Paramount’s Licensing/Other Q4 Segment Revenue Dropped 32% to $566 Million

Paramount Global Feb. 28 reported “licensing and other” fourth-quarter (ended Dec. 31, 2023) filmed entertainment segment revenue of $566 million, which was down 32% from revenue of $833 million in the previous-year period.

The business unit, which includes Paramount Home Entertainment, said the revenue decrease was primarily due to comparisons with last year’s success of Top Gun: Maverick in the digital home entertainment market, and the licensing of Halloween Ends in 2022, and lower revenue from studio rentals and production services as a result of last summer’s Hollywood labor strikes.

Theatrical revenue dropped 20% to $78 million, from $97 million in the prior-year period. Advertising revenue plummeted 50% to $3 million, from $6 million.

For the fiscal year, filmed-entertainment revenue dropped 14% to $2.12 billion in 2023, from $2.46 billion in the 2022.

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For the fiscal year, the filmed-entertainment business segment continued to drive considerable value across the company, including in theatrical, streaming and licensing. In 2023, Paramount Pictures films generated $2 billion at the global box office and delivered five No. 1 debuts at the North American box office.

Mission: Impossible — Dead Reckoning Part One and Transformers : Rise of the Beasts were the top theatrical and home entertainment releases, with $172.1 million and $157 million at the North American box office, respectively.

Warner Bros. Discovery Files ‘South Park’ Content Licensing Lawsuit Against Paramount

Warner Bros. Discovery Feb. 24 filed a content licensing lawsuit against Paramount Global alleging the media company reneged on its obligation to produce 30 new episodes of the Comedy Central animated series “South Park” as part of a $500 million distribution deal signed in 2019 affording the HBO Max streaming platform exclusive access to the franchise’s entire 300-episode catalog.

The suit, filed in Supreme Court of the state of New York in the County of New York, contends just 14 episodes over the new Seasons 24, 25 and 26 have been produced and delivered to HBO Max as of Feb. 9. In addition, the suit alleges that following Paramount’s separate $900 million Comedy Central renewal deal in 2021 with “South Park” creators Trey Parker and Matt Stone for Seasons 27-30 — 14 special episodes, including so-called “super size” episodes (“South Park: The Streaming Wars Part 1,” and “South Park: The Streaming Wars Part 2”) were exclusively earmarked for the rival Paramount+ streaming service.

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“Paramount, South Park Digital Studios and MTV Entertainment … engaged in an illicit scheme to unfairly and deceptively divert to its nascent streaming platform [Paramount+] ‘South Park’ content belonging exclusively to Warner/HBO,” read the complaint.

With catalog episodes of “Friends,” “The Office” and “The Big Bang Theory,” among others, commanding premium valuation across linear TV and streaming channels, “South Park” is no different. The series, which debuted on Comedy Central in 1997, has earned five Emmy wins against 18 nominations. WBD paid Paramount $1.68 million per “South Park” episode.

WBD believes the new “South Park” episodes are more valuable than catalog shows, and that it overpaid for the distribution deal when factoring in the missing new content. The company is seeking unspecified punitive damages and legal fees.

In a statement, Paramount said the allegations are without merit and that it looks forward to “demonstrating so through the legal process.”

“We also note that Paramount continues to adhere to the parties’ contract by delivering new ‘South Park’ episodes to HBO Max, despite the fact that Warner Bros. Discovery has failed and refused to pay license fees that it owes to Paramount for episodes that have already been delivered, and which HBO Max continues to stream,” Paramount said in the statement.

Paramount’s Q2 ‘Licensing and Other’ Revenue Increased 27%

Paramount Global Aug. 4 reported second-quarter (ended June 30) revenue of $587 million in its “licensing and other” business segment, which was up 27% from revenue of $463 million in the prior-year period.

The business unit, which includes Paramount Home Entertainment, said the revenue increase was primarily driven by the monetization of recent theatrical releases, including the 1986 box office hit Top Gun in foreign markets.

Pre-tax operating income for filmed entertainment increased $129 million in the quarter to $181 million, from $52 million in the previous-year period, reflecting the strong performance of current year movie releases.

Indeed, revenue grew 126% year-over-year to $1.36 billion led by the $630 million revenue surge driven by the releases of Top Gun: Maverick and Sonic the Hedgehog 2 in the quarter.

Maverick has earned more than $1.3 billion to date at the box office globally and continues to draw audiences to theaters. In addition to being the most successful Paramount movie domestically, it is now in the top 10 domestic films of all-time.

Notably, Maverick has not yet been released in retail channels, which portends strong future digital and packaged-media sales for the Tom Cruise sequel.

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Meanwhile, The Lost City and Sonic the Hedgehog 2 debuted No. 1 at the box office and in retail channels, joining Scream, Jackass Forever and Top Gun: Maverick to total five No. 1 films in the first half of the year, with Sonic 2 making history as the biggest video game movie opening of all-time.

“At the heart of that [revenue] growth was our hugely popular content, including the cultural phenomenon and No. 1 movie in the world, Top Gun: Maverick,” CEO Bob Bakish said in a statement. “Our deep and growing library of valuable IP, coupled with the strength of our best-in-class assets, ensures we are well-positioned to continue to maximize value for our shareholders.”