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MGM Reports Better Than Expected 2016 Profit Despite ‘Ben-Hur’ Bomb

Growth in the studio’s TV business made up for a weaker film slate

Triple-digit growth in the TV business pushed Metro-Goldwyn-Mayer parent MGM Holdings past its September guidance, as the studio on Wednesday reported $1.2 billion in full-year 2016 revenue and $401 million in adjusted EBITDA, a profit measure that backs out non-operational expenses like interest and taxes.

That second number was 3 percent higher than the guidance the company gave last fall, which was primarily due to the $134 million in adjusted EBITDA — before overhead — generated by MGM’s TV business. And that’s a 125 percent increase over 2015.

However, because of a weak film slate without a James Bond movie and last August’s box office disaster with “Ben-Hur,” the company’s revenue was down 24 percent from 2015.

MGM tapped reality TV pioneer Mark Burnett as president of its television division in December 2015, and that move has paid dividends, as TV revenue surged 48 percent year-over-year.

“MGM delivered another year of strong financial results,” MGM Chairman and Chief Executive Officer Gary Barber said in a statement. “Our overall performance was bolstered by the tremendous growth we achieved in our television business, which more than doubled in 2016.  The increasing diversification of our premium content, combined with our extensive library and sound financial stewardship, puts us in a very favorable position to continue to deliver reliable financial performance and execute on our strategic growth initiatives.”

On the film side, MGM was hurt by the lack of a 2016 movie from its signature franchise, James Bond. 2015’s “Spectre” grossed $881 million worldwide. And “Ben-Hur” was primarily responsible for the $61 million in film impairment charges the studio took, the prime culprit behind a $30 million — or 7 percent– dip the company’s adjusted EBITDA took from 2015.

MGM’s TV strength was bolstered by hits like “Vikings,” “Shark Tank,” “The Voice” and “Fargo.” The company also recently inked a deal with viral video king Jukin Media to develop unscripted original series, mainly competition reality shows.