GMTR'S Accounting Philosophy
The following two practices by the major studio set the stage for GMT’s philosophy.
- Hollywood Creative Accounting is a derogatory term commonly used to refer to the accounting practiced of studio/distributors and that may include everything from actual dishonest practices in reporting and dividing up the revenues generated by a given film at the exhibitor and distributor levels to sharp negotiating tactics used in conjunction with drafting the distribution deal. (See 337 Reported Business Practices of the Major studios)
- Actual Breakeven. The point at which revenue generated by exploitation of a motion picture equals the costs incurred in the production and/or distribution of such motion picture for the applicable entity (e.g., the film’s distributor). Breakeven in a film context is a contractually defined term, and a significant number of variations have been used to signify specific points in film’s revenue (e.g., artificial breakeven, breakeven, cash breakeven, first breakeven, rolling breakeven, etc.) (See 337 Reported Business Practices of the Major Studios)
GMTR is Different – The House Nut
GMTR’s purpose is to provide worldwide marketing and distribution services for selected products and to perpetuate its’ operation by continually funding the corporate overhead, the “House Nut”. The profits from marketing and distribution fee-for-service are to be used to shore-up the corporate “House Nut” short fall, if necessary, and the excess returned to investors, producers and net-participants.The “House Nut” is fixed and variable expenses based on real costs to operate. Examples of the variable expenses include basic travel business class for 4 hours or more in duration, gasoline/mileage for company business, communication costs, postage, corporate legal and accounting.
GMTR’s operating annual budgets are traditional in business practices in covering the “House Nut”. Overhead of guild dues, trade association memberships, facilities, communications, insurance, utilities, staff, benefits, accounting, legal, research, corporate promotion, and taxes and so forth. The amount of the “House Nut” is based upon complexity of a film’s marketing plan, if the film gets ‘legs’ or not, and use of “distribution partners or use of in-house staff or contractors”.
Each selected product is an established corporate entity such as, “Film Title” LLC, and is accounted totally separate from all other films. The film marketing and distribution expenses include, for example, prints and advertising, publicity, travel, film festivals, and events, freight, audience research, film insurance, graphics, artwork, warehouse, storage, domain hosting, web site, Internet marketing, film specific communications, and other necessary marketing practices.
It is the practice philosophy of GMTR to provide net-participants with password protected on-line accounting information for their film. This on-line information has certain limitations of use such as seeing other’s contractual share.
How it works?
A contractual net-participant receives a password and from any Internet connection by remote access enters the accounting software to view current film revenues, expenses and film distribution status. The GMTR “House Nut” accounting books are not accessible, just the film’s results.