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Paramount Q4 Profit Drops 27%

13 Nov, 2014 By: Erik Gruenwedel

Home entertainment revenue declines 38% due to two fewer major releases

Paramount Pictures Nov. 13 reported a 27% ($78 million) decline in fourth-quarter (ended Sept. 30) operating income to $213 million, due in part to the lack of a residual revenue from a theatrical distribution agreement for Marvel Studios content, which existed during the prior-year period.

Revenue increased 12% to $1.36 billion due to strong theatrical performances and carryover from Transformers: Age of Extinction. Paramount Home Media Distribution revenue fell 38% due to two fewer releases compared with the year-over-year period.

Specifically, home entertainment revenue in the quarter included Noah and Age of Extinction, compared to G.I. Joe: Retaliation, Pain & Gain, Star Trek Into Darkness and World War Z in the prior-year period.

Separately, when Paramount inked a distribution agreement with Marvel Studios in 2010, it mandated a percentage of revenue from Marvel’s The Avengers and Iron Man 3.

When The Walt Disney Co. acquired Marvel for $4 billion in 2012, it bought out Paramount’s theatrical distribution deal. Paramount, as compensation, received a percentage of the films' box office through Iron Man 3. Paramount received no incremental revenue from Thor: The Dark World, Captain America: The Winter Soldier or Guardians of the Galaxy.


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