Because, if the show is successful in the long term, it gives you the
authority to go back and audit the show so you *can* get something, maybe,
years down the road. If you don't get it into your contract, you can
never go back. So you just swallow it and hope you can do something with
it someday. It just becomes a bitch to prove they made a profit, because
they control the books.

For instance...we know that the first 3 years of B5 made a profit for WB
because WB has a policy of not renewing unless a profit is being made.
Pure and simple. We've heard, off the record, that the show posted
profits of between $1.5-2 million per season. (And mind, that's while
we're still in production, spending money to make the show. The instant
you stop production, and there's no more negative cash flow into filming,
it's all income from that moment on.)

But the actual, official profit statement sent to Doug and I for season 2
showed that we were about $42 million in the red. The only way for that
to happen is for not one commercial to ever be sold, not one merchandising
deal ever to be made, not one cassette sold overseas...nada.

The process is to assign percentages to various arms of the company. The
distribution fee is (these are off-the-cuff numbers, not necessarily
accurate but indicative) 30%; then the overhead is 40% of all monies; 25%
for publicity; 30% for production of prints, shipping, and the like. So
what you're looking at here is over 100% in fees...and when you start from
that position, it takes you YEARS to whittle away at the production costs,
costs of film...by which time additional fees have been charged against
you...and on and on and on....


jms