English Entertainment
Q1-16: Turner, HBO push Time Warner revenues up 2.5 percent
BENGALURU: Time Warner Inc., (Time Warner) reported 2.5 percent growth in revenues for the quarter ended 31 March 2016 (current quarter, Q1-16) at $7,308 million as compared to the $7,127 million in Q1-15. Revenues increased due to growth at Turner and Home Box Office, partially offset by a decline at Warner Bros.
Total Operating Income increased 11.8 percent year-on-year in the current quarter to $1,996 million as compared to $1,786 million in the corresponding quarter of the previous year.
Time Warner chairman and chief executive officer Jeff Bewkes said, ““We’re off to a terrific start to 2016, as we benefit from the investments we’ve been making in great content and new capabilities in order to take advantage of the growing demand for high-quality video content around the world. Revenues increased 3 percent and Adjusted Operating Income grew 11 percent to a quarterly record of $2 billion due to strong growth across all our operating divisions. In the past several weeks, we’ve seen Warner Bros. release its latest global hit in Batman v Superman: Dawn of Justice, setting the stage for what we expect to be a big year in film, with upcoming releases including Suicide Squad and Fantastic Beasts and Where to Find Them. In television, Warner Bros. continued to show its strength with three of the top five new shows on broadcast television this season among adults 18-49 and a record 21 renewals ahead of the upfront this year.”
Bewkes continued, “Turner aired cable’s first ever NCAA Men’s Division I Basketball Championship game, and Turner and CBS entered into an agreement with the NCAA to extend their television, digital and marketing rights to the NCAA tournament through 2032. TBS ended the quarter as the #1 ad-supported cable network in primetime among adults 18-49 and its repositioning as cable’s premier network for young, fresh comedy is underway with the introduction of new programming including Angie Tribeca, Full Frontal with Samantha Bee and The Detour, the biggest new comedy on cable this year. With its must-watch coverage of the US presidential campaign, CNN continued to build on its success by more than doubling its primetime audience in the quarter. Meanwhile, HBO continued to make strides both inside and outside the traditional TV ecosystem, including expanding its OTT reach to new platforms and new international territories. And, more recently, HBO’s epic series Game of Thrones returned to record premiere night viewership. Further demonstrating our commitment to shareholder returns, we returned close to $1.3 billion to our shareholders through share repurchases and dividends year-to-date.”
Turner
Turner reported 7.2 percent YoY growth in revenues in the current quarter at $2,906 million as compared to $2,710 million. The segment reported 11.8 percent YoY increase in operating to $1,239 million from $1,108 million.
Revenues increased due to increases of 11 percent ($143 million) in subscription revenues and 5 percent ($56 million) in advertising revenues. Turner says subscription revenues increased due to higher domestic rates and local currency growth at Turner’s international networks, partially offset by the impact of foreign exchange rates and lower domestic subscribers. Advertising revenues benefited from domestic growth, primarily due to Turner’s news business, and local currency growth at Turner’s international networks, partially offset by the impact of foreign exchange rates.
Home Box Office
HBO reported YoY increase in revenues to $1,506 million in Q1-16 from $1,398 million in Q1-15. HBO operating income increased 4.1 percent to $477 million in the current quarter from $458 million in the corresponding year ago quarter.
Revenues increased due to increases of 5 percent ($57 million) in subscription revenues and 23 percent ($51 million) in content and other revenues. Subscription revenues grew primarily due to higher domestic rates and subscribers. The increase in content and other revenues primarily reflected higher international licensing revenues, partially offset by lower home entertainment revenues.
Warner Bros,
Warner Bros. reported 2.8 percent YoY decline in revenues Q1-16 to $3,109 million from $3,199 million in Q1-15. Despite drop in revenue, Operating Income from the segment increased 30.9 percent in Q1-16 to $424 million from $324 million in the corresponding year ago quarter.
Revenues decreased mainly due to lower theatrical revenues, partially offset by higher television and videogames revenues. Theatrical revenues declined as the prior year quarter included revenues from American Sniper and The Hobbit: The Battle of the Five Armies compared to the release of Batman v Superman: Dawn of Justice late in the current year quarter. Television revenues increased primarily due to higher international licensing revenues and higher initial telecast revenues. The increase in videogames was mainly due to Warner Bros. LEGO and Mortal Kombat franchises.
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.
