I Guess Three Billion Isn’t What it Used to Be


So I put up a graphic in my last piece about the profits from The Hobbit franchise, and my friends, those figures were conservative. On second thought, I should have called this piece Seven Billion Isn’t What It Used to Be.

Pardon me if I’m not sympathetic about Warner Brothers having financial difficulties. Oh, I’m sympathetic toward those who lost their jobs but not toward upper management.

LOS ANGELES — Warner Bros. on Tuesday began layoffs that will ultimately eliminate about 1,000 jobs, or 12.5 percent of the studio’s total staff, as it tries to increase profitability in the face of weak domestic box-office sales and a challenged television business.

Kevin Tsujihara, Warner’s chief executive, speaking at a recent investor conference, said the studio was seeking to cut annual overhead costs by $200 million. Mr. Tsujihara announced the layoffs in a memo to employees on Tuesday.

“We examined every aspect of our businesses to ensure that we are restructuring in a way that would allow us to minimize the impact,” he wrote.

Layoffs at Warner, Hollywood’s largest movie and television studio, come as part of a broader effort to trim costs by its corporate parent, Time Warner, after an unsuccessful takeover attempt last summer by 21st Century Fox. Time Warner’s struggling cable network division, Turner Broadcasting, last month eliminated 1,475 jobs, and HBO recently trimmed about 150.

Cost-cutting at Warner has rattled the entertainment industry. Warner — home to Batman, Harry Potter, “The Big Bang Theory” and “The Ellen DeGeneres Show” — has long been Hollywood’s most stable studio. Warner has ranked No. 1 at the domestic box office in five of the last 10 years. It was second in all but one of the other five years.

the rest here


I didn’t want to get into this, but I will (at least a bit). Time Warner, the parent company of Warner Brothers Entertainment, is streamlining in order to make their stock improve and in turn remain independent.

Bewkes, [CEO of Time Warner] meanwhile, told attendees that Time Warner “will more than double our earnings over the next several years.” The company earned $3.51 per share last year, and Bewkes predicted $8 per share by 2018.

Much of that will come courtesy of HBO, whose CEO, Richard Plepler, was at the investor day to tout the premium cable channel, which he said boasts 136 million global subscribers. Plepler said HBO will launch an online service in the U.S. similar in some ways to Netflix.

“In 2015, we will go beyond the wall and launch a stand-alone over-the-top service with the potential to produce hundreds of millions of dollars of additional revenue,” Plepler said. “And the international possibilities could be just as large, if not larger.”

He also said that while original programming might get the most attention at HBO, 40 percent of its subscribers only watch the theatrical movies on the channel. We’re the Millers attracted 26 million viewers, more than Games of Thrones, which is the most popular original HBO show in history. For these reasons, Plepler said HBO has struck long-term deals with outside film studios, such as Universal and 20th Century Fox, until the next decade and Summit Entertainment until 2017, for example.


And Time Warner needs to be independent long enough to get approval for a merger with Comcast which would create a helluva media empire. Think of the marriage of that infrastructure and content creator. It could be something like being one of the Big Three and more. You think seven kiwi actors and some ringers matter to the powers that be in the face of that?

To be clear, I’m not a friend of Comcast and tend to think this merger would not be a good thing for consumers with regard to cost. Other than that, it’s scary how quickly things have gone since I wrote this. We’re fast approaching the point of first run movies being mostly streamed to the home. I don’t think movie theaters will ever go away entirely, but I do think there will be very few in the future.


  1. How about they not pay television actors $1 MILLION per EPISODE? Seriously, I love “The Big Bang Theory” but why do they have to pay their lead actors $1M per episode????

  2. It’s what the market will bear. If they could get away with paying less, they would. LOL!

  3. “CEO of Time Warner meanwhile, told attendees that Time Warner “will more than double our earnings over the next several years.” The company earned $3.51 per share last year, and Bewkes predicted $8 per share by 2018.”
    From what I understand, the managers of a company (CEOs, CFOs etc.) are paid mainly in shares – this is the prevalent method of payment on Wall St. and in corporations, in this phase of financial oligarchy capitalism. So obviously this rarefied layer of “hard”-working people would like to see the price per share of the company appreciate. (Get them low, sell them high, then retire with the treasure.) They are only serving themselves.

  4. I’m now sick and depressed because you said the words: “Time Warner”. My least favorite company ever.

    Even worse: “parent company of Warner Brothers Entertainment”. Connecting my least favorite company ever with one of my very favorite people ever (uh well….among those that I don’t actually KNOW :) (Pesky details.)

    The final straw: “merger with Comcast”. Even striking at larger principles I hold dear, since I’m unable to understand how this proposed merger can possibly NOT violate anti-trust. (If anyone here does, feel free to ‘splain it to me….)

  5. @LadyGrayce, why single out the paycheques of what is the most popular sitcom on television in any country (42.9 million viewers worldwide) when people like Tom Cruise or Ben Affleck and Angeline Jolie are paid huge amounts of money for movies that flop? At least the television actors earn their money.based on an ongoing record of success (if the ratings drop,the show is cancelled) rather than a presumption of what their name recognition *might* earn.
    Studio executives also earn huge salaries, a fact that is ignored in arguments about the costs of performers’ salaries. *That* is what is being protected here, not anything real. By that I mean, related to what the people who are responsible for the existence of those huge executive salaires want or which might be required by justice or law (the last two obviously not being the same thing). Let’s not forget that both the Tolkien family and Peter Jackson had to sue these executive parasites for shares of the profits which were due to them
    (The Tolkiens’ and Peter’s lawsuits were against New Line, which was a subsidiary of Time Warner, as obviously is Warner Bros. Peter’s suit cited some dubious practices “The suit charges that the company used pre-emptive bidding (meaning a process closed to external parties) rather than open bidding for subsidiary rights to such things as “Lord of the Rings” books, DVD’s and merchandise. Therefore, New Line received far less than market value for these rights, the suit says. Most of those rights went to other companies in the New Line family or under the Time Warner corporate umbrella, like Warner Brothers International, Warner Records and Warner Books. So while the deals would not hurt Time Warner’s bottom line, they would lower the overall gross revenues related to the film, which is the figure Mr. Jackson’s percentage is based on.”)

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