Paramount drives revenue increase
Viacom CEO Philippe Dauman on Thursday talked up a “Transformers” sequel and dismissed rumored tension between DreamWorks and Paramount execs, as the conglom reported earnings that showed the studio gaining a bigger role in Viacom’s financial performance.
Thanks to the domestic B.O. muscle of pics such as “Blades of Glory” ($118 million) and “Disturbia” ($80 million), the conglom’s revenue rose 13% to $3.2 billion for the quarter ended June 30; Par saw its revenue jump 20% to $1.3 billion.
Company also cashed in on “Shrek the Third,” which earned a whopping $320 million domestically, but Par collects only a distribution fee on the DreamWorks Animation pic and not the full receipts.
Studio in the second quarter made up 41% of conglom’s overall revenue, up from 39% last year.
Paramount also saw a healthy increase in operating income. Division had barely eked out a profit of $5 million last year in the comparable quarter but saw profit of $21.4 million this time around.
Profit figure is the third best in the nine quarters since Brad Grey took over the top spot. Studio posted a loss of $106 million in the first quarter.
Overall, profit at Viacom was flat at $434 million.
The performance of “Transformers,” released in the third quarter, wasn’t reflected in the earnings. But Dauman told analysts in a conference call Thursday that the toy-driven pic was central to Par’s long-term plans.
“Discussions about a sequel are well under way, which will turn ‘Transformers’ into a true franchise property,” he said.
Dauman also downplayed talk of a rift between DreamWorks and Par. “We’re very pleased with the relationship we have with DreamWorks, and we try not to pay much attention to what people in the press, particularly on the West Coast, like to have fun with,” he said.
Dauman said DreamWorks was an “important bridge for us” as Grey built up the studio slate.
Reports have surfaced that Steven Spielberg could ankle at the end of his three-year pact amid possible tension between Paramount and its new sister unit.
While analysts asked about general turmoil and didn’t single out Spielberg, Dauman went out of his way several times to say he was happy to have the helmer directing the new “Indiana Jones” pic.
Dauman gave the public seal-of-approval to Grey, saying he was “very pleased with the path Brad Grey has set for us over the next several years.”
Homevid and theatrical units at Par both showed demonstrable gains: Home entertainment revenue was up 35% to $545 million and theatrical was up 34% to $437 million.
Cable division saw revenue jump 10% to $1.9 billion and profit increase 3% to $732 million.
Dauman acknowledged that the company was “working hard to address the soft spots at some of our networks,” particularly with new shows on MTV such as big-bet “Life of Ryan,” a docu series about a pro skateboarder.
Dauman also acknowledged Par has become increasingly reliant on foreign B.O. but explained it as a function of the types of movies the studio releases.
“Title mix affects international revenues,” he said. “When you have big franchise pictures like ‘Transformers’ or ‘Shrek the Third,’ those perform very well internationally.”