Rewind

2007-08-17T06:32:00.001-07:00

I know I haven't been blogging much lately. A trip to Mexico and 2 weeks of Montezuma's Revenge can do that but something has coaxed me out of hiding. I have to say that one of my top 5 directors is Michel Gondry (Eternal Sunshine, Science of Sleep). Not only has he come out swinging in the film industry but the music videos he produces are ah-may-zazing! You would not be wasting your money picking up the Director's Series Volume 3 - The Works of Michel Gondry. The imagination he puts behind everything he works on is pure genius and his new film "Be Kind Rewind" is no different. You can find a better resolution trailer on Yahoo Movies but here is the You Tube version for your viewing pleasure.

Run Hokey!! Ok... not only is it Gondry but freakin' Mos Def and J.B.! Plus they remake my all time favorite comedy Ghostbusters! I will be there midnight December 20th (releases on the 21st). Come on people who is with me??

Obama Raises The Roof

2007-06-30T17:09:00.000-07:00

In what may be the most absurd presidential campaign advertising in recorded history Barack Obama has released a series of ringtones on his website which you can visit here. I guess when the chant "Go Obama, Go Obama" interrupts my third viewing of Live Free or Die Hard it will ensnare me to vote Obama in '08. Or burn the theater down.

Speed Racer

2007-06-02T10:20:00.001-07:00

When I heard that the Wachowski Brothers would be re-imagining Speed Racer I was as you would assume... skeptical. Would it be all green screen? Would there be a real Chim Chim or would they use Jar Jar's simian cousin? Would there be extended scenes of Speed Racer with his mouth gaping wide, seemingly eternally stuck in a 3 second space of time, like a dust ridden Tecmo Bowl game on the first generation Nintendo (the trick is to take out the game and blow on it).

I was thinking that this was the Wachowski's first attempt at an adaptation but then I had to remember they wrote V for Vendetta which was of course taken from the graphic novel. And the Matrix trilogy which was a Neo-Sci mashup of Star Wars, Julius Caeser, and the Bible. Et tu Cypher?

But with the recent casting of Christina Ricci (Black Snake Moan) as girlfriend Trixie and Matthew Fox (Lost) as Speed's older brother, Racer X, this might be good. I am not too sure that Emile Hersh is the best choice. A little to much brooding and not enough acting in Lords of Dogtown. I am guessing that Shia LaBeouf was too busy waiting for a phone call from Steven Spielberg.

Only time will tell. And with a release date of May 9, 2008 time is all we have.

My Name is John Rambo and I am an AARP member

2007-05-19T21:13:00.000-07:00

When I heard that Stallone had decided to dust the rigamortus off of the Rocky series I thought, "Well, if George Foreman can still box... so can the Italian Stallion (soon to be Glue Stick)". Though I did not see the film most people said it was better than average. OK. But then during a conference call that I snuck onto in which Stallone was hawking the new Rocky movie to youth leaders around the country, Sly mentioned his next project... a new Rambo movie. Hold the phone. What? A new Rambo? Do we need a new Rambo movie? Did we need a new Rocky?

Then he proceeded to give a few details on the project. Rambo is a recluse in the Burmese jungles living as far off the grid as possible. Then he finds out about a Burman village that is being persecuted for their Christian beliefs. So he unleashes a holy war on the villains and saves the day... which in turn saves himself. This sounds like it could be dripping in hokeyness. Most movies that walk the spiritual / entertainment line usually tend to lean heavily to either side. Most suck.

The first Christian-themed movie I saw in the theater was Omega Code. I wanted to burn the theater down with me in it. The second (and last) I went to the multiplex to see was Passion of the Christ. That was almost unbearable to watch it was so intense. So this presents Stallone a gauntlet of obstacles to overcome. How do you walk such a fine line?

Well, in signature Rambo fashion, the line has been obliterated by an arsenal of explosive tipped arrows. If you are opposed to violence please do not watch this trailer. If you don't mind Bible verses quoted over the sound of an automatic weapon being unloaded into an evil foot soldier - please proceed.

