Current tax laws make it more profitable for a movie studio to burn a finished film than to let you see it.
April 16, 2026
Original Paper
Perverse Tax Incentives and the Destruction of Creative Works
SSRN · 6577898
The Takeaway
We’ve seen studios like Warner Bros. cancel and delete finished movies like 'Batgirl,' and this paper explains the perverse logic: the tax code allows a bigger write-off for 'destroyed' assets than for 'failed' products. If a studio releases a movie and it flops, they lose money; if they permanently delete it, the government effectively pays them to make it go away. This creates a systemic incentive to destroy art and culture for a better quarterly balance sheet. It means that the government is essentially subsidizing the destruction of creativity. For fans, it’s a realization that some of the best art of our generation may never be seen simply because the accounting math says it's worth more as a zero.
From the abstract
<p>In late 2023, Warner Bros. Discovery announced that it would be permanently shelving <i>Coyote vs. Acme</i>, a complete and hotly anticipated film about popular Looney Tunes characters. This announcement was widely understood – and admitted by Warner Bros. Discovery in its SEC filings – to be motivated, at least in part, by a desire to “write off” the film’s costs for tax purposes. This article is the first to (i) provide a full account for the tax rules that govern what constitutes a “loss”