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Cake day: July 23rd, 2023

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  • Well, I think there is a question too of the value that theses assets have when brought directly to streaming and the reason we’re seeing studios start to rethink this strategy and schedule more theatrical runs

    However from what you described the scenario is similar and these situations also occur with more traditional assets, for instance a manufacturer who brings a product to market that significantly underperforms because of an unforeseen event, if the assets market value drops below what has been accounted for they write down that difference as a loss. This loss offsets other gains the company recognizes and therefore rescues their tax burden. Consumers are able to take advantage of this as well if they experience a loss in their investments (capital losses)

    For businesses and consumers the ability to write down losses encourages additional investment, and the highly subjective nature of valuation allows companies like the studios to use creative strategies to offset other costs like Discovery’s acquisition of Warner Media