Holy Crap right! That is Hizznard Core! I could be wrong but I don't see Churches buying out entire theaters and busing parishioners in like they did for Passion. But I could be wrong. I have attended a junior high youth group meeting that used the entire 8 minute opening scene from Saving Private Ryan to illustrate how we should persevere through adversities as Christians. Maybe they could use the scene where John Rambo uses a machete to detach the soldiers head to inspire young Christians not to lose their head when presenting the Gospel to strangers. Or maybe Basic Instinct 2 could inform teenagers about the dangers of sex and the importance of not cluddering theaters with obvious straight-to-video movies. Again... I could be wrong.

Spam Me Baby!!

2007-05-11T23:01:00.000-07:00

Ok. Ever since I moved away from my AOL account four years ago I relenquished the privledge of wading through thousands of Spam emails. Most were sly come-ons to visit elicit sites with clever titles like "Jennifer from High School" or "How have you been?" But since I dropped AOL (code for "moved out of my parents house") I have not had to endure the gauntlet. Until Myspace.

Now those who know me know that when trends come around I flee. An example is leaving my blessings stranded on page 4 of The Prayer of Jabez. Myspace though has the added attraction of "easy connection". It seemed like everyone I knew had a Myspace account. Emails became passe and messaging became "The Balls" to quote a line from Anchorman. But it did come with a snag, Spam!

So yes I have accidentally clicked on Myspace messages with clever titles like "Jennifer from High School" only to find a world of sin one-click away. Now I just delete every message from someone I don't know just to be sure. But one caught my eye today. I was going through messages that I must have skipped over from months ago and I ran across this:

Now you may not be able to read the title of the message so here it is: "Chrissy would like to invite you to the group Sweat Hot Girls." The title alone brings my dinner to the surface (Sweat Hot Girls?) but what you should focus on is the picture. What the crap? Is that supposed to entice someone to check out her page. It looks like she is saying "I've been sick."

Either way I have become hardened to the vague message titles and delete them without hesitation. So if you haven't spoken to me in many years I suggest using a very specific title because "Jennifer from High School" just won't do.

24: Jack Bauer: Rouge Agent: Downward Spiral

2007-05-10T10:55:00.000-07:00

Note: If you are waiting to watch 24 season 6 on DVD please read no further. I comment on this season's storyline (but no future spoilers).

The blog title above may be long but very apt for Day 6 of 24. After a suspenseful and engrossing Day 5, this season has left me wishing the show was called 12. If the eye rolling addition of Ricky "Don't call me Rick" Schroeder and a dragging nuclear threat storyline was not enough to help me change the channel. This season also includes an improbable phone call from thought-dead, now hostage Audrey Raines, only seconds after finding the suitcase nukes. This prompts Jack to go rouge agent and bring back one of the women he has loved. This is just insane.

Even the show runners know that this season is falling short. Executive Producer David Fury said that he knows this season isn't working and will fuse the writing methods of season 5 and 6 to make it more "unpredictable". You can read the article here.

Hopefully something will get the ball rolling next season and maybe we can go back to calling it the Jack Bauer Power Hour!

This Just In: Satan Behind Illegal Immigration

2007-05-03T05:50:00.000-07:00

No, that is not just a salacious headline geared to have you stop and read my blog. That is an actual headline from the Salt Lake Tribune. Click on the link to read the article:

http://www.sltrib.com/news/ci_5756635

The idea that Immigration is the key to the demise of our Nation is baloney. Our schools must be teaching selective history because it seems everyone has forgotten that we are all immigrants. The only people that have a right to rail against the idea of foreigners moving in are the Native Americans. But if I remember correctly it didn't work too well... whitey still here. So now after all these years of touting that we are a melting pot, evangelizing "The American Dream" to all nations, and proclaiming just how well we have it here by exporting multi-million dollar entertainment experiences abroad, we are now saying, "Sorry, all full."

