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Cambridge University Press 978-1-107-00309-5 - Entertainment Industry Economics: A Guide for Financial Analysis, Eighth Edition Harold L. Vogel Index More information

Index

A&M Records, 279–280n A. C. Nielson, 159n, 290–291, 312n ABC Accounting Principles Board Opinion 16, affiliate compensation relationships, 315n 225n commercial availability expansion, 317n Actors Equity Association, 256–257 Disneyland and, 509 Adams, J. A., 509 distribution by, 58n The Addams Family, 499–501n history of, 296, 315n ADI (area of dominant influence), 563 holdings, 295 Advance, 564 mergers & acquisitions, 296 Adventures of Pluto Nash, 207t multi-advertiser reach-based business model, Advertising 316n billing, 63n production interests, 107n complementary view of, 53 sports broadcasting by, 465–466n economic, business aspects, 54f, 53–54, 54f, television revenue growth, 224n 55, 63n television series compensation agreements, functionality, 52, 63n 239n history of, 62–63n ABC Pictures, 233n informative view of, 53, 63n Above-the-line costs Internet rates, 62n defined, 563 media industry spending, 51, 52t movie industry production, 125 overview, 51f, 52t, 51–52, 62–63n Accounting for Motion Picture Films (AICPA), persuasive view of, 53 179 Affiliate, 564 627

© in this web service Cambridge University Press www.cambridge.org Cambridge University Press 978-1-107-00309-5 - Entertainment Industry Economics: A Guide for Financial Analysis, Eighth Edition Harold L. Vogel Index More information

628 Index AGB Research, 312n revenues, 510t, 509–510, 512f, 519–520n Aggregate, 564 valuation, 517–518, 520n Aguiar, M., 7–8 Anderson, C., 59–60n Airplane, 207t Annie, 119–120, 131 Aladdin, 141 Anschutz, Phil, 147–148n Alexander, 150–151n Answer print, 564 Alice in Wonderland, 157–158n, 161–163n Apple Computer Alliance Films, 79 Internet book downloads via, 367, 375n Alliance of Motion Picture and Television music distribution by, 246–247, 279n Producers (AMPTP), 156–157n ownership by, 272n All in the Family, 147–148n Apple TV, 60–61n All of Me, 149n Arango, T., 58n Alm, R., 37n ARB (American Research Bureau), 564 Alternative Distribution Alliance (ADA), 277n Arbitron, 290–291, 312n Alton Towers, 519–520n Arens, W. F., 63n AM (amplitude modulation), 564 Aristotle, 4, 34n Amazon Article 20, 157n home video/DVD sales, 168–169n Article 48, 152n Internet book downloads via, 367, Artisan, 207t 375n Aspect ratio, 565 AMC Entertainment, 78–79 Asset, 565 AMC Entertainment Inc. Form 10-K, 160n Asset values, 565 American Beauty, 152n Associated Artists Productions, 111n American Express, 109–110n Associated Communications, 233n American Federation of Musicians (AFM), Association of Talent Agents, 148–149n 256–257, 271n Asteroids, 396n, 399–400n American Federation of Television and Radio Atari, 389, 390f, 395–397n Artists (AFTRA), 256–257 The A-Team, 233–234n American Guild of Musical Artists (AGMA), AT&T, 346 256–257 Atlantis hotel-casino, 440n American Idol, 236–237n, 319n Audience, primary/target, 565 American Institute of Certified Public Audio Home Recording Act of 1992, 274n Accountants (AICPA), 179, 224n Auletta, K., 314n, 374n American Multi-Cinema, 78–79 Austin Powers, 160n American roulette, 425t, 540 Availability, 565 American Society of Composers, Authors, Avatar and Publishers (ASCAP), 254, 271n, exhibition of, 161–162n 273–274n licensing fees, 232–233n Amortization of debt, 564 performance, 162–163n Amortization of negative costs, 564 profitability, 143f AMRA (American Mechanical Rights Agency), sell-through of, 166n 255 technology in making of, 77 Amusement park industry Avco-Embassy, 233n advertising by, 51f, 52t, 51–52, 62–63n Avenue Q, 499–501n attendance, 516–517f The Aviator, 147–148n Disneyland/Disney World, 509, 519n economic sensitivities, 516t, 515–516, Baade, R. A., 470n 516–517f, 517 Baccarat banque, 425t, 540–541 facilities, major, 511t Back to the Future, 115 financial operations, 513t, 510–513, 514f, The Bad News Bears, 223n 514–515t, 515, 520n Baer, Ralph, 395n future trends, 518 Bag of Bones, 374n history of, 508–509, 519–520n Bagwell, K., 53, 63n

