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Comment by ubertaco | Hacker News Reader

With apologies for linking to Facebook, the creator of Final Space (Olan Rogers) has posted publicly about the news he was given that Final Space was being removed from all platforms, with licenses not being renewed, and (if he's to be believed, which...he's been trustworthy in the past) that the show was basically produced for "tax write-off" purposes: https://www.facebook.com/olanrogersofficial/posts/pfbid02fuC...

Relevant bits:

    Five years of my life.
    Three seasons.
    Blood, sweat, and tears...
    ....became a tax write-off for the network that owns Final Space.
    Yup. That's it. That's why it's disappeared everywhere in the USA. Five years of work vanished.   
    When the license is up internationally, Netflix will take it down, and then it will be gone forever. There are no more physical copies of S1 and S2, and no physical copies of Season 3 were ever made. Your memory of Final Space will be the only proof it ever existed.

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> Your memory of Final Space will be the only proof it ever existed.

And to those who know about bit torrent.

https://rarbg.to/torrents.php?search=final+space&category%5B...

His quote does not say that the show was produced for tax write-off purposes, it says that it's disappearing from platforms because of tax write-off purposes.

That could make sense if it was just Amazon removing it from their streaming service like Netflix did. Because streaming generates revenue, and would have to stop if the underlying assets were written off. But I don’t understand how that makes sense in this case, as far as I understand where they removed it from someone who bought an actual copy that does not generate recurring revenue. What am I missing?

How does the "tax write-off" work here, does anyone know?

It's called "hollywood accounting". You play games with contracting around IP rights and services as part of the content creation process into such a way that a specific entity you want reports that they took in $X for the IP rights of the content, and then spent $Y > X to actually produce the content. If you own or have significant sway over enough of the legal entities involved, you can arbitrarily set the price of "rights" over certain parts of the process to make everyone look like losers.

Like yeah, the entity that sold the film reels to the cinemas made a billion dollars off those sales, but they had to pay a billion plus one dollar for the right to distribute from one of the other entities, who paid a billion plus 2 dollars to other entities invented for this purpose, and so on. You take gains exactly where it's most convenient for contracting to, and put losses everywhere that had a contract based on royalties or similar. The vast majority of the numbers can be whatever you want, within huge bounds, so you can optimize however you want.

This is how famous actors for large productions still end up getting screwed out of a paycheck.

Probably in the same way it prevents Megas XLR from being revived or released in any form:

https://untiedmagazine.wordpress.com/2014/10/14/10-years-meg...

> So here’s the ugly truth from what I understand, and I’m neither a lawyer or accountant so my understanding could be off – Megas was written off as a tax loss and as such can not be exploited, at least domestically, in any way, or the network will get into some sort of tax/legal trouble.

From looking at the wikipedia definition of "write-off":

https://en.wikipedia.org/wiki/Write-off#Accounting

> In business accounting, the term 'write-off' is used to refer to an investment (such as a purchase of sellable goods) for which a return on the investment is now impossible or unlikely. The item's potential return is thus canceled and removed from ('written off') the business's balance sheet.

So if a "write-off" is declaring it impossible to get any ROI on investment and you then get some return on it (after e.g. reviving the show, selling DVDs of it, etc), you've lied to the federal government to reduce your tax burden.

Not an accountant. But I suspect the network assigns “value” to the show, based on its cost to produce, and ability to bring in long term revenue.

By eliminating the long term revenue, and effectively deleting the show, they’re basically destroying an asset. Which means they can claim the value of the show as a loss, and offset their profits. Thus reducing their tax burden.

Presumably the savings in tax are greater than expected long term income from licensing. So it makes sense to write off the asset and take the value of the asset as a loss.

I suspect that big part of why this makes sense, is because it often possible to claim the value of an intangible asset is at-least the cost of producing (in terms of salaries etc). So when writing off the asset, you get the ability to recoup some of the cost of production.

Say Netflix values your content at $10M. You can choose to license it to them, or instead say that you value it at $200M internally and do a write-off of that much on your books. So your total tax liability goes down by X% of $200M which could be greater than $10M.

Apparently it is some kind of benefit available to companies during a merger. There are like a thousand articles about it but I don't put a lot of faith in some random journalist nailing the details of the tax code so I'm not linking to any of them.

Perhaps a better question: If a particular show is written off, does anyone own the IP anymore? Do they still have the right to sue for copyright infringement if someone else broadcasts or distributes it?

Pretty much everything made in Hollywood is done as a tax write-off. That's the core of the business model: write-offs and incentives.

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