A Method To Uwe Boll's Madness 82
grandfenwick writes "Ever wonder why Uwe Boll keeps getting bigger budgets and bigger-name actors for his awful film adaptations of videogames? Stuart Wood of Cinema Blend theorizes in an exposé on Boll's methods. His position? Thanks to a loophole in German tax laws, he and his investors actually make *more* money the more a movie tanks at the box office." From the article: "Boll's movies aren't being made out of a love for cinema. They are a shallow exercise in money-making greed and exploitation. Rich Germans getting richer by exploiting the stupidity of the Hollywood system and the naivety of critics like us, who never thought to question the true motives of why these horrible, horrible movies existed. Pure and unfiltered 21st century capitalism." Take with a grain of salt.
rip-off (Score:2)
That plot's clearly been done before.
Re:rip-off (Score:2)
Note: That movie is being remade. I wonder if the same thing applies to it :)
Godwin meets Mel Brooks (Score:5, Funny)
Does this mean "Springtime for Hitler" will be on the Resident Evil 3 soundtrack?
Springtime for Hitler in Germany! (Score:2)
Ouch.
Re:Springtime for Hitler in Germany! (Score:2)
Postal, Far Cry, Hunter: The Reckoning, In the Name of the King: A Dungeon Siege Tale, BloodRayne, Alone in the Dark...
Re:Springtime for Hitler in Germany! (Score:1)
Alternatively, I could have used this link [penny-arcade.com]. They're both good choices.
Re:Springtime for Hitler in Germany! (Score:2)
Capitalism? (Score:1)
If it's capitalism, please explain why.
If it's not capitalism, please explain why.
If it's something else, please explain why.
If someone has said it is something else, and you think they're wrong, please explain why.
If you disagree with people's expressions of the above, please explain why.
It's time we had this whole capitalism, communism, socialism, democracy, tota
Re:Capitalism? (Score:1)
If the studios can continue to produce one craptastic game-based movie after another, and we continue to pile into the theatres at $9 a pop to watch them, why should they stop making them (or at least put more effort into actually making them good)? They have no reason to.
Not according to the article (Score:4, Informative)
House of the Dead cost $22,000,000 including marketing costs. It's worldwide gross was $13,818,181. That's a LOSS of $9,000,000 by my calculator. Alone in the Dark cost approx $32,000,000 including marketing costs. To date its worldwide gross is $6,040,827. That is an even more impressive LOSS of $26,000,000.
I'd want to doublecheck those numbers, though, based on the author's odd ideas about tax law:
But crucially, the bizarre tax laws in Germany mean that any wealthy Germans who invest in a movie can write-off the production cost, delay paying their taxes and generally reduce their tax burden. When you disseminate all the boring legal business law surrounding it the bottom line is this - the German investors in a movie only pay tax on any RETURNS the movie makes, their investment is 100% deductible, so the minute the movie makes a profit, said investor has to start paying tax.
He first claims that Germany has "bizarre tax laws" which only tax businesses on their profits rather than their costs (isn't that how every country's tax laws work?!), then he seems to believe that a tax writeoff of $1 reduces your tax by $1 (which still wouldn't make the movie investors any money) rather than reducing your taxable income by $1 (which means the investors are still losing money, just not quite as much). I don't know anything about German tax law, but I've seen more than a few people who mistakenly think that's how writeoffs work in the USA, so I'd like to see some references before I believe that Germany's tax code is based on our urban legends.
Plus the investors can actually borrow money to put towards investment and write that off too.
Yes, if you borrow money and lose it, then your taxable income gets reduced by the amount you lost. But why the hell would anyone do that on purpose? Instead of paying (marginal tax rate) * (money borrowed) to the government, you'd have to pay 100% * (money borrowed) to your creditors!
Re:Not according to the article (Score:3, Interesting)
Re:Not according to the article (Score:2)
If one were to summarize the strategy as described in that article, using a numbered list, it would a
Re:Not according to the article (Score:1)
I'm German (Score:1)
Re:Capitalism? (Score:1)
Capitalism is, in essence "anything for money." If people crept into your house at night to kill you and steal your organs for profit -- and get away with it -- that would still be capitalism.
Don't be jealous
Re:Capitalism? (Score:2)
Don't feed the trolls.
