Ah, we have another one for the nostalgia file: the return of Wall Street to Hollywood. Back in the day — when home video was still seen as a risky business — tax law favored investment in movies. A lot of doctors and dentists bought shares in partnerships that invested heavily in the movies. Sure, there were some money-makers, but, as the doctors and dentist learned, sometimes you have to finance a lot of duds before you get to a real winner.
Now the investors are back and more eager than ever to get them some of that Hollywood glitter. In the deals of old, the investors partnered with the studio, sharing the risk based on overall dollars put into the production. The upshot was that there was a solid system behind the movie-making process. You know, studios, sound stages, payroll departments, marketing teams. The downside was that a lot of bad movies were made in the 80s. These days, in an attempt to “bypass” the studios, investors are making deals with producers directly.
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