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Studio Profitability Report: Who's
Up and Who's Down
5:00 AM PDT 3/20/2015 by George Szalai and Paul Bond
'Guardians of the Galaxy'
Disney
'Frozen' fever and Marvel moolah helped deliver $1.7
billion in 2014 as Disney topples Warner Bros.,
Paramount increases box office and Sony stumbles on
'Spider-Man' in THR's annual breakdown of money at
the major studios.
Considering domestic box office dropped 5.2 percent and physical home entertainment
revenue fell 11 percent, the major film studios did surprisingly well in 2014, buoyed by cost
controls, subscription VOD sales to outlets like Netflix and TV production, which is part of
the film segment at some congloms. THR's annual look at studio operating profits for
calendar 2014 reveals box office can be a deceiving indicator of profitability.
WALT DISNEY
Thanks to the global success of Frozen, a 2013 release, Disney was most profitable among
the Big 6 studios in 2014 with $1.7 billion — marking the first year since THR began its
analysis in 2010 that Warner Bros. hasn't claimed the top spot. Thank home video as well as
Guardians of the Galaxy ($774.2 million worldwide), though overall box office dipped 6
percent. With a seventh Star Wars film in December, two Pixar titles due this year and
Marvel movies scheduled through 2019, CEO Robert Iger says the studio will be "a
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significant driver of bottom-line results for the company, certainly through the next five
years."
21ST CENTURY FOX
With $1.5 billion, the studio scored its highest profit total in THR's five years of analysis. It
set a global box-office record for Fox thanks to Dawn of the Planet of the Apes, Gone Girl, X-
Men: Days of Future Past and Rio 2. "Across the board, we had a very diverse slate," said co-
COO James Murdoch in December. He added that the studio wants to continue making
films using a "broader canvas" (like midbudget hit The Fault in Our Stars), as opposed to
exclusively tentpole movies. On the TV side, the syndication of Modern Family, a new
season of 24 and SVOD revenue from the sale of The Americans to Amazon helped temper
the loss of How I Met Your Mother.
WARNER BROS.
Despite the costs of a restructuring and such flops as Transcendence, Blended and Winter's
Tale, Warner Bros. did fine in 2014, generating $1.3 billion in profits. Cost containment, new
TV hits Gotham and The Flash and films including The Lego Movie, Godzilla (the last
release from its Legendary Pictures relationship) and the final Hobbit powered the studio's
first full year under CEO Kevin Tsujihara. On March 4, he said the "three pillars" of WB
will be DC (with films set through 2020), Lego (at least three sequels) and Fantastic Beasts
movies from Harry Potter's J.K. Rowling. But the real growth will come from international
TV, one reason WB paid $273 million for the Netherlands-based Eyeworks.
NBC/UNIVERSAL
The Comcast-owned studio had its most profitable year by its metric of operating cash flow
($711 million), even though filmed-entertainment revenue fell 8 percent. Lower marketing
costs because of a smaller slate helped, as did Neighbors, Ride Along and Lucy. Universal
Pictures chair Donna Langley's 2015 should be huge with Fifty Shades of Grey, Furious 7,
Minions, Jurassic World, Pitch Perfect 2 and Ted 2. Analyst Matthew Harrigan believes
Universal Pictures would be worth $10.5 billion on its own: "Its value should be evinced this
year with a ridiculously loaded summer release schedule."
SONY
The hack related to the release of The Interview dented Sony's 2014 profits by about $15
million and caused the conglomerate to delay its calendar fourth-quarter earnings report,
which was finally released March 16. For the year, the studio's operating income was up 66
percent to $522 million on revenue that rose 2 percent to $8.06 billion. A restructuring saved
$130 million during the company's fiscal year ended March 2014, but a $106 million gain
from the sale of music publishing in 2013 made comparisons tough, and disappointment The
Amazing Spider-Man 2 didn't help (and prompted the ouster of co-chair Amy Pascal as much
as her leaked emails). In TV, Sony is humming with AMC's Better Call Saul, Wheel of
Fortune and Jeopardy.
PARAMOUNT
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The Viacom studio was the only one other than Fox to report an uptick in worldwide box
office, driven by Transformers: Age of Extinction and Teenage Mutant Ninja Turtles. But a
one-time boost in 2013 for selling to Disney home entertainment distribution rights for
Marvel movies made Paramount's $219 million in profits pale in comparison with a year ago.
CEO Brad Grey is seeking to replace ousted film group president Adam Goodman and beef
up his movie slate, and also to make TV production a bigger contributor. He has made
progress, having sold six projects this season.