Re:Capitalism? (Score:1)
Relevant dictionary defintions of capital:
1. Assets available for use in the production of further assets.
2. Wealth in the form of money or property owned by a person or business and human resources of economic value
Re:Capitalism? (Score:2)
Feeding the Troll (Score:1)
Er, wait (Troll) (Score:1)
Re:Er, wait (Troll) (Score:2)
In that regard, my post fed the troll a little. My apologies. It should have just been:
"Troll."
Re:Er, wait (Troll) (Score:1)
Re:Capitalism? (Score:2)
So, you think that a bunch of one-off posts in
Ummm... good luck with that.
Here's a start: http://www.wikipedia.org/ [wikipedia.org]
Have fun.
No, you nisunderstand. Re:Capitalism? (Score:1)
The problem with wikipedia is one of no self research.
I didn't think there'd be much progress along even those lines, so I threw in the "or at least a good start on it" part.
Re:No, you nisunderstand. Re:Capitalism? (Score:2)
Also, these are systems, individual actions cannot be 'categorized' as belonging to a particular system, without viewing them in context of each system.
Re:No, you nisunderstand. Re:Capitalism? (Score:1)
It seems to me that there are some actions that don't exist in some of the systems, or are more prominent in one system than in others.
But what I'm interested in, and the point of my parent post, is to foster discussion that would facilitate developments that would lead to perhaps something like the production of perhaps one document that we could al
Re:No, you nisunderstand. Re:Capitalism? (Score:2)
Re: slamming of systems, that's why we have moderation... it's not a perfect system, but I think it works well enough.
Unfortunately, there's just too much involved to be able to tell someone to RTFM for social/political/economic systems, and expect that it would do any good.
Most of the people slamming certain systems are just trolls, and don't want to learn.
Re:The System Slamming problem... (Score:1)
The slashdot moderation system is totally broken. It has been since it's inception. If it were scrapped and replaced with a moderation system of (underated|overrated) it could only improve. There's no way to clearly moderate for people who aren't trolling but have no clue what they're talking about, for example, and the current labels are pract
Re:The System Slamming problem... (Score:2)
The thing that needs to be done is to address the misinformation in a reply, which will hopefully be modded up.
My solution? Read at +3, unless I wanna see a whole thread. If somoeone's full of it, and still gets modded up, I check my facts and then respond.
Re:Capitalism? (Score:2, Informative)
Re:Capitalism? (Score:1)
Re:Capitalism? (Score:1)
http://www.google.com/search?hl=en&q=%22imperiali
Several of the results of that search lead to copies of none other than, "Imperialism, The Highest Stage of Capitalism" by Vladimir Illyich Lenin.
Uwe Boll is a Mel Brooks Fan... (Score:5, Funny)
Re:Uwe Boll is a Mel Brooks Fan... (Score:2)
-Max Bialystock, The Producers
Re: (Score:2)
Ummm... (Score:2)
2) Whatever one thinks of Hollywood executives, their ability to pour money into their own pockets is pretty much beyond question. To present them as helpless pawns of "rich Germans" seems implausible.
Re:Ummm... (Score:1)
I know! how dare people compare crappy video game movies to glorious lifein the worker paradise! juse forever! log live the great poet and computer master wonder of society and the world the dear leader kim il sung!!
i just wanted to get that out of the way before a leftist poster goes off on a rant saying the same thing.
So... (Score:4, Funny)
Jesus, that's quite the kick in the head, eh?
Re:So... (Score:2)
Re:So... (Score:1)
Sounds like... (Score:1, Redundant)
Re:Sounds like... (Score:2)
Re:Sounds like... (Score:1)
Re:Sounds like... (Score:2)
And this is news? (Score:1)
You know, not everyone gives a damn about videogames... shockingly to many people they aren't worth the time of day let alone fanaticism. Games and the games industry, like hollywood, could really care less about everything except money. There are a few exceptions where a few studios really try to push the envelope, make an artistic product, or even just focus on fun... but they are dwindling day by day.
Uwe Boll is mediocre, and works
Re:And this is news? (Score:1)
Uwe Boll is not "mediocre" and his films are neither "mediocre" nor "profitable". Your cynical assessment of the studios desire to profit irregardless of our enjoyment is technically correct. However, it deliberately ignores the clearly stated facts.
Uwe Boll is a horrible director. His films are both horrible and NOT profitable. So given your assessment of it being all about the money, how is Uwe able to continue making movies? Unless you agree that
Re:And this is news? (Score:1)
His movies are all crap, I'm no fan by a long shot, but this "news" story is totally wrong and fueled by nothing more than dislike for the guy and his work.
Budget
$20,000,000 (estimated)
Opening Weekend
$2,834,421 (U
This is not specific to Uwe Boll, or Germany (Score:3, Interesting)
Only German national productions can quality for the tax rebate. Hollywood *loves* this trick: sell the production rights to a German company, and lease them back immediately, with the option to buy out the lease when the movie hits theaters.
I've heard it said that Tomb Raider was made for under $9 million, excluding salaries. The "official" budget on paper was ten times that amount. Where did the rest of the money go? Back into the investors' pockets, of course, but now completely tax-deductable.
Do you know why Sky Captain and the World of Tomorrow was such a big deal? It was made for practically nothing. The stated $30-mil figure was totally bogus. Thanks to some budget manipulation, it turned a profit for the production company long before the first reel was shipped. Any profits from theaters or DVD were just icing on the cake.
Re:This is not specific to Uwe Boll, or Germany (Score:2)
Re:This is not specific to Uwe Boll, or Germany (Score:5, Informative)
http://www.slate.com/id/2117309/ [slate.com]
Within the studios, this is common knowledge. It's the reason why Hollywood movies never turn a profit, as a rule. Every now and then you hear a story about how someone got screwed by agreeing to take less up front for a share of the profits. (Most recently, Peter Jackson is suing New Line for cooking the books on the LotR movies.)
Hollywood accounting is like Enron strung out on crystal meth. All the sliminess with twice the crazy.
Re:This is not specific to Uwe Boll, or Germany (Score:2)
ISTR that Stan Lee sued for something similar; according to the studio (Columbia Tri-Star?) Spider-Man lost money. Never made a profit, according to the accounting books. So poor Stan's cut of the profit amounted to nothing.
Proof... (Score:2)
From what I understnad, tax loopholes might reduce your tax burden if you have millions in other income. But blowing your money still seems foolish, unless the tax rate is over 100%. Disclaimer: I have never had anywhere close to a million dollars, so I have no first-hand experience. But if anybody cares to donate...
So, how can you loose, say, $10 million in making a movie and come out ahead. Surely Germany will not actually GIVE you $10 million in replaceme
Re:Proof... (Score:4, Interesting)
I understand it the following way: Say, you're a resident of Germany and make 10 million EUR profit in some way or another, Germany taxes that profit. But, when you reinvest that money, the government will not tax it. It will only tax the profits from that investment. But, what when the investment is not profitable? Well, then it is a loss, and losses aren't taxed.
So, instead of paying a, say, 20% tax, you make a loss of 10%, which is gives you practically a plus of 1 million EUR.
The idea was, that this money is invested in "hard" things, like factories, machinery, and the like, which have a real value.
Almost as interesting as subsidiaries in one nation buying from the main company in different nation compontents to excessive prices, in order to turn their profits in said nation to zero, and pay only taxes in the country of the main company, where the taxes are coincidentally much lower than in the country the profits were originally made.
Re:Proof... (Score:1)
Re:Proof... (Score:1)
I work for a large Japanese corporation, and this is often used as a method to funnel money back to Japan. For example we need to buy manufacturing piece of equipm
Makes little sense... (Score:4, Insightful)
Maybe there's another thing involved besides straightforward tax deductions, but the situation wasn't explained very well.
Possibly what he's meant is that if you invest $1 million you don't pay taxes on that $1 million (because it's deducted) and you only pay taxes on returns from that $1 million that are in -excess- of $1 million. (If by 'returns' he means return-on-investment, ie, net profits, and not box office returns, ie, gross profits, that could be what he's trying to say). So, if I make a movie that exactly breaks even then I'd get all my money back -and- not pay taxes on it. In which case it's not true that you make money by tanking at the box office, but by breaking even. It would also be a really, really dumb way to write a tax law, but such dumb laws -have- been written before when trying to 'stimulate investment'... or by corrupt legistlators. I just wouldn't expect to see anything that dumb in a first world nation in this century.
Anybody out there know anything about german finance laws?
Re:Makes little sense... (Score:4, Interesting)
Basically, to use your example, you spent that $1,000,000 of investor money (not your own). However, you collect investments of $100,000,000 to cover your rediculous budget, and you have a German company as your producer. Under German law, you get that tax deduction before the movie enters production, and then lease the film for your US studio for actual filming. So that's $99,000,000 you basically pocket on your $100m movie that really cost $1m.