Index 629 Baker & Taylor, 374–375n Bid letters, 128, 129f, 159n Bakken, 519n Bid request, 566 Bakker, G., 242n Big Six Wheel, 543 Bally Manufacturing Company, 388, 395–396n Billboard, 281–282n Bandwidth, 565 Billing method, 180 Bank loans, 120–121, 152n, 155–156n Billy Jack, 128 Barnes & Noble, 374–375n Billy Joel Greatest Hits, 277–278n Barnes, B., 237–238n, 499–501n Bing, 49–50 Barrett, N. S., 13 Bingo, 416–417, 438n, 543, 548n Barriers to entry Binion’s Horseshoe, 441n advertising and, 53 Black Hawk Down, 147–148n book publishing, 374n Blackjack, 425t, 537–538 lowering of, 46–47 Black-Scholes model, 32, 55–56 supply/demand factors, 15–17 The Blair Witch Project, 207t Bart, P., 242n Blanket licenses, 273–274n Barter, 63–64n Blind bidding, 566 Barter-syndication agreements, 215t, 213–215, Block booking, 566 215–216t, 235–236n, 293 Blockbuster Entertainment Bartlett, J. C., 56n home video/DVD sales, 168–169n Barwise, P., 299, 317n revenue sharing, 165n Basic service, 565 VOD distribution by, 60–61n Batman Blogging, effects of, 49–50 accounting disputes, 229–231n Blood Brothers, 149n financials, 207t The Bodyguard, 277–278n merchandising, 141, 169n Boldrin, M., 62n release strategy, 160n Bombay Dreams, 499n Batman Begins, 152–154n Bonanza, 234n Batman Forever, 159n Bond, 566 Baumol, W. J., 479–480, 487, 491–492, 497n, Booker, 566 503n Books-A-Million, 374–375n BBC (British Broadcasting Corporation), 318n Book value, 533, 566–567 Beanie Babies, 395n Borders, 374–375n The Beatles, 277–278n Born in the U.S.A., 277–278n Beauty and the Beast, 141, 485t, 499–501n Boston, 277–278n Becker, G. S., 5 Bovee,´ C. L., 63n Beebe, J. H., 303, 318n Bowen, W. G., 479–480, 487, 491–492, 497n, Below-the-line costs 503n defined, 565 “Bowie” bonds, 152n movie industry production, 125, 155–156n Box-office receipts, 567 Berger,A.J.,407 Bradsher, K., 466n Berliner, Emile, 245 Branch, 567 Berners-Lee, Tim, 59n Break, 567 Berney, R., 227n Breakeven point, 567 Bernoulli, Daniel, 435 Breaking Away, 158–159n Best Buy, 168–169n, 279n Breimer, S. F., 231n Beta House, 168n Broadcasting industry. See also Cable industry Betbug, 439n advertising by, 51f, 52t, 51–52, 62–63n, 291, Beverly Hills Cop, 207t, 229–231n 312n Bialik, C., 277–278n as advertising medium, 287–288 Bicycling advertising time sales basis, 292, 313n defined, 565 affiliate compensation relationships, 315n syndication agreements, 221, 239n, 565 aggregate spending, various media, 293, 294t Bid, 565–566 audience measurement in, 291, 312n

