TO: Canadian Department of National Defence
Greetings from Hollywood, where - to quote Janeane Garofalo - people dress like hippies and act like the mafia.
I read with interest about your recent issues regarding the purchase of very expensive F-35 fighter jets.
It seems the cost has risen, from $9 billion to $16, to $25 billion, before a single plane has been built! And without opening the procurement process to competitors, or actually including the taxpayers who are footing the bill.
Well, played DND. If you're waiting for us to say something caustic about your financial oversight, well - keep waiting!
We're Hollywood. No one knows better than us that the last thing you want to be is transparent about big ticket buys.
Now, $9 billion is nothing to sneeze at, but I was impressed to see your Minister of Defence Peter MacKay announce he has nothing to apologize for, that the whole issue is nothing more than an accounting discrepancy - or, as MacKay calls them, sunk costs.
Which is why I write. We at Paramount Pictures would like to hire the Department of National Defence to work in our Accounting Department.
At first glance, you might think, what could a sovereign nation's Defence Ministry possibly have in common with a major Hollywood movie studio?
Let me tell you: long before Fannie Mae, Freddie Mac or Lehman Bros. reinvented the financial services industry, Hollywood was busy reinventing accounting.
Exhibit A: Coming to America. That was the 1988 Eddie Murphy film Paramount produced, from an original idea by Eddie Murphy, that turned out to be borrowed from columnist Art Buchwald, who sued us.
Once he did, we cut a deal that included paying him extra if the movie was a hit.
So Coming to America, which cost $36 million to produce, generated $350 million in worldwide box office which we in Accounting managed to transform into a net loss.
That's not easy to do! Trust me. You'll find out once you get down to the nuts and bolts of trying to slip in $9 billion worth of sunk costs you neglected to mention while trying to convince drowsy Canadians that you really, really must have state-of-the-art jets.
Of course, unlike your military procurement people, who - from what we hear - only get to procure once every 25 years, we get plenty of practice sinking our hits and transforming them into red ink wretches.
Warner Bros. did it with the first ($46 million) Batman picture in 1989, which grossed close to $300 million, but - on paper - lost $20 million.
Fox did it with Napoleon Dynamite.
We all do it. We turn hits into dogs, with a few carefully considered line items.
You have sunk costs? Hollywood has sunk profits. (And we're not just talking Titanic 3-D here!) What we're trying to say is, you speak our language over there at the Canadian Department of National Defence.
From what we can glean, it's getting hot up there for Minister MacKay and the rest of you who keep the books that pay for the gear that keeps Canadians safe when they sleep at night.
Trust us: you can try to change the subject, blame accounting discrepancies - or accept our invitation to join us here in the original home of accounting discrepancies.
The weather rocks. The girls are amazing and having an on-the-lot parking pass doesn't exactly suck when you're trying to convince some former swimsuit model with a shaky grasp on English that accounting is actually a kind of French philosophy, minus the floppy hair and nicotine-stained teeth.
If military procurements really rock your world, let us remind you of two of our favourite words here in Accounting: Transformers 4.
Even though the first three, which grossed $3 billion around the world, have scarcely earned a dime.
Original Article
Source: calgary herald
Author: Stephen Hunt
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