Now, let's say your film goes to market and makes $125 million in revinues. By contract obligations, you pay back your investors their $100 million plus interest. Let's say 10% for another 10 million. Or, if you really screwed them, they signed for a percentage of the profits instead of that 10%, which means they get a set percentage out of $25m which could end up being even less. Heck, if you're lucky, the movie won't even make back the budget and your investors also get screwed even out of their full $100m.
All scenarios aside, let's say you agreed to 10% interset on the investment. That means $110m out of the $125m goes back to the investors, and your studio makes another $15m for a grand total of $114m profits on a movie that "cost" $100m and grossed $125m.
It's called cooking the books, it can get you in a lot of trouble, but a lot of companies get away with it for decades. However, if you have a good team of lawyers to handle your contracts and such, you can probably get away with this sort of thing without technically breaking the law.
Re:Makes little sense... (Score:3, Informative)
Take a closer look at the Tomb Raider situation. They found investors willing to pony up 94 million dollars to buy the rights to Tomb Raider. Paramount then repurchased the film for 83.3 million, making almost 11 million on the deal.
So, you say, how do the Germans make money? Simple:
Suppose you made 94 million dollars in income this year, and lived in Germany. You might be upset by the
Re:Makes little sense... (Score:2)
Re:Makes little sense... (Score:2)
Do the math: 94 million in, 83.3 million out = a loss. No taxes.
Re:Makes little sense... (Score:2)
It's also a really simple case that should've been clearly explained in the original articles.
(Although... your explanation still doesn't make sense directly, though I understand it anyhow, but, 'You don't pay taxes on capital invested'
Article is horribly flawed... (Score:4, Informative)
In Germany income taxes work like this (2004):
" a zero tax rate on taxable income up to 7,664
" a marginal tax rate rising form 16% to 45% on taxable income between 7,664 and 52.152
" a marginal tax rate of 45% on taxable income over 52.152"
And money invested in films just doesn't count as taxable income.
So, let's say someone in germany makes a 10 million a year (they would have to make a lot to invest 10+ million euros in a movie). Then, let's say they invest 5 million in a movie that flops, and get no money back. If they never invested, they would have 5.5 million euros left after taxes. Losing 5 million euros, they only 2.25 million euros left.
Run the numbers, it is impossible for a german to have a net gain in his take home income on a film that looses money.
However, if the same German investor invests 5 million euros, and gets back 6 million, at the end of the year they end up with 6.05 million euro(a
Dear god, this isn't even hard math. I mean I did these numbers in 30 seconds without a calculator using nothing more than junior high algebra.
At worst, this trick could help someone defer taxes for a bit, it's no incentive to flop movies.
Re:Article is horribly flawed... (Score:2)
So, if they make $50 million a year, that would be $27.5M after taxes if they didn't invest.
But if they did invest $20M in a movie, they would end up with $16.5M after taxes. Now, if the movie makes $12M (technically an $8M loss), they will still end up with $28.5M (a net gain of $1M vs not investing).
Yes the movi
Re:Article is horribly flawed... (Score:1)
DVD Formula... (Score:3, Interesting)
Re:DVD Formula... (Score:1)
Re:DVD Formula... (Score:2)
Numbers explained (Score:1, Redundant)
So, if they make $50 million a year, that would be $27.5M after taxes if they didn't invest.
But if they did invest $20M in a movie, they would end up with $16.5M after taxes. Now, if the movie makes $12M (technically an $8M loss), they will still end up with $28.5M (a net gain of $1M vs not investing).
Yes the
Some background information on German tax law... (Score:1)
http://www.slate.com/id/2117309/ [slate.com]
--
Excerpt: 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 th
Not Anymore... (Score:3, Informative)
Click here [slate.com] for more info.
Article Summary is Trolling (Score:2)
"Rich Germans getting richer by exploiting the stupidity of the Hollywood system and the naivety of critics like us, who never thought to question the true motives of why these horrible, horrible movies existed. Pure and unfiltered 21st century capitalism."
Right...
Capitalism is simply what you get when people create and own property,
Loophole has been closed! (Score:2)
Hollywood's Big Loss - No more free money from Germany [slate.com]
I find it odd that Slashdot reports on this only AFTER it's no longer true