630 Index Broadcasting industry (cont.) operating cash flow, 308–309, 320–321n barter-syndication deals, 215t, 213–215, taxation, 320–321n 215–216t, 235–236n, 293 valuations, 307t, 307–310, 320–321n, 348t cable’s impact on, 310–311, 332f, 344–345, variable cost elements, 305t, 304–305, 305t, 353–354n 318–319n challenges, 310, 321–322n Broadcast Music Incorporated (BMI), 254, cost per rating point (CPP), 292f, 292 271n, 273–274n cost per thousand households (CPM), 292f, Broadway 292, 569 overview, 484f, 480–484, 485t, 486, distribution, Internet effects on, 47–49, 62n 497–498n Double Jeopardy Effect, 299, 317n price trends historically, 497n Duplication of Viewing Law, 299, 317n production costs, 497n DVRs, 316n profitability, 499–501n economics (macro), 302f, 301–303, profitability vs. Las Vegas, 497n 318n stage productions on, 497n economics (micro), 303, 318n statistics, 560t gross ratings points, 292, 313n Brokeback Mountain, 154n history of, 289f, 287–290, 311n Brown, C., 464n independents, public stations, 300–301, Bruck, C., 107n, 227–228n, 234n, 238n 317–318n Bruning, N., 407 inventories, 299–300, 317n Bryan v Itasca County, Minnesota, 438n late-night programming revenues, 319n Bubble, 158–159n mergers & acquisitions in, 296 Buchwald, Art, 229–231n national spot advertising, 291, 312–313n Buena Vista, 79–80 networks, affiliates, 297t, 295–297, 297f, Buffy the Vampire Slayer, 235n 314–317n Business cycle, 567 opportunities, 310–311, 322n Byrne, D., 271n, 276–277n, 279n organization, 293f, 293 performing rights royalties, 273–274n Cable Act of 1992, 295, 314n, 355n power ratios, 292–293, 313n Cable Communications Policy Act of 1984, 330, prime time access rule, 296 350n, 356n profitability, 298–299, 304–305, 310 Cable industry. See also Broadcasting industry; ratings, audiences, 299f, 296–299, 317n Television industry ratings points, 290 accounting conventions, 342–343, 352–353n reality programs, 319n advertising by, 52 regulation of, 293–295, 313–314n advertising revenues, 339f retransmission consent arrangements, 322n as ancillary movie market, 87t, 92–93f, 95t, royalty payments, 273n 96t, 95–96, 97t, 98f, 99, 109–110n share, 290–291 APB Opinion 17, 343 superstations, 300, 317n, 329, 583 bundling, 349–350n, 354n sweep period advertising, 291, 312n capitalization, 340t, 339–340, 342t, 342, 352n targeted ratings points, 292, 313n direct broadcast satellites technology of, 288–290, 311–312n (DBS)/direct-to-home (DTH), 332f, 345, time spent listening (TSL), 313n 353–354n upfront sales, 298, 316–317n distribution, Internet effects on, 47–49, 62n Broadcasting industry financials FASB Statement 34, 343 accounting practices, 305–307, 319–320n FASB Statement 51, 342 APB Opinion 21, 306 franchising, 334–336, 350–351n broadcast cash flow, 308–309, 320–321n future trends, 348–349, 355–356n factors affecting, 24–25, 37n history of, 331f, 328–331, 332f, 333t, 333, FASB Statement 63, 307, 320n 349–350n highly leveraged transactions (HLTs), 321n impact on broadcasting, 310–311, 332f, leveraged buy-outs (LBOs), 309, 321n 344–345, 353–354n

