www.forbes.com: Disney saved $570.4 million on the cost of making its Star Wars saga thanks to an ingenious and perfectly legal maneuver which led to seven of the productions generating a $1.04 billion profit at the box office according to new research.
10 comments:
That's a very smart idea on behalf of the British studio. It's not a new thing for companies to move production overseas in all types of industries, like manufacturing and labor etc. But I have never heard of film moving their production to a different country because the studios there are cheaper. I thought that most of production was in Hollywood or LA or somewhere similar, on account of it being such a physical industry... you have to be in the same room as people making connections and filming things together to thrive. Apparently not! That's great though, perhaps something similar could be tied to theater. I guess that already happens a lot with touring overseas. The catch to them producing in that studio is also very clever. There should be more mutually beneficial things like that in the film industry. I also like the principle of, if these foreign film studios are coming in and using British studios, then they should be contributing to the British economy and society in other ways as well.
It is hard to be excited about a company that makes more than I and everyone I see in my entire life will ever have throughout our lives in one year. Disney had a net revenue of over 7.69 billion last year, a sum that could make almost one thousand families set for their entire lives financially, without having to worry about working a day in their lives. A sum that is harvested from working families to prop up unconscionable billionaires who only know how to hoard their wealth no matter how it affects others. These tax loopholes drip dry the money that most families scrimp, sweep, and toil to get a hundred thousandth of if they are so lucky to get even that. The amount of hops and ducks around tax law to get out of paying to fund life-saving government programs is absurd and the millions of dollars they spend to get out of spending billions is a farce that spits in the eyes of their workers. The whole other sham of this also surrounds the shows and movies that are at a “loss” in net revenue where actors get steamrolled in their contracts. Actors who are the face of hundreds of millions of dollars grossing movies get pennies when they negotiate a contract with their studio to get a piece of the funds after all revenue is taken in and all expenses are paid. Except the costs are jostled around so a successful movie making half a billion dollars fails to even break so the actors don’t even receive a dime.
I remember reading a similar article a few weeks back about how companies were filming in the UK in order to cut down on production costs. It's a smart move to make on behalf of the film company, and I'm sure the UK benefits economically from it as well. It encourages filming in the UK, investing in their economy, and opens up jobs for people who live there. All around, it seems like a pretty good deal on both ends. I don't know if this is applicable here but I remember reading in the other article about how they will often set up other companies to pay the lead actors, especially if they aren't from the UK. Super famous actors cost a lot of money to have on set, so it makes sense for them to pay them separately, so that they can still reao the benefits from filming in the UK.
What really gets me, though, is how much effort went into building this whole interconnected Star Wars universe, MCU-style. Disney could’ve just stuck with a new trilogy, but no—they went all in with spinoffs and even series like Andor. The risk paid off, thanks in part to the U.K.'s Audio-Visual Expenditure Credit. It's kind of hilarious to think how U.K. taxpayers unintentionally became contributors to Disney's galactic empire. Also, the behind-the-scenes breakdown of how this system works is fascinating. Setting up separate U.K.-based companies for each production? Genius. It’s like Disney figured out how to legally maximize every dollar, ensuring a consistent flow of reimbursements. And the fact that every cent saved gets reinvested into other productions or the economy makes this win-win for both Disney and the U.K. Even though Disney still hasn’t fully recouped the $4 billion they dropped on Lucasfilm, moves like these make me think they’re playing the long game. I mean, with more Star Wars movies, series, and even new trilogies on the horizon, they’re building this thing to be a perpetual cash machine. Honestly, if this doesn’t prove that smart business decisions can shape pop culture, I don’t know what does.
I think this is a very interesting topic to discuss. For me, I think it’s smart for the production companies to utilize their knowledge and connections world wide to bring down costs of making such huge movies that take millions to make. If the finances work out, why not use techniques to save money like anyone would in that situation. On the other hand, I wonder what kind of negative consequences might be a result of using such a system. There is so much money and influence being traded back and forth along with huge companies that benefit from any kind of money saved even unethically. Considering this, I would be interested to talk to people from the UK who are a part of this industry and hear what they think about this process of saving money. Overall, I am not surprised that something like this exists for large companies and I would like to learn more about how it works and how it might affect employees and workers both in the US and UK.
