MGM Reports $47.8M ‘Ben-Hur’ Write-Down
MGM reported fiscal Q3 earnings that included a write-down of $47.8 million on its summer tentpole Ben-Hur, which underwhelmed at the box office with an $11M opening weekend in August on its way to a worldwide gross of $94.1 million. Paramount distributed the remake of the iconic original pic that starred Jack Huston and was directed by Timur Bekmambetov.
MGM said today that adjusted earnings for the three months ended September 30, 2016 was $53.1 million, down $20M from the year-ago period, due to the write-down, or “impairment charge.” Without it, adjusted EBITDA would have increased by $27.5 million, or 38%, year-over-year.
Overall, the studio reported that its quarterly revenue grew to $298.7M, up from $212.1M a year ago, and net income fell to $12.4M, from the year-ago $124M. Operating cash flow is $139M for the quarter and $487M for the year.
“Our third quarter results were negativity impacted by a significant impairment charge resulting from the substantial underperformance of Ben-Hur,” MGM CEO Gary Barber told analysts during the quarterly earnings call today.
Ben-Hur was the third big-budget faith-based movie from a major studio to fall from box office grace in the wake of Noah ($101.2M domestic B.O., $125M production cost) and Exodus: Gods And Kings ($65M domestic B.O., $140M cost). Its budget was a reported $100M.
MGM did better with its remake of Magnificent Seven, starring Denzel Washington and Chris Pratt, which Sony released in late September and has grossed $159.7M globally. It is MGM’s last planned theatrical release for the 2016 calendar year, which included its YA hit Me Before You which collected more than $200M at the worldwide box office.
Home entertainment’s contribution was lower this year.
“While the sizable charge for Ben-Hur is disappointing, we are very encouraged by our broad-based performance of our business as a whole and we still expect to achieve considerable adjusted EBITDA for 2016 of approximately $390 million,” Barber added, pointing to other strong film franchises and strong television business.
Revenue from television grew more than 100% to $96M. The division’s contribution doubled from last year at the same time when all the company had was Fargo being delivered to FX. “Our television content business continues to show tremendous growth,” Barber said.
MGM currently has five original series on the scripted side — Get Shorty, A Handsmaid’s Tale, Fargo, Vikings and the sixth and final season of Teen Wolf. It also has Condor readying, along with Survivor, Shark Tank, Celebrity Apprentice (debuting with Arnold Schwarzenegger on NBC in January 2) and The Voice. A commitment for cycle 13 on The Voice has already been made.
On the call, execs said Epix — co-owned with Parmount and CBS — continues to perform well, but they are incurring upfront marketing expenses for new original series Berlin Station and Graves. Asked about the premium network’s future, Barber said on the call that they are very happy with it performance and have a contract through 2020 — and Get Shorty is going through Epix.
He said that he can’t comment but they are in contact with their partners and “evaluating opportunities going forward.”
MGM’s upcoming slate of films include Death Wish, Tomb Raider, Creed 2, 23 Jump Street as well as the 25th installment of the James Bond franchise.
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