Studio Profit Report: Fox's Final Rise, NBCUniversal Falls

Disney's 'Avengers: Infinity War,' WarnerMedia's 'Young Sheldon,' Fox's 'Bohemian Rhapsody,' Universal's 'Jurassic World: Fallen Kingdom,' Sony's 'Venom,' Viacom's 'Jack Ryan'

Paramount is back in the black, while Disney exceeds $7 billion at the box office and Comcast’s entertainment unit saw profits nearly halved after a record 2017.

This likely will be the last year that The Hollywood Reporter’s annual studio report card will include the film and TV production units of six conglomerates, as Disney and most of Fox should merge by June after the $71.3 billion deal. 

In 2018, Viacom’s Paramount reversed a $230 million loss and every studio except for NBCUniversal’s grew its profit year-over-year. Below is a closer look at each studio: 

DISNEY: Disney exceeded $7 billion at the global box office for the second time ever, and its studio leads in profitability for the fifth year straight, courtesy of Avengers: Infinity War and Black Panther from Marvel and Incredibles 2 from Pixar. The latter two titles helped Disney’s TV and SVOD distribution efforts, but DVD and Blu-ray sales of Coco and Cars 3 in 2018 didn’t match those of Moana and Finding Dory in 2017, so home entertainment revenue dipped 5 percent year-over-year. Also dragging down results were less-than-stellar box office for A Wrinkle in TimeThe Nutcracker and the Four Realms and even Lucasfilm’s Solo: A Star Wars Story. During a conference call Feb. 5, Disney CEO Bob Iger noted that had Disney’s studio already been merged with Fox’s, the combined entity would have notched 37 Oscar nominations. “It’s an indication of the creative potential of the combined companies,” he said.

WARNER BROS: Warner Bros. reported record annual operating income in 2018 despite higher production spending but, as in 2017, it finishes behind Disney in THR’s profitability ranking — despite a healthy contribution from TV production on the backs of The Big Bang Theory and Young Sheldon. The theatrical business was key, with Aquaman becoming the first DC superhero film to cross $1 billion globally since The Dark Knight Rises in 2012. While revenue derived from TV production grew 4 percent in 2018, sales of theatrical product surged 29 percent, helped by A Star Is Born and Crazy Rich Asians domestically and Fantastic Beasts: The Crimes of Grindelwald across the globe. While there was much good news, some movies, such as Rampage and Tomb Raider, were considered underachievers for AT&T, which closed its Time Warner acquisition in July.

20TH CENTURY FOX: The return of Ryan Reynolds’ Deadpool to the silver screen and the popularity of Bohemian Rhapsody boosted Fox’s studio profit back into the $1 billion club in calendar year 2018. The Fox studio growth came despite further investment in the launch of the Marvel Strike Force mobile game at FoxNext and mixed results at its TV production arm that includes shows like EmpireThis Is Us and Modern Family. Profitability benefited from lower theatrical releasing costs, but despite the strong worldwide home entertainment and pay television performance of The Greatest Showman, SVOD suffered a bit by comparison because of the success of The People v. O.J. Simpson: American Crime Story in 2017. Once Fox’s megadeal with Disney closes, not only will the latter be able to manage film franchises from both studios, but it also will become the largest TV production outfit in Hollywood.

NBCUNIVERSAL: The studio run by Comcast’s entertainment unit saw profits decline after a record 2017. The bottom line was nearly halved in 2018 as management continued its focus on a mix of franchises, led last year by Jurassic World: Fallen Kingdom, which grossed more than $1.3 billion, and niche fare. But successes like Fallen KingdomDr. Seuss’ The Grinch, which became the highest-grossing Christmas-themed movie ever, Halloween and Mamma Mia! Here We Go Again couldn’t match the huge 2017 boon of The Fate of the FuriousDespicable Me 3 and the low-budget Get Out. Plus there were some weaker-than-hoped 2018 titles like Fifty Shades FreedWelcome to Marwen and Mortal Engines, which made $82 million worldwide on a budget of more than $100 million and tens of millions more in global marketing costs. In addition to a lower box office, home entertainment dropped 19 percent, with consumer product sales and content licensing also falling, with the latter owed to a quirk in timing. Plus operating expenses rose 1.6 percent, driven by higher advertising, marketing and promotion expenses, “primarily due to a higher number of releases.” For 2019, the studio’s slate should ensure profit improvement thanks to more animated films – Illumination’s The Secret Life of Pets 2, How to Train Your Dragon: The Hidden World, the first big DreamWorks Animation film under the company’s watch, and Abominable, along with Fast & Furious Presents: Hobbs & Shaw and several Blumhouse releases. 

SONY: Despite Sony’s flat revenue at its studio, profit surged as a result of “financial discipline under the leadership of Tom Rothman,” as Sony CEO Hiroki Totoki put it during a 2018 earnings call. A further testament to the power of cost-cutting is that revenue at the TV production arm, an increasingly central part of the studio’s output in the age of Peak TV, fell even while it produced hits like The Crown and Better Call Saul. Media networks, also included in Sony’s film unit, reported lower advertising revenue as TV sports network Sony Ten in India was hurt by losing Indian Premier League cricket rights to Star India. The studio arm also exited 10 channels, bringing the number to 90 at the end of 2018. Sony’s hits included VenomSpider-Man: Into the Spider-VerseHotel Transylvania 3: Summer Vacation and the mid-budget Peter Rabbit, while misses included Holmes & Watson.

VIACOM: In its fiscal year ending in September, the conglomerate’s Paramount Pictures reported an adjusted operating loss, but THR’s calculations show the studio returning to the slightest of profits during the calendar year, on the heels of two straight years of losses. Low-budget hits A Quiet Place and Book Club were a factor, along with Mission: Impossible — Fallout’s franchise-record performance and Bumblebee reinvigorating the Transformers franchise. Also boosting results was growth at Paramount Television, where hits include Amazon series Jack Ryan, Netflix’s Maniac, and The Haunting of Hill House and The Alienist for TBS. Paramount TV revenue jumped 127 percent to more than $400 million in its fiscal year. And good news for long-suffering investors (Viacom’s shares are down 65 percent over five years): Management is forecasting a profit at the studio for the current fiscal year.

This story first appeared in the Feb. 20 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.