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axanar_myths [2016/03/21 15:49] – [Myth 1: Axanar is Making a Profit] Carlos Pedrazaaxanar_myths [2018/05/02 12:42] (current) – [Paying the Rent] Carlos Pedraza
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 {{::axabusters.jpg|}} {{::axabusters.jpg|}}
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 ====== Axanar Myths ====== ====== Axanar Myths ======
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 +//**__ __**// <wrap lo>**By [[user>cpedraza|Carlos Pedraza]]**</wrap>
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-On March 16, the Axanar website published, "MYTHBUSTERS: Debunking Three Misconceptions About Axanar Productions," asserting that "confusion has been intentionally created by a certain set of detractors."(([[http://www.axanarproductions.com/mythbusters-debunking-three-misconceptions-about-axanar-productions/|Axanar blog: MYTHBUSTERS: Debunking Three Misconceptions About Axanar Productions]], 3/16/16.))+On March 16, 2016, the Axanar website published, "MYTHBUSTERS: Debunking Three Misconceptions About Axanar Productions," asserting that "confusion has been intentionally created by a certain set of detractors."(([[http://www.axanarproductions.com/mythbusters-debunking-three-misconceptions-about-axanar-productions/|Axanar blog: MYTHBUSTERS: Debunking Three Misconceptions About Axanar Productions]], 3/16/16.))
  
 Here are the three **Axanar Myths** addressed in the post, alongside facts and questions belying the claims made on the blog. Here are the three **Axanar Myths** addressed in the post, alongside facts and questions belying the claims made on the blog.
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 ===== Myth 1: Axanar is Making a Profit ===== ===== Myth 1: Axanar is Making a Profit =====
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 ^ Axanar's Claim ^ Facts & Questions ^ Source | ^ Axanar's Claim ^ Facts & Questions ^ Source |
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 |  | 2. **IRS SCRUTINY** How much IRS scrutiny will Axanar be subject to as a non-profit organization? Potentially minimal. Larger non-profits have to submit each year a Form 990, giving the IRS an overview of the organization's activities, governance and detailed financial information. Form 990 also includes a section for the organization to outline its accomplishments in the previous year to justify maintaining its tax-exempt status. \\ \\ But note: Tax-exempt organizations with gross receipts less than $200,000 or assets worth less than $500,000 don't have to file Form 990. Instead, they file the the Form 990-EZ — the "short form" of the 990 — or even the Form 990-N, filed by organizations with gross receipts of $50,000 or less. These forms require far less stringent reporting. The 990-N is so short it is done online and nicknamed the "e-postcard." \\ \\ Once Axanar Productions [[investor group|divests itself of Ares Studios]], the value of its assets go down considerably, meaning that it may qualify for the relatively low level of scrutiny from the less detailed reports required by the IRS. | [[https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Forms/What-Is-the-IRS-Form-990-/INF14515.html|Intuit: What Is the IRS Form 990?]] | |  | 2. **IRS SCRUTINY** How much IRS scrutiny will Axanar be subject to as a non-profit organization? Potentially minimal. Larger non-profits have to submit each year a Form 990, giving the IRS an overview of the organization's activities, governance and detailed financial information. Form 990 also includes a section for the organization to outline its accomplishments in the previous year to justify maintaining its tax-exempt status. \\ \\ But note: Tax-exempt organizations with gross receipts less than $200,000 or assets worth less than $500,000 don't have to file Form 990. Instead, they file the the Form 990-EZ — the "short form" of the 990 — or even the Form 990-N, filed by organizations with gross receipts of $50,000 or less. These forms require far less stringent reporting. The 990-N is so short it is done online and nicknamed the "e-postcard." \\ \\ Once Axanar Productions [[investor group|divests itself of Ares Studios]], the value of its assets go down considerably, meaning that it may qualify for the relatively low level of scrutiny from the less detailed reports required by the IRS. | [[https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Forms/What-Is-the-IRS-Form-990-/INF14515.html|Intuit: What Is the IRS Form 990?]] |
 | Donors know about these [salary] expenses and almost unanimously approve. | The parties objecting to  Axanar's direct financial benefit are the ones whose copyrights were used to raise the money used to pay the producer's salary — CBS and Paramount Pictures. And "direct financial benefit" encompasses more than just salaries. | [[summary_of_the_lawsuit|Summary of the Legal Complaint]] | | Donors know about these [salary] expenses and almost unanimously approve. | The parties objecting to  Axanar's direct financial benefit are the ones whose copyrights were used to raise the money used to pay the producer's salary — CBS and Paramount Pictures. And "direct financial benefit" encompasses more than just salaries. | [[summary_of_the_lawsuit|Summary of the Legal Complaint]] |
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 ===== Myth 2: Axanar Built a For-Profit Studio ===== ===== Myth 2: Axanar Built a For-Profit Studio =====
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 ^ Axanar's Claim ^ Facts & Questions ^ Source | ^ Axanar's Claim ^ Facts & Questions ^ Source |
 | Axanar Productions is not a for-profit studio. In this case, the word “studio” means a business venture focused on the development and production of TV, film and web content. As we explained above, that’s not the case. | 1. Three sets of facts argue otherwise: Axanar's crowdfunding campaigns, its Annual Report and its official podcasts. First, while it now declares its //future// intention to be a non-profit, Axanar pitched its plans to develop and produce TV, film and web content in its podcasts while it was a for-profit corporation: "We might have our own … internet satellite streaming channel that will come all over the world and it’ll all come back here to Ares Studios and we can custom design entertainment. … <wrap hi>I could see us having ten channels in the future of not just Star Trek programming but all kinds of programming that we’re going to create. … And it would be going directly to Ares Studios subscribers or Axanar subscribers. We might have a fan base worldwide of 50 million people that are all donating, you know, five bucks or $9.95 a month to get what we’re producing. … We want to produce programming and entertainment whether it’s movies or shows</wrap> or podcasts like this one that are specifically targeted to the fan."(([[http://trek.fm/axp/20|Official Axanar Podcast #20, "Under Construction,"]] timecode 45:10, 3/3/15.)) | {{::axa-indie-pro.jpg?direct&100|}} \\ <wrap lo>Click image to view full size.</wrap> \\ \\ [[http://trek.fm/axp/20|Official Axanar Podcast #20, "Under Construction"]] | | Axanar Productions is not a for-profit studio. In this case, the word “studio” means a business venture focused on the development and production of TV, film and web content. As we explained above, that’s not the case. | 1. Three sets of facts argue otherwise: Axanar's crowdfunding campaigns, its Annual Report and its official podcasts. First, while it now declares its //future// intention to be a non-profit, Axanar pitched its plans to develop and produce TV, film and web content in its podcasts while it was a for-profit corporation: "We might have our own … internet satellite streaming channel that will come all over the world and it’ll all come back here to Ares Studios and we can custom design entertainment. … <wrap hi>I could see us having ten channels in the future of not just Star Trek programming but all kinds of programming that we’re going to create. … And it would be going directly to Ares Studios subscribers or Axanar subscribers. We might have a fan base worldwide of 50 million people that are all donating, you know, five bucks or $9.95 a month to get what we’re producing. … We want to produce programming and entertainment whether it’s movies or shows</wrap> or podcasts like this one that are specifically targeted to the fan."(([[http://trek.fm/axp/20|Official Axanar Podcast #20, "Under Construction,"]] timecode 45:10, 3/3/15.)) | {{::axa-indie-pro.jpg?direct&100|}} \\ <wrap lo>Click image to view full size.</wrap> \\ \\ [[http://trek.fm/axp/20|Official Axanar Podcast #20, "Under Construction"]] |
-| | 2. Axanar's crowdfunding campaign pitches the creation of additional works beyond Star Trek, with no indication that this was to be a non-profit endeavor;(([[https://www.kickstarter.com/projects/194429923/star-trek-axanar/description|Axanar Kickstarter campaign page]], retrieved 3/1/16.)) The non-profit characterization started being used //after// the lawsuit was filed.  | [[https://www.kickstarter.com/projects/194429923/star-trek-axanar/description|Axanar Kickstarter campaign page.]] |+| | 2. Axanar's crowdfunding campaign pitches the creation of additional works beyond Star Trek, with no indication that this was to be a non-profit endeavor;(([[https://www.kickstarter.com/projects/194429923/star-trek-axanar/description|Axanar Kickstarter campaign page]], retrieved 3/1/16.)) The non-profit characterization started being emphasized //after// the lawsuit was filed.  | [[https://www.kickstarter.com/projects/194429923/star-trek-axanar/description|Axanar Kickstarter campaign page.]] |
 | Axanar Productions is entirely focused on making Star Trek fan films. | Not according to what was told to backers of the [[axanar_kickstarter_details|Axanar Kickstarter]] campaign: "This [studio] will be the permanent home of Axanar Productions and allow us to do more than just //Axanar//, from other adventures in the Star Trek universe and beyond. David Gerrold (author of 'The Trouble with Tribbles') is already lined up to shoot his sci-fi series, //Running Dark//, here."(([[https://www.kickstarter.com/projects/194429923/star-trek-axanar/description|Axanar Kickstarter campaign page]], retrieved 3/1/16.)) | {{::ks-studio.jpg?direct&100|}} \\ <wrap lo>Click image to view full size.</wrap> | | Axanar Productions is entirely focused on making Star Trek fan films. | Not according to what was told to backers of the [[axanar_kickstarter_details|Axanar Kickstarter]] campaign: "This [studio] will be the permanent home of Axanar Productions and allow us to do more than just //Axanar//, from other adventures in the Star Trek universe and beyond. David Gerrold (author of 'The Trouble with Tribbles') is already lined up to shoot his sci-fi series, //Running Dark//, here."(([[https://www.kickstarter.com/projects/194429923/star-trek-axanar/description|Axanar Kickstarter campaign page]], retrieved 3/1/16.)) | {{::ks-studio.jpg?direct&100|}} \\ <wrap lo>Click image to view full size.</wrap> |