Index 631 Internet service, 346, 354–355n Canadian Radio-Television and investment per subscriber, 342t Telecommunications Commission (CRTC), licensing fees, 232–233n 315–316n MMDS/LMDS, 345, 354n Candle in the Wind, 277–278n multiple system operators (MSOs) defined, Cannon Group, 109n, 233n 579 Cantor Futures Exchange, 154n operating revenue, expenses, 336t Capeman, 499n operations, 333–334, 335t, 335f, 336t, 350n Capital Asset Pricing Model (CAPM), 171–172n pay-per-view (See Pay-per-view (PPV) Capitalized value, 568 services) Capitol Records, 277–278n regulation of, 334–336, 349–351n, 355n Carey, Mariah, 281n retransmission consent arrangements, 322n Carmike Cinemas, 78–79 revenue generating units (RGUs), 353n Carnal Knowledge, 117–118 revenue sharing relationships, 332f, 339f, Carney, M., 318n 337–339, 351–352n Carolco, 158–159n, 353n reversal in, 57n Carrey, Jim, 228–229n satellite master antenna television (SMATV), Carrie, 499n 345 Cars, 169n sequential distribution in, 158n Carter, B., 236–237n, 316n, 321–322n sports broadcasting by, 452t, 450–452, Cartrivision, 163–164n 463–465n Carvajal, D., 374–375n subscriber churning, 352n Cash flows subscriber size, capacity, 335t defined, 568 subscription television (STV), 345, 354n discounted cash flows (DCFs), 31, 65n, 571 syndication agreements, 234–235n evaluation of, 531, 531–532 telephone service, 346, 354–356n in valuation, 26, 38n, 531, 531–532 television viewing trends, 61n Cats, 485t, 499–501n top ten dominant networks, 333t, 340t Caves, R. E., 145, 494 valuation, 348t, 346–348, 355n CBS Cable industry financials. See also affiliate compensation relationships, 315n Movie-television financial accounting cable channel discontinuations, 350n investor financing, 151n commercial availability expansion, 317n trends in, 28f, 26–28, 29t, 29 corporate asset transfers, 279–280n Cable TV, 567–568 distribution by, 58n Cablevision, 58n holdings, 295 Cablevision Systems, 340t late-night programming revenues, 319n Cagney and Lacey, 237–238n mergers & acquisitions, 296 California v Cabazon Band of Mission Indians, in mergers/acquisitions, 107n 438n production interests, 107n Call of Duty: Modern Warfare 2, 391, 398–399n release strategies, 277–278n Canada sports broadcasting by, 463–466n advertising revenues, 297t television series compensation agreements, broadcasting regulation in, 313n 239–240n cable’s market dominance in, 330, 331f, Cell phones, 246–247, 271–272n 332f Chancellor, 312–313n casino gaming in, 439n Chappell Music Publishing, 279–280n clearance agreements in, 160n Charter Communications, 340t labor unions in, 156–157n Chicago, 42, 485t release strategies, 160n A Chorus Line, 485t revenue flows, 206f, 205–207, 233n Christiansen, E. M., 464n television/broadcasting industry in, 296, 297t, Cieply, M., 228–229n 297f, 315–316n Cinema Center Films, 107n, 233n theater exhibition dominants in, 79 CinemaNow, 60–61n