I understand that it is not Immigration that everyone is barricading against but Illegal Immigration. But my problem is that the American system of filtering is broken. Now I have not polled a large pool of Americans but talking to those around me about the situation with my brother-in-law Luis, most had no idea that just marrying an American citizen does not guarantee you a green card. That is now an old wives tale. My sister-in-law has been husbandless for over 6 months. And that is with the couple working for over two years and paying thousands of dollars in fees to gain citizenship. The American system of dealing with the "problem" is voluntary deportation and then cross your fingers. This is wrong.

So now America is not only looking at losing a man who works harder than five Americans pulling a 70 hour work week for less than any card-carrying citizen. But now his wife, a college degree holding Elementary School Teacher (aren't we in short supply these days), is facing the possibility that her husband will not be granted citizenship and will have to leave the country she was born in to be with him.

The United States should be disgusted but of course they are too busy with having to rid the country of peaceful protest and freedom of speech. Check these out.

Here is a different networks take on the protest:
http://video.nbc4.tv/player/?id=99815

So as you can see this is becoming a very heated issue. Those of you who know me know that I am not one to go off railing against the government unless it is something that is worth speaking up about. So please if in the next few months if any legislation comes up about the immigration issue please step up and voice your opinion, whatever it might be. Also be praying for the issue with Isabel and Luis that it will soon be taken care of so they won't be seperated from each other any longer.

Old Fashioned Fun

2007-04-28T23:21:00.000-07:00

I was going to post a very heavy dissertation on the future, hopelessness, and other weighty subjects but decided against it. Instead I will be praising the awesomeness of the new MTV show Human Giant. Don't let the fact that the show is on a network dedicated to numbing the minds of overweight teenage mouth breathers deter you. This skit show is freaking funny. Usually a show like this I would tape and watch by myself since most friends of mine do not share the same sense of humor that I do. But I have been playing this for everyone and they all really dig it. Here are a couple sketches for you to enjoy:

Old Fashioned Fun

Camping Trip

Welcome To The Suck

2007-03-31T23:33:00.000-07:00

I am embarking on a new journey. The journey into blogs. Sad isn't it. I am a web designer and have created blogs for clients but never for myself. I know that everyone has been asking, "Why doesn't Bob have a blog yet?" I think the number one answer is definitely Laziness. Or it might be my consistent backlash against all that is "In". Either way, it is here now and I thought I would start with a couple of things that have been in my mind of late:

1. Please can we stop with the recent resurgence of Zombie movies. I have noticed a disturbing influx of both commercial and indie films dealing with those of the half / full dead persuasion. Now I, like most people, are always looking for another reason to drop $10 on an hour and half of lifeless brain eaters but why would I do that if I could just turn on American Idol to get the same effect. As a disclaimer I must note that on April 6th I will be going to see Grindhouse which includes Robert Rodriguez's Planet Terror but after that film there should be a six year moratorium on Zombie films. Sorry 28 Weeks Later, you will have to stop post-production and let your film's stars stumble around Development Hell for at least six years.

2. I understand that every once and awhile a slow newsday befalls the networks but could we please bump "Death From Above: Severe Weather Alert 2007" below other minor news stories like Darfur, the War in Iraq, and the auctioning off of Anna Nicole Smith's foot fungus creme. I must say that I am even more riveted by Sharon Storries fifth reporting on just how large the puddle filling the ditch just off of the Interstate is getting. I say lets save that Beta tape for the yearly "No Escape: Ice Storm 2008". Idiots braving sheets of ice only to turn their automobile into a low-fi centrifuge... Now that's television!!

3. Just in case the person who felt it was necessary to drop a fifty-pound rusted-out automotive tool in my driveway is reading this...why? I have no use for what looks like a contraption that could be used to hoist an engine out of car. Maybe it is a prop used in one of the Saw movies. Either way... you may come and pick it up at any time. In fact if you aren't the guy who dropped it off - you are welcome to it anyway!

I also want to start an "Ask Bob" section of this blog. If you have any questions on any subject that need answering send them to me. I am a fountain of knowledge and I promise to use my wisdom wisely. Yes... I said wisdom wisely! High Five! Much love.

BOB