English Entertainment
Star India’s contribution to 21 CF operating profit doubles
BENGALURU: Star India’s contribution to the third quarter (quarter ended 31 March 2018, Q3-2018) numbers of Rupert Murdoch-led Twenty-First Century Fox Inc (21st Century Fox) more than doubled as compared to the corresponding year ago quarter according the company’s earnings release. Star India is a part of 21st Century’s cable network programming (CNP) segment. Star India’s contributions along with those of Fox Network Group International (FNG International) are reflected as those of international affiliates’ numbers in 21st Fox Century’s financial statements.
21st Century Fox reported total quarterly revenue of $7.42 billion, a two percent decrease from the $7.56 billion of revenue reported in the prior year quarter. This decrease principally reflects the absence of advertising revenue generated by Super Bowl in the prior year in the television segment partially offset by higher affiliate, syndication and advertising revenue at the CNP segment, the company stated.
21st Century Fox reported quarterly income from continuing operations attributable to its stockholders of $876 million ($0.47 per share), an eight per cent increase compared with $811 million ($0.44 per share) reported in the prior year quarter. Excluding the net income effects of impairment and restructuring charges, other, net and adjustments to equity losses of affiliates, adjusted quarterly earnings per share from continuing operations attributable to 21st Century Fox stockholders was $0.49 compared to the adjusted result of $0.54 for the corresponding quarter of the prior year. Q3-2018 operating income before depreciation and amortisation (OIBDA) reflects an approximate $60 million charge from higher compensation expense due to the modification of equity awards resulting from the proposed Disney and New Fox transactions, which negatively impacted adjusted earnings per share by $0.02 per share, 21st Century Fox said.
Commenting on the results, 21st Century Fox executive chairmen Rupert and Lachlan Murdoch said, “We continue to make operational and financial progress against near-term objectives as we also work to close our strategic transactions. Our cable segment delivered its highest earnings ever in our fiscal third quarter, propelled by sustained double-digit gains in domestic affiliate revenue. Creatively, we are firing on all cylinders. Our stand-out programming continues to drive up the value of our video brands to distributors, as well as build our direct relationship with consumers, as we’re demonstrating with the successful inaugural season of Indian Premier League on Star Sports and Hotstar platforms. Our film studio delivered box-office and awards momentum that we expect to continue with the upcoming release of Deadpool 2.”
Cable network programming
CNP revenue for Q3 2018 increased by 2.7 per cent to $4,419 million from $4,024 million in the corresponding year ago quarter. The 21st Century Fox earnings release said that CNP quarterly OIBDA increased by 16 per cent as against the prior year quarter to $1.68 billion, driven by a 10 per cent revenue increase on higher affiliate, syndication and advertising revenue partially offset by a six per cent increase in expenses. The increase in expenses was primarily due to the first year of sublicensed Big Ten rights and higher sports and entertainment programming costs at FNG International, partially offset by lower sports programming costs at Star India.
CNP’s international affiliate revenue grew by 14 per cent driven by rate and subscriber growth at both FNG International and Star India. International advertising revenue declined by one per cent as strong growth at FNG International was offset by the negative impact of a shift in timing of cricket matches at Star India. International OIBDA contributions were 23 per cent higher than the prior year quarter as Star India’s contributions more than doubled but were partially offset by lower contributions at FNG International, wherein higher costs more than offset the higher reported revenue.
CNP’s domestic affiliate revenue increased by 10 per cent driven by contractual rate increases across all of the segment’s domestic brands and domestic advertising revenue increased by three per cent from the prior year period due to higher pricing at Fox News. Domestic OIBDA contributions increased by 15 per cent over the prior year quarter reflecting strong growth across all of its domestic brands.
Television
The television segment had 32 per cent lower revenue of $1,149 million for the quarter under review as compared with $1,690 million in Q3 2017. Television reported quarterly segment OIBDA of $78 million, a decrease of $112 million compared to Q3-2017. The decline principally reflects the absence of advertising revenue and OIBDA generated from the broadcast of the Super Bowl in the prior year quarter. Additionally, Q3-2018 results reflect revenue and OIBDA declines from lower National Football League (NFL) post-season ratings and three fewer NFL broadcasts in the current quarter versus the prior year quarter that more than offset double-digit retransmission consent revenue growth and improved entertainment OIBDA contributions.
Filmed entertainment
Revenue from the filmed entertainment segment for Q3 2018 was almost flat. It declined by 0.6 per cent to $2,243 million from $2,256 million reported for the corresponding year ago quarter. Filmed entertainment generated quarterly segment OIBDA of $286 million, a 23 per cent decrease from the $373 million reported in the prior year. The OIBDA decline reflects lower contributions from the television production business due to higher deficits related to more new drama series delivered during the quarter and the absence of revenue from the prior year subscription video-on-demand licensing of The People v. O.J. Simpson: American Crime Story. Additionally, during the quarter, the company incurred costs supporting FoxNext Games’ successful inaugural mobile game release, Marvel Strike Force. The segment’s revenue of $2.24 billion for the quarter was similar to Q3 2017 as higher theatrical revenue at the film studio reflecting the successful worldwide theatrical performances of The Greatest Showman, The Shape of Water and Maze Runner: The Death Cure was offset by lower worldwide syndication revenue at the television production business.
Also Read :
Lachlan Murdoch opens up about Fox & Star TV’s billion-dollar EBITDA target
Comcast may renew bid for 21st CF
English Entertainment
Warner Bros. Discovery shareholders approve Paramount deal
Investors wave through a $111 billion megamerger but deliver a stinging, if toothless, rebuke over half-a-billion-dollar goodbye packages
NEW YORK: The shareholders said yes to the deal. They said no to the cheque. At a virtual special meeting on Thursday that lasted barely ten minutes, Warner Bros. Discovery investors voted overwhelmingly to approve Paramount Skydance’s $111 billion acquisition of the company — and then turned around and voted against the lavish exit pay packages lined up for chief executive David Zaslav and his fellow outgoing executives.
Not that it will make much difference. The compensation vote is purely advisory and non-binding. The Warner Bros. Discovery board can, and almost certainly will, pay out as planned.
But the symbolism stings. It is the second consecutive year that WBD shareholders have voted against the executive compensation packages, and this time they had good reason. Zaslav’s exit deal is, by any measure, extraordinary. Under the terms filed with the Securities and Exchange Commission, he is set to receive $34.2 million in cash severance, $517.2 million in equity in the combined company, and $44,195 in continued health coverage — a total of at least $550 million. On top of that, Warner Bros. Discovery has agreed to reimburse Zaslav up to $335 million for taxes assessed by the Internal Revenue Service on his accelerated stock vesting, though the company says that figure will decline depending on when the deal closes. As of March 11, Zaslav also held $115.85 million in vested WBD stock awards — and last month sold a further $114 million worth of WBD shares.
Shareholder advisory firm ISS recommended voting against the compensation measure, citing “problematic” tax reimbursements to Zaslav and the full vesting of his stock awards.
Zaslav will be bound by a two-year non-competition covenant and a two-year non-solicitation of customers and employees after the deal closes.
His lieutenants are not walking away empty-handed either. J.B. Perrette, chief executive and president of global streaming and games, is in line for $142 million, comprising $18.2 million in cash severance and $123.9 million in equity. Bruce Campbell, chief revenue and strategy officer, will receive an estimated $121.5 million, including $18.8 million in severance and $102.7 million in equity. Chief financial officer Gunnar Wiedenfels is set for $120 million, made up of $6.6 million in cash severance and $113.1 million in equity. Gerhard Zeiler, president of international, will get $82.6 million, including $11.9 million in severance and $70.7 million in equity.
The deal itself, clinched in February after Netflix declined to raise its bid for Warner Bros., still needs regulatory clearance from the Justice Department and European authorities. Several state attorneys general are also weighing legal action to block it.
Senator Elizabeth Warren, Democrat of Massachusetts, was unsparing. “The Paramount-Warner Bros. merger isn’t a done deal,” she said after the shareholder vote. “State attorneys general across the country are stepping up to stop this antitrust disaster. We need to keep up this fight.”
If it does go through, the combined entity would be a formidable beast, bringing together Paramount Skydance’s stable — CBS, CBS News, Paramount Pictures, Paramount+, BET, MTV and Nickelodeon — with WBD’s portfolio of HBO, Max, Warner Bros. film and TV studios, DC, CNN, TBS, TNT, HGTV and Discovery+. Paramount has said it expects $6 billion in cost savings from the merger, which is Wall Street shorthand for mass layoffs on a significant scale.
The ten-minute meeting was presided over by chairman Samuel Di Piazza Jr., with Zaslav, Campbell, Wiedenfels and chief communications officer Robert Gibbs in virtual attendance. Di Piazza was bullish. “We appreciate the support and confidence our stockholders have placed in us to unlock the full value of our world-class entertainment portfolio,” he said. “With Paramount, we look forward to creating an exceptional combined company that will expand consumer choice and benefit the global creative talent community.”
Zaslav echoed the sentiment. “Over the past four years, our teams have transformed Warner Bros. Discovery and returned the company to industry leadership,” he said. “Today’s stockholder approval is another key milestone toward completing this historic transaction that will deliver exceptional value to our stockholders.”
Paramount Skydance struck a similar note. “Shareholder approval marks another important milestone towards completing our acquisition of Warner Bros. Discovery,” it said in a statement, adding that it looked forward to “closing the transaction in the coming months.”
The shareholders have spoken on the merger. On the pay, they were ignored before the vote was even counted.
