D&D Movie/TV D&D Movie Hit or Flop?

[Zardnaar]

We do know that D&D HAT is doing extremely well in streaming. It is still cracking the top 10 streaming movies, even months after release. We also know the film industry is willing to fight tooth and nail to prevent showing streaming revenue. They are willing to shut down the entire film industry to not have to show people. Do you think that they would be willing to loose billions, potentially 10s or 100s of billions, if the streaming revenue wasn't worth much more than that?

Another reason I mentioned was investor's. Probably a similar reason WotC has been coy about D&D exact numbers.

Let imaginations and hype fill in the blanks. D&Ds doing really well look at Amazon. "It must have sold ten million books, had 40 million players that must be 50-60 million by now".

Some investors are saying streaming a bit of a scam.

 

[Jaeger]

We do know that D&D HAT is doing extremely well in streaming. It is still cracking the top 10 streaming movies, even months after release.

But what does that mean in terms of dollar revenue?

Nobody Knows.

It is not a stretch to assume that Hasbro was getting a cut of that "doing extremely well" VoD/Streaming money.

Yet they still took a $25 million dollar write down on the film...

So until we have actual revenue numbers, we have no context for what those rankings mean in terms of actual dollars made.

We also know the film industry is willing to fight tooth and nail to prevent showing streaming revenue. They are willing to shut down the entire film industry to not have to show people. Do you think that they would be willing to loose billions, potentially 10s or 100s of billions, if the streaming revenue wasn't worth much more than that?

Of course they are - it allows them to hide earnings, and shift them around anyway that they want. To choose who gets the big payouts, and who they want to screw over.

"Honest accounting in Hollywood." Is a well known oxymoron.

IMO: They are more than willing to loose billions now in order to avoid being held to some kind of accountability for their financial shenanigans in the future.

But I am very cynical on the subject.

 

[bedir than]

I flew Alaska Airlines over the weekend. Their number three movie option was D&D: Honor Among Thieves. The rest of the top ten were a list of the major hits that are available on paid streaming at this time.

 

[Mistwell]

nevermind.

 

[Myrdin Potter]

At this point there is not much more I can see that can be added to this topic. It seems very straitforward to me. Box office receipts and estimated streaming revenue resulted in a $25M write-off for Hasbro. There is no question that the company with the most information and a brand new CFO (ex-Harley Davidson) decided that the movie lost money for them.

In my opinion, for a company the size and scale of Hasbro, and for a brand they wanted to try and push to the next level, that is not a catastropic result. Worse actually for Paramount as Hasbro benefits from additonal brand awareness and the movie reviewed well and seems to have some streaming legs to continue the advertsiment whereas the traditional revenue stream is not good enough for a pujre movie/TV show company.

Compared to the bloodbath on eOne, it actually is a rounding error.

 

[mamba]

Compared to the bloodbath on eOne, it actually is a rounding error.

there is no eOne bloodbath, but it is hard for us to account how much what they kept should be valued at

 

[Myrdin Potter]

there is no eOne bloodbath, but it is hard for us to account how much what they kept should be valued at

Their most recent 10-Q

"Impairment of Film and TV Reporting Unit
During the second quarter of 2023, the Company determined that a triggering event occurred following a downward revision of the Company's financial forecast for its Film and TV business, driven by challenging industry conditions that include the ongoing strike by the Writers Guild of America. As a result, the Company performed a quantitative impairment test and determined that the Film and TV reporting unit within the Company's Entertainment segment, was impaired. During the second quarter of 2023, the Company recorded pre-tax non-cash impairment charges of $296.2 million as the carrying value of the Film and TV reporting unit exceeded its expected fair value, as determined using a discounted cash flow model which is primarily based on management’s future revenue and cost estimates. These impairment charges consisted of a $231.2 million goodwill impairment charge associated with goodwill assigned to the Company's Film and TV reporting unit, recorded within Impairment of Goodwill and a $65.0 million intangible asset impairment charge related to the Company's definite-lived intangible eOne Trademark, recorded in Selling, Distribution and Administration costs, within the Consolidated Statements of Operations for the quarter and six months ended July 2, 2023."

$300M write-off. Non-cash always ignores that cash was paid in the past (or debt assumed which needs to be paid in cash or stock was issues that could have been sold for cash and results in permanent dilution unless stock is bought back for cash).

From 2022 10-K

"Based on the value of the net assets held by eOne Music, which included goodwill and intangible assets allocated to eOne Music as part of the eOne acquisition, the Company recorded a pre-tax non-cash goodwill impairment charge of $108.8 million within Loss on Disposal of Business on the Consolidated Statements of Operations for the year ended December 26, 2021."

I see about a $400M loss there between the two of them. I think they assigned about $500M value to eOne Music that they later sold for around $400M and they paid about $3.8B of all of eOne in 2019. So $3.3B value of the non-Music eOne and they just sold a big piece of it for $500M. They did retain some major brands (like Peppa Pig) and did not talk about a charge in their recent release, but they did not talk about a charge for the Music sale when it was announced.

They also cut eOne staff and took a severance charge recently.

To this accountant, seems like a bloodbath to me.

 

[Ulorian - Agent of Chaos]

Their most recent 10-Q

For those curious about what a 10-Q is: SEC Form 10-Q: Definition, Deadlines for Filing, and Components

 

[Myrdin Potter]

EDGAR Entity Landing Page

All the quoted reports can be found via the link above.

I was off on the purchase price by about $800M. From 2021 10-K:

"On December 30, 2019, the Company completed its acquisition of eOne, a global independent studio that specializes in the development, acquisition, production, distribution and sales of entertainment content. The aggregate purchase price of $4.6 billion was comprised of $3.8 billion of cash consideration for shares outstanding and $0.8 billion related to the redemption of eOne's outstanding senior secured notes and the payoff of eOne's revolving credit facility. The Company financed the acquisition with proceeds from the following debt and equity financings: (1) the issuance of senior unsecured notes in an aggregate principal amount of $2.4 billion in November 2019, (2) the issuance of 10.6 million shares of common stock at a public offering price of $95.00 per share in November 2019 (resulting in net proceeds of $975.2 million) and (3) $1.0 billion in term loans provided by a term loan agreement, which were borrowed on the date of closing. See note 11 for further discussion of the issuance of the senior unsecured notes and term loan agreement."

They also spent $216M of transaction costs that they expensed as incurred. Also maybe $150M of integration expenses.

So call it $4.1B remaining to be assigned against the $500M sales price. $3.1B in Goodwill.

They did take another $100M impairment hit on Power rangers last year, so make that $500M and counting.

No goodwill impairments yet, so the entire $3.1B amount will need to be reviewed.

 

[mamba]

So $3.3B value of the non-Music eOne and they just sold a big piece of it for $500M. They did retain some major brands (like Peppa Pig)

I thought you were talking about this bit. With the stuff they took out it is hard to say what its value is and whether that means they made a loss or not. At a minimum it would be a much smaller loss than the difference between the two. That is what I was referring to.

Thanks for the 10-Q, had not seen that