‘Ben-Hur’ Leads to $48 Million Write-Down at MGM
“Ben-Hur” was one of the summer’s biggest box office flops and the failure of the religious epic depressed profits at Metro-Goldwyn-Mayer during the third quarter.
The action-drama about a chariot racer cost more than $100 million to produce and brought in $94 million globally. MGM told investors this week that the poor ticket sales resulted in a $48 million impairment charge for the most recent quarter.
The film and television studio’s revenue increased more than 41% to $299 million, while net income fell from $124 million to $12 million. MGM attributed that dramatic decline in net income to a one-time tax benefit it recorded in the prior-year quarter. When adjusted for the benefit that left roughly a $10 million difference in earnings, it wasn’t all bad news at the film division, which scored a hit with “The Magnificent Seven,” a Western remake with Denzel Washington. It will have to wait longer for those profits to show up. Theatrical revenue for the three months ending in September fell 65% to $1.9 million, as most of the film releases won’t show up in the balance sheets until future quarters. Television licensing revenues rose 28% to $143.6 million. Upcoming films include new installments in the “21 Jump Street” and James Bond franchises.
The company’s television business, which includes a stake in the cable channel Epix, as well as such shows as “Vikings” and “Fargo,” were a source of strength, as revenues climbed more than 100% to $95.8 million. The company said it is developing several upcoming shows including a small-screen adaptation of “Get Shorty” and “Condor.”
MGM is not a publicly traded company. However, the company has been disclosing its financial results since emerging from bankruptcy protection in 2010.
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