632 Index Cinemark USA, 78–79 Contracts Cinematographe,´ 106n barter-syndication agreements, 215t, Cinematograph Films Act of 1938, 106n 213–215, 215–216t, 235–236n, 293 Cineplex Galaxy, 79 defined, 569 Cineplex Odeon, 160n, 232n method, 180 Cinerama, 107n, 233n movie distributor-exhibitor, 129f, 127–129, Circuses, 486, 498n 131, 159–160n Clash of the Titans, 161–162n options agreements, 115 Classification and Ratings Administration PFD agreements (See (CARA), 161n Production-financing-distribution (PFD) Clearance, 568 agreements) Close Encounters of the Third Kind, 161–162n production costs in, 215–217, 236–238n CNN, 351n syndication agreements (See Syndication Coase Theorem, 462 agreements) Cobb, C., 37n Convertible debenture, 569 Coca-Cola, 107n, 111n, 232n, 395n Copyright Arbitration Royalty Panel (CARP), Co-financing, 152n 255–256, 273–274n ColecoVision, 396n Copyright laws, 46, 59n, 62n Collins, G., 498n Corporate Gaming Act of 1969, 411 Columbia House, 280n Correlation, 569 Columbia Pictures The Cosby Show, 148n, 235n, 237–238n film library utilization rates, 101t Costco book sales, 366–367, 374–375n first gross participation deals by, 227–228n Cost per thousand (CPM), 292f, 292, 376n, 569 history of, 73 Cost recovery, 569–570 limited partnership offerings by, 150n Cowen, T., 498n as major distributor, 79–80 Cox, W. M., 37n in mergers/acquisitions, 107n Cox Communications, 312–313n, 340t, 352n in mergers/acquistions, 99 Cracked Rear View, 277–278n real estate assets, 111n Cramer, Gabriel, 435 theatrical rental market shares Crandall, R. W., 350n winners/losers, 207t Craps, 425t, 539t, 538–539, 539t Columbia Records, 245–246, 271n Crash, 154n Combination deals, 117–118, 150n Creative Artists Agency (CAA), 116, 148–149n Comcast, 79–80, 107n, 340t, 346, 351–352n Credit Lyonnais, 111n Coming to America, 229–231n Creswell, J., 283n Commando, 208t Crockett, R. O., 271–272n Commercial, 568 Crosby, Bing, 277–278n Common stock, 568–569 Cross, G., 382 Common-stock offerings, 149n, 117–149, 149n, Cross-collateralization, 570 152–154n Crown Books, 374–375n Communication theory, entropy in, 57n CSI: Crime Scene Investigation, 239–240n Comparison methods, valuation, 31–32 Cuban, Mark, 154n Competition, 569 The Curious Case of Benjamin Button, Complementary goods, 569 147–148n Completion bonds, 155–156n Current assets, 570 Compulsory license, 569 Current liabilities, 570 Computers, personal, 397n Curt Flood v Bowie Kuhn, 455, 466–467n Computer Space, 395–396n Conan O’Brien show, 319n Dallas, 234n Cones, J. W., 190, 220, 226n, 231–232n Dance of the Vampires, 499n Consent decree of 1948, 73–74, 75t, 78, 107n Dancing With the Stars, 319n Content Partners, 152n Daniel Boone, 218 Context as king, 49–50 Daniels, B., 199

Index 633 Dannen, F., 260–261, 266, 278–279n Discretionary spending, 571 The Dark Knight, 162–163n Disney. See Walt Disney Company Dateline, 238n Disney, Walt, 509 The Da Vinci Code, 228–229n, 374n Disneyland/Disney World, 509, 519n Davis, A., 37n Distribution fee, 571 Day and date release, 570 DIVX, 163–164n A Day At The Races, 227–228n Donahue, S. M., 232n Deal or No Deal, 319n Doom, 399n Debentures, 570 Dorfman, R., 54, 63n Debt/equity ratios, 532 DreamWorks Decca, history of, 245–246, 271n exhibitor settlements, 242n DeCSS (de-Content Scrambling System) loan securitization use by, 152n software, 275–276n as major distributor, 79–80 Defender, 396n Driving Miss Daisy, 147–148n Defense Advanced Research Projects Agency Drop, 571–572 (DARPA), 59n Dune Capital Management, 152–154n Deferral or apportionment method, 180 DVDs Def Jam, 281n in accounting disputes, 229–231n DeFleur, M. L., 38n in cash breakeven deals, 228–229n De Grazia, S., 34n deficit financing offset by, 234n DeLaurentiis Entertainment Group Inc., 109n, distribution, Internet effects on, 47–49, 62n 117–118, 233n evolution, marketing of, 163–164n Delivery method, 180 introduction, impact of, 138, 165n Delphi II, 150n performance patterns, 162–163n, