I’m pretty sure that’s not the case and that they can’t write it off as a loss unless they cancel it. I’ve specifically read about that happening with HBO, Disney and Netflix.
To chalk it up to stupidity when it’s a reoccurring thing among big businesses is stupidity; they’re doing it for a reason and typically that reason is money.
You “pretty sure” and think you read something? I’m telling you, all production costs are tax deductions. As long as they’re actual business expenses, not personal ones. It doesn’t matter if the show is a success. I’m telling you that’s how accounting works. There’s no check box if a show is successful.
Promoting the show is a different cost that they will save now that they cancelled it. Link the article you read.
Ooh so it’s both
Kevon is right, one tax benefit is the cost of the show: whether they cancel it or not they get to write off those expenses, and they get a tax break there
Chris would be correct too though: if Netflix holds the IP as assets on the balance sheet, they’d be held at some present value of expected royalties. When they cancel the show id imagine that asset value takes a shit, that’s a write off, so tax benefit there
That said no business does this to make money from the tax asset, you have to lose more than the government gives you back
More likely Netflix is high off it’s own farts and thinks just money can make cinema magic and it clearly can’t.