 | If the Axanar team wants to make other films, those will be done through a separate production company, as is standard business practice in Hollywood. | This is true. Many production companies develop films, [[http://www.raindance.org/development-finance-for-films/|preparing them for production]], and then creating a separate Limited Liability Company in which investors put in money solely for the production of a specific film. The development company often becomes one of the equity partners in that new company. It retains a financial, income-generating interest in each film. So while the two companies are legally separate, they are not completely unrelated. | [[http://www.raindance.org/development-finance-for-films/|Raindance: Development Finance for Films]] | | If the Axanar team wants to make other films, those will be done through a separate production company, as is standard business practice in Hollywood. | This is true. Many production companies develop films, [[http://www.raindance.org/development-finance-for-films/|preparing them for production]], and then creating a separate Limited Liability Company in which investors put in money solely for the production of a specific film. The development company often becomes one of the equity partners in that new company. It retains a financial, income-generating interest in each film. So while the two companies are legally separate, they are not completely unrelated. | [[http://www.raindance.org/development-finance-for-films/|Raindance: Development Finance for Films]] |
-| The rented warehouse Axanar converted to a sound stage, which they call Ares Studios, is just like that used by Star Trek: New Voyages and Star Trek Continues. | Not according to the Axanar Annual Report, 2015, Revised, which notes that other fan productions' studios are single-purpose — with standing sets used only for making their own films. Axanar's sets are not standing; according to their annual report, they're expressly designed to be easily disassembled so Axanar can earn money from the studio: “At Axanar, <wrap hi>we are building a fully-functioning sound stage that we will also be able to rent out to support the production and the studio. That means no standing sets.”</wrap>(({{:axanar-annual-report-v2.pdf|Axanar Annual Report, 2015, Revised}}, p. 11, 12/15/15.)) | {{ ::ar-p015.jpg?direct&100|}} \\ <wrap lo>Click image to view full size (Axanar Annual Report, 2015, Revised, p. 11.)</wrap> |+| The rented warehouse Axanar converted to a sound stage, which they called Ares Studios, is just like that used by Star Trek: New Voyages and Star Trek Continues. | Not according to the Axanar Annual Report, 2015, Revised, which noted that other fan productions' studios are single-purpose — with standing sets used only for making their own films. Axanar's sets are not standing; according to their annual report, they're expressly designed to be easily disassembled so Axanar can earn money from the studio: “At Axanar, <wrap hi>we are building a fully-functioning sound stage that we will also be able to rent out to support the production and the studio. That means no standing sets.”</wrap>(({{:axanar-annual-report-v2.pdf|Axanar Annual Report, 2015, Revised}}, p. 11, 12/15/15.)) | {{ ::ar-p015.jpg?direct&100|}} \\ <wrap lo>Click image to view full size (Axanar Annual Report, 2015, Revised, p. 11.)</wrap> |
  
-==== Paying the Rent ==== 
 [{{ ::ares-studios.jpg?250|**ARES STUDIOS** is the Valencia, Calif., soundstage being retrofitted by Alec Peters with funds raised by donors to //Axanar//.}}] [{{ ::ares-studios.jpg?250|**ARES STUDIOS** is the Valencia, Calif., soundstage being retrofitted by Alec Peters with funds raised by donors to //Axanar//.}}]
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 +==== Paying the Rent ====
  
 <wrap lo>//See also: [[investor_group|Investor Group Plans to Buy Axanar Studio Assets]]//</wrap> <wrap lo>//See also: [[investor_group|Investor Group Plans to Buy Axanar Studio Assets]]//</wrap>
  
 Buried in this part of the FAQ, Axanar discloses "a small [[investor_group|group of backers and fans]] have developed a plan to create a separate company to take over the management the sound stage, pay the rent and reimburse Axanar Productions for the cost of the build-out.  That company will assume the $250,000 liability for the remainder of the lease. To do that, the new company will need to be a for-profit entity and raise investment dollars for capital."(([[http://www.axanarproductions.com/mythbusters-debunking-three-misconceptions-about-axanar-productions/|Axanar blog: MYTHBUSTERS: Debunking Three Misconceptions About Axanar Productions]], 3/16/16.)) Buried in this part of the FAQ, Axanar discloses "a small [[investor_group|group of backers and fans]] have developed a plan to create a separate company to take over the management the sound stage, pay the rent and reimburse Axanar Productions for the cost of the build-out.  That company will assume the $250,000 liability for the remainder of the lease. To do that, the new company will need to be a for-profit entity and raise investment dollars for capital."(([[http://www.axanarproductions.com/mythbusters-debunking-three-misconceptions-about-axanar-productions/|Axanar blog: MYTHBUSTERS: Debunking Three Misconceptions About Axanar Productions]], 3/16/16.))
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 ===== Myth 3: The Lawsuit is About Money ===== ===== Myth 3: The Lawsuit is About Money =====
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 ^ Axanar Claim ^ Facts & Questions ^ Source | ^ Axanar Claim ^ Facts & Questions ^ Source |
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-**Keywords** {{tag>lawsuit commercial defendants plaintiffs}}+<wrap right>**Keywords** {{tag>lawsuit commercial defendants plaintiffs fact_check}}</wrap>