[amethyst]

It almost always has to do with the details of EBITDA [1], in this case depreciations/writeoffs and amortized costs, especially if/when a bunch of funding may have been subsidized by governments along with healthy tax breaks [2].

1: https://en.wikipedia.org/wiki/Earnings_before_interest,_taxe...

2: https://en.wikipedia.org/wiki/Movie_production_incentives_in...

[ahazred8ta]

It's related to a 1979 IRS case that says you have to destroy unsellable merchandise before you can write it off as a loss. This is why a lot of paperback books get shredded instead of sitting on a backlist. https://en.wikipedia.org/wiki/Thor_Power_Tool_Co._v._Commiss...

[amluto]

This movie is IP, not a physical thing. Which leads to my question: suppose someone does leak it and the studio “destroys” it. Then the studio sues for copyright infringement and wins. Did they just commit retroactive tax fraud?

This whole area of law seems utterly absurd.

[gruez]

>especially if/when a bunch of funding may have been subsidized by governments along with healthy tax breaks [2].

Does it matter? Realistically speaking the state only cares about the jobs that are created. Whether the movie is destroyed or not, the jobs have been created regardless. There's arguably the aspect of [famous movie] was made shot/produced/edited in [state], but I doubt many people care about where an animated comedy is produced.

[sitkack]

Many people that work on films are paid in residuals. Killing the film robs them of income.

[williamcotton]

EBITDA is nonsensical and it makes my brain implode when I realize how many investors utilize the metric. My brain turns into a black hole when I realize how many companies use it as an internal metric!

[gruez]

>EBITDA is nonsensical and it makes my brain implode when I realize how many investors utilize the metric

From wikipedia:

"EBITDA is widely used when assessing the performance of a company. EBITDA is useful to assess the underlying profitability of the operating businesses alone, i.e. how much profit the business generates by providing the services, selling the goods etc. in the given time period. "

There's plenty of ways that EBITDA can be misleading, but so can net income. Same goes with other statistics like the unemployment rate or GDP. They have flaws, but that doesn't mean they're "nonsensical and it makes [your] brain implode"

[hansvm]

EBITDA says something about the profitability of the company's current offerings if all the corporate bullshit were amortized over time. It's a useful lens if you have a wildly profitable offering that doesn't look like it in a given accounting regime (Amazon for 10-20 yrs, intentionally), and it's a deceptive ploy to part investors from their money in other contexts.

No metric is perfect; in addition to asking how well a company meets a metric, take the time to ask what "meeting that metric" might mean and how that relates to your goals.

[gnicholas]

EBITDA also does not affect the calculation of taxes at all. It is an accounting concept, not something the IRS cares about.