It is interesting to me to see how Disney did business after buying Lucasfilm. the purchase was a risky one and I'm not sure whether or not I like that they made the purchase. I, like most people, thoroughly enjoyed The Mandalorian, but have mixed feelings about the rest of their new media. I think that the way they used the UK laws was really a really smart way to save money. Reading the title of the article I thought that it was going to be revealed that Disney was using some sort of unethical loophole to get more money. While what they did was definitely a loophole, I'd say it was a perfectly ethical one. By going to the UK, Disney created about 37,000 jobs, which is absolutely insane. After seeing how well the laws put in place in the UK worked out for both parties, it makes me wonder why other places don't have similar laws. I think that it may be because some people would see it just as their money being used to fund movies, instead of the ripple effect that it would cause.
This is a crazy kind of loophole to think about. So interesting to me is the lengths that people go to cut costs and honestly I am kind of impressed if you have the genius mind to think of this solution to save money. Budgeting in and of itself is a whole crazy world and I am amazed by the magic that they work there, especially when they keep the whole thing legal! I do find it crazy though that “U.K. taxpayers have covered 18% of the $3.2 billion (£2.4 billion) costs” of these Star Wars pieces. That is just insane! This was very interesting to me as well, “Indeed, the U.K. benefits are so lucrative that in October last year it spurred California's governor Gavin Newsom to more than double the state’s film and tax incentives in order to tempt more movie studios to film there.” The fact that this production style is so beneficial for the economies of the United States as well as the UK is crazy, the fact that it is benefiting people in the country's but also making some really wicked killer films. However, at the end of this I do find that it's still insane that Disney still cannot cover the cost of buying Lucasfilm, and will have to see how their next release does.
It is reassuring that such a work around for Disney was also incredibly beneficial to the UK economy as at first it seemed as though this was a flaw in the system that was being taken advantage of instead of an explicit benefit that the UK was trying to incentivize more production to happen in the UK. Nonetheless, it is surprising how much the UK is willing to directly invest in programs such as these when the budgets do become as large as they are for a film in the Star Wars series. Further, I wonder if similar programs will begin in other countries (especially those with canonically important filming locations across the globe), especially considering how the article mentions that Governor Newsom more than doubled film and tax incentives in California. Lastly, I wonder how accessible this program is to production companies and if this is more of an incentive for larger businesses such as Disney to participate or if smaller companies are the primary beneficiaries of this compensation.
This article was a little challenging for me to comprehend, since it’s hard for me to visualize finances, but I think I understand the overall concepts. The legislation in the UK is structured so that studios that outsource to make movies in the UK aren’t spending as much overall. I don’t like that UK taxpayers basically covered 1/5 of the costs of these productions. However, after reading further, I’m relieved to know all of the good this brought to the UK’s economy, with the creation of many new jobs, a big return on investment. It’s really interesting to learn the ways big businesses go about expanding. Disney especially is really creative in their ways of making money, especially when trying to buy Lucasfilm and others in the future. I’m glad that their plan paid off and I hope at the end of it, they get what they want.
I’ve always been such a big fan of Disney and the Star Wars franchise, so I found this article to be very interesting. It’s kind of crazy how Disney saved that much money just by filming in the U.K. and taking advantage of these tax incentives. It kind of makes me wonder how much more money Wicked would have cost if it was filmed in the U.S. anyway. I love how this move not only benefited Disney but also created jobs and boosted the U.K. economy. As someone who loves visiting Disney parks, especially Galaxy’s Edge, (It's literally the back of my phone case) it’s clear how much effort goes into making these worlds feel real and immersive. Knowing that Disney's strategic decisions, like filming in the U.K., help fund these experiences makes me appreciate them even more. However at the same time, I do wonder about the fairness of using taxpayer money to support these billion-dollar companies, and if that's truly ethical.
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