Monday, 15 March 2010

Hollywood Babble On & On #469: The British Complication

Welcome to the show folks...

Warm up the tea, and have yourself a crumpet, because I'm taking this post on a little expedition to Jolly Old England. (While I stay in Canada, bereft)


Okay, this needs a little history lesson to begin with. Back in the late 1970s some folks started a British film company called Goldcrest Films. The purpose of the company, run by a Canadian named Jake Eberts, was to make British films that could then be sold around the world. A complex network of corporations, trusts, and financial partnerships were set up to take advantage of tax and accounting laws on both sides of the Atlantic.

After a slow start the company took off, dominating awards shows and making money with films like Gandhi, The Killing Fields, Chariots of Fire, and Local Hero.

Feeling their oats, and after some changes in management, the company then tried to compete with Hollywood at its own game. They tried making bigger films, with big American stars, and was promptly smacked with a string of big flops. Attempts were made to rearrange the company, but the overly-complex corporate structure, and crippling debt was just too much to handle and the company collapsed.

Now the owners of the Goldcrest name revived the company first as a post-production service, and then gradually evolved into an investment partner in films like
Tropic Thunder.

Well this new Goldcrest is going back to its roots, investing in independent British films.

This is nice for indie producers in Britain, but I think what's telling is the reason they're investing in British films.


Yep, apparently a change in British tax law means that Goldcrest has to start spending some money in Britain, or get nailed. Also, according to Nikki Finke's report, the words "ferociously complicated" are used to describe the company's corporate-financial paperwork.

Looks like some companies never learn.

Simplicity is always best in business, because complications may seem clever at first, but they will always bite you on the ass eventually. Such trans-Atlantic corporate complexities and playing for tax breaks were what sank the company originally.

Let's hope that this Goldcrest does a little archaeology on themselves, and learns from the company's past mistakes instead of repeating them. I would also add that any company should avoid doing anything that might attract the attention of governments, that's a recipe for trouble.


The venerable British Broadcasting Corporation has recently ended the 6 month freeze on development financing. This means that the BBC will now start paying their share of the bills when it comes to creating new TV content with their independent production partners.

Now the freeze happened because the Beeb says that they're running short of money, and are in a bit of a bind financially. You see the literary costume dramas, absurd comedies, and mystery shows that international audiences buy up with wild abandon, don't really win that many domestic eyes. Also critics say that a lot of their attempts to be edgy and hip, are neither edgy or hip, just grating. Outside of Doctor Who, the BBC doesn't really have the sort of water-cooler hits it once had.

The BBC is supposed to be financed by the television license system, where British people pay a tax for owning TVs and radios. However, the license system has to battle the common crime of license evasion, which has risen to the level of sport in the UK, and governments that tend to find other uses for that money than its original intent.

Which makes the BBC's position tenuous, but also makes me ask a question.

Was the 6 month development financing freeze matched with a freeze on hiring new senior management, raising their salaries, paying for their perks and/or bonuses?

I think probably not.

You see, the BBC is a bureaucracy at heart. Bureaucracies serve one purpose, which is to serve the bureaucrats who run them. It doesn't matter if the organization's mission is to produce and broadcast television, or managing vacant farms and widget production, the mission of the bureaucrat is to build personal empires that ensure their rise in rank/pay, and their own job security.

That means toadies, minions, and henchmen, and lots of them, all suckling on the organizational teat.

And don't let the fact that the BBC was founded by the British government fool you, because this happens all too easily in private corporations. Especially private corporations allow the management to unduly influence the board of directors to favor their mini-empires over the good of the shareholders/viewers.

Which is why organizations must be simple. Because not only do complicated financial deals bite your ass, complicated bureaucracies give lots of nooks and crannies for time-servers, space-wasters, and conniving kingpins to hide in.

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