Really interesting things are always in the fine print, especially when it comes to the finances of the Academy of Motion Picture Arts and Sciences.
When the latest numbers appeared in a Christmas Eve bond disclosure statement, it was easy to pass the footnotes. But note 1 on page 6, ultimately, contains an intriguing clue to the Oscar’s fragile economy, which historically accounted for around 80% of the Academy’s revenue (most of the rest from investments, plus a fundraising campaign for the Academy Museum).
Note 1 tells us that during the fiscal year ended June 30, 2020, long-term contractual guarantees for the Oscars show – primarily the ABC domestic television contract and a Buena Vista contract for international distribution – have accounted for 95% of some $ 131.9 million in Oscar-related revenue for the year, or roughly $ 125.3 million. The remaining $ 6 million will come from any expectations, like ticket sales, red carpet access fees, shipping fees, and anything that can make money out of the ceremony.
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But in the fiscal year ended June 30, 2019, long-term contractual guarantees contributed 97% of approximately $ 131.1 million of rewards revenue, or roughly $ 127.2 million. Again, the balance will come from ticket sales and the like.
So while Oscar revenue increased slightly last year, revenue from warranties – global television, and perhaps around $ 2.65 million from a licensing deal with hotel owners and d ‘a shopping center attached to the Dolby Theater – actually fell about 1.5%. This corresponds to a 1.5% drop in worldwide television revenue, to $ 122.1 million in 2019 from $ 123.9 million in 2018, as reported in an earlier bond filing.
As the odds drop, air slowly escapes from the financial bag. In 2019, the decline came mainly from a drop in domestic TV payments, which fell about 2% to $ 109.2 million from $ 107.1 million the year before. International revenues, which totaled only around $ 15 million in 2019, have not grown fast enough to offset the domestic decline, and it looks like last year’s situation, even with the Korean language Parasite win – remained roughly the same.
This does not portend a collapse. The Academy, through fundraising and bond sales, has a large investment portfolio valued at $ 635.3 million as of June 30, date of the last report.
But that means the next show, delayed by the pandemic until April 25, is playing out of weakness. With only 23.6 million viewers, a record high, the last show did not serve much as a basis for the next. Considering the late date, a crop of relatively small, indie or streaming-oriented contenders will need to maintain interest for a full two months after the Golden Globes dealt with most of them on February 28. The television folks, whose contribution has declined or mostly static over each of the past two years, will need to determine what could claim this year more. All of this, and some of these financial fixes – selling tickets or licensing Dolby hotels / retail – could be in trouble if the virus, as it seems likely, persists.
As usual, everything is in the fine print.