By Erik Gruenwedel | Posted: 15 Jan 2009
There appears to be light at the end of the recessionary tunnel for News Corp.’s filmed-entertainment division, which includes 20th Century Fox Home Entertainment, according to one analyst.
Spurred by favorable theatrical (and likely Blu-ray and catalog DVD) releases through the end of fiscal 2009 (ending June 30), Pali Capital analyst Rich Greenfield said 20th Century Fox Studios would realize $823 million in operating income, up $58 million from a previous estimate.
The projection, nonetheless, represents a 33.9% decline from fiscal 2008. Studio revenue will top $5.7 billion, down 13.4% from the previous year.
Greenfield forecasts a 40% surge in filmed-entertainment operating income to $1.15 billion in fiscal 2010, with revenue surging 9.7% to $6.3 billion.
The analyst said the positive slate, which includes Marley & Me, Bride Wars, The Day the Earth Stood Still, Australia and upcoming theatrical releases Taken (Jan. 30), Street Fighter (Feb. 27), All About Steve (March 6), X-Men Origins: Wolverine (May 1) and Night at the Museum: Battle of the Smithsonian (May 22), contributed to the revised projection.
Fox’s fiscal-2008 comparable releases featured The Simpsons Movie, Aliens vs. Predator: Requiem, Juno, Alvin and the Chipmunks and Hitman.
“We believe non-TV/newspaper operating income would have increased in fiscal 2009, if not for the timing of film releases and the pressure from foreign currency changes,” Greenfield wrote in research note.
Not mentioned was the probable multimillion dollar settlement Fox reportedly is ironing out with Warner Bros., regarding the latter’s tentpole release of Watchmen March 6.
Warner optioned the $130 million super hero film from director Zack Snyder (300) — based on the 1980s comic book limited series — apparently unaware Fox controlled the rights.
The studio and Synder have several related Watchmen DVDs in the works as well.
Finally, Greenfield said it was imperative News Corp. re-upped President and COO Peter Chernin, whose contract expires in June. Chernin has been key in driving Fox’s digital initiatives, including the purchase of MySpace and launch of Hulu.com, and is a longtime supporter of packaged media.
“Given the unprecedented market uncertainties that exist, we would like Chernin’s skill, knowledge and credibility to remain with News Corp.,” Greenfield wrote.