I had a similar argument the other day with some capitalist asshole I know. He kept saying “do you want your fries at McDonald’s to be $30?”. Did the math for him and showed him that if McDonalds gave every single employee of theirs $5 raise, it’ll cost them ~ $250mil, and their profit for the year was $6b. He didn’t say a single word after that.
If you’re gonna “do the math” for someone you should probably do it correctly. I don’t know where you got this figure from. In 2022, McDonald’s employed ~200,000 people. There are 2080 working hours (52 weeks * 40 hours) in a year.
200,000 * 2080 * 5 = $2.08 billion
Of course, this is still an affordable amount of money for McDonald’s, but it is significantly more (about 8 times) than what you say it is.
It’s disgusting how greedy and petty these multi-million dollar companies are that they won’t even remotely play fair with the people who actually make them all their money. Even worse they are hoping a few well paid AI programmers can eliminate the need for writers all together.
Take to the high seas and don’t give those bastards a cent!
All good! I think it’s important to understand the obscene difference between a million and a billion dollars so I always try to point it out just in case.
This is a great post, but I’d argue that evaluating the company’s net profit is better as it’s the actual profits the company makes at the endEdit: Nope, revenue is more important. See this post
Revenue is used because this industry is notorious for “Hollywood accounting” to avoid having any actual profits to avoid residuals based on net.
Some of the biggesr blockbusters of all time are, thanks to Hollywood accounting, net losers. Forrest Gump is a classic example: it made almost a billion dollars in revenue vs a $55 million budget. But thanks to tax evasion techniques the movie is actually a huge financial loser on paper, losing more than $65 million if you look at net.
You can’t trust non-workers, who exist entirely off the wealth they can cheat out of workers, to be honest.
So that is why gross revenue is used in Hollywood.
Edit: to add on to that Gump example, the author was supposed to be paid based on net. He got totally fucked which is why no sequel was made. His IP created a billion+ dollars out of thin air, but blood sucking capitalist parasites leech it all away with tax evasion.
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.
That’s really interesting. Thanks for explaining that, it was something I was totally unaware of. Now I have changed my mind and I think the WGA listed the right numbers.
Hollywood accounting doesn’t apply to studios that are publicly traded, only their projects. But anyway, because they’re public, we know what their profits are:
2022 profits
Disney (NYSE: DIS) $28.321 billion
Netflix (NASDAQ: NFLX) $12.447 billion
Warner Brothers Discovery (NASDAQ: WBD) $13.375 billion
Some of these are obviously corporate figures and don’t necessarily reflect how well the production department of each corp is doing. Still, it reflects the fact that these corporations could easily (well, mostly) absorb the costs of what SAG-AFTRA/WGA are asking for.
Sony has all their fiscal year information published but not collated by calendar year, and I couldn’t be bothered to dig it up myself, so I just took their word for it.
Well, no since this should be considered one of the expenses the companies will have to pay, revenue is the appropriate metric. I wouldn’t judge the cost to switch from aluminum to carbon fiber at Boeing against its profits, I’d measure it against revenue
Revenue is better. Actual profits is very hard to measure since the numbers are obfuscated. These companies often stash their IP rights in a tax haven under a different company. Like how Apple uses the island of Jersey. End of the year the offshore company sends a massive license fee bill and boom their taxable income is slashed significantly.
