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Re:It’s time for Alphabet to spin off YouTube by scarface_74 on Friday February 24, 2023 @12:54PM (#34927450)
Let's take a simpler example. Apple Retail Stores and Apple corporate. For awhile Apple Store profits were broken out separately.

Making up numbers:

It costs Apple $800 to make a MacBook. It "sells" the MacBook to Apple Retail for $900 wholesale. Apple corporate now has revenue of $900 from the Mac it sold.

Apple Retail sells the same Mac to the end user for $1000. Apple Retail now has revenue of $1000.

Apple Corporate claims revenue of $900

Apple Retail claims revenue of $1000.

Apple claims a revenue of $1900. But it has to back out $900 of revenue so it doesn't double count it.

Apple wants to show that Apple Retail is profitable.

I used Apple instead of Disney in the example because it is much simpler to show one item being transferred from Apple to Apple retail than it is to show a group of movies being transferred to Disney and Disney selling a subscription.

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