The Walt Disney Company made it an even dozen quarters in a row that its quarterly earnings beat Wall Street estimates. CEO Bob Iger reported that second quarter profit rose $1.13 billion for 58 cents a share, or 22%, based on its better than expected National Treasure sequel and theme park performance which wasn't hurt much by the recession. Also helping at the studio entertainment division were Enchanted DVD sales and the Hannah Montana/Miley Cyrus: Best of Both Worlds concert tour 3-D film that set a record for ticket sales per screen when it opened February 1st. Iger reported that, despite the writers strike, broadcast profit rose. Disney stock has been up 3+% this year
And analysts expect News Corp (Fox, FBN, 20th Century Fox, Fox Searchlight, etc) to report a higher fiscal third quarter profit tomorrow afternoon on improved revenues from the broadcast and cable television networks and a gain on the sale of DirecTV Group Inc to John Malone's Liberty Media. In other words, the company will be barely affected by the writers strike. News Corp even raised its forecast for 2008 operating profit in February...
Given this, it's awfully hard for these Big Media behemoths to continue to plead poverty during guild negotiations, like the ongoing talks with the big actors union SAG and the upcoming bargaining with the smaller actors union AFTRA. True, network TV viewership is down at the networks, and advertising was lost. But since these huge parent companies don't break out their studios and networks in financial reporting, it's hard to know exactly what's being covered up.
Last Friday, Viacom Inc's CEO Philippe Dauman said its first-quarter profit climbed 33% to $270 million, or 42 cents a share, on sales of the video game Rock Band and higher ratings at cable channels like MTV and Nickelodeon, while box office receipts for Cloverfield and The Spiderwick Chronicles helped narrow losses at the film unit. That company, too, weathered both the recession and the writers strike, the latter because most of its TV shows are unscripted reality programs and animation. Even so, the stock has dropped 13% this year.
Time Warner's stock also has fallen this year and its CEO Jeff Bewkes acknowledged that, even though first quarter net income fell 36%, or 21 cents a share, its content business in film and television was alive and well. What isn't is its cable systems unit which is why he wants to break up the world's biggest media company by focusing on the company's entertainment industries and shed its 84% stake in Time Warner Cable.
And despite bad news at General Electric, NBC Universal shined although not so brightly as it should have. Worse, the parent company didn't warn investors in advance of reporting earnings in mid-April that profit overall dropped 12%, or 44 cents a share. Still, NBC Universal profit growth of 3% looked good by comparison.
What does their posting a profit have to do with the writers strike? Or the recession? I’m no fan of conglomerated media either, but this is a bit of a stretch. Would you rather they not profit and slash more jobs?
Comment by Mr. Relevance — May 6, 2008 @ 2:22 pm
Woo-hoo! Way to go, Patric and David! Hell of a contract you got us!
Comment by Writer Bob — May 6, 2008 @ 2:49 pm
nets are feeling the fallout from the strike - low ratings, diminished viewership post-strike
nikki, why don’t you post on this? that’s a big story.
even without the strike, how do the nets expects viewers to stay loyal to a show with the hodge podge scheduling - viewers never know when a new episode or a rerun is on, and after they watch a new episode or two, the next batch of episodes are repeats jammed in as filler so what’s the point?
Comment by strike damage — May 6, 2008 @ 3:08 pm
This can’t correct. All the posters on this site were arguing with me during the writers’ strike telling me that the strike was causing these companies serious financial hardships! These companies must be lying about profits, they were hurt by the strike and just don’t want to admit it.
Comment by Intrigued — May 6, 2008 @ 3:13 pm
Am I the only person who sees that the conglomerates WANTED the WGA to strike when it did? They knew that the Writers working on the expired contract and striking simultaneously with SAG in June would mean a collective bargaining platform to which they would have had to make greater concessions. So they shoved the most insulting offer they could possibly keep a straight face with across the table and the WGA took the bait. Now, they’ve got what they wanted - the two guilds did/will strike at different times, thus mitigating their contractual financial expenditures.
Comment by silentuntilnow — May 6, 2008 @ 3:20 pm
No, what this shows is that we don’t need the writers to provide broadcasting materials.
Too bad: your worthless strike was a waste that hurt no one except your “union” buddies BTL.
I’d advise all English lit majors at UCB, Stnford and Columbia to get out quickly, your “skills” will be meaningless.
Comment by Yaka Hey — May 6, 2008 @ 3:27 pm
Wait a second here. The strike ended like two months ago and you are somehow attempting to draw a comparison to 12 quarters of revenue?
Any impact from the strike would not be seen for quite some time. Well, I mean on the studios. The devastation that Patric inflicted on the writers, below-the-line people, and others, will last a lifetime.
ALSO, I am not sure how you equate the strike the revenues at any rate. The writer’s strike certainly benefited the studios by precluding them from pouring money to acquire scripts which will never get made. That certainly helps the bottom line (again, helps the bottom line of the studios - the writers got the raw end of the deal, thanks to Verrone).
The blog has gone from fair and balanced (claimed before the WGA strike) to “pro-WGA” (claimed during the strike to ‘even out the media coverage’) to “blindly anti-employer no matter how specious the reasoning”.
Comment by IDontGetIt — May 6, 2008 @ 3:34 pm
Beg to differ, Yaka Hey. Story is a part of the human cognitive presence, as old as the first prehistoric steps and communicative grunts. It’s at the very core of human perception. It’s how we remember our lives and how we understand the world. There will always be a need for writers, no matter how much you want to get rid of us.
Comment by silentuntilnow — May 6, 2008 @ 3:52 pm
The true effect of the strike on the studios bottom line won’t be felt for 3 fiscal quarters. I said it before during the strike and I’m saying it again now….2 more to go.
Comment by reelbusy — May 6, 2008 @ 3:56 pm
i’m all for writers/directors/talent getting paid appropriately, but i don’t think its fair to criticize the big congloms for crying poverty when most of their film divisions as you concede are doing poorly.
Comment by andrew — May 6, 2008 @ 4:19 pm
@Comment by IDontGetIt — May 6, 2008 @ 3:34 pm
@Comment by andrew — May 6, 2008 @ 4:19 pm
totally agree.
back OT: these numbers probably weren’t even influenced by the strike yet. Even if they are, so what? $1.12 billion dollars of profit on $44 billion spent isn’t all that great, which is to say nothing of $277 million on $30 billion spent. Are they supposed to break exactly even? Would you like to have a job where you are able to exactly pay for your bills month to month and nothing else? Everyone likes to make some profit. Stop being ridiculous. If you don’t understand business why comment on it?
I will say once again, if these profit margins are so great and ‘proof’ that writers or anyone else is getting screwed, demand to stop getting PAID upfront before a project has made a dime like you do now and demand your compensation be virtually all in stocks. I mean, if they are making so much money and you own stocks, you are a co-owner right? You’ll reap their rich rewards. Willing to risk it?
Comment by manny — May 7, 2008 @ 3:41 pm
I think this just further goes to show how pitiful the writing talents of today’s television industry truly are. Does anyone here actually still watch network tv? No one I know does.
Let them all eat cake, or in this case - their trite, cliched scripts.
Comment by worly — May 10, 2008 @ 6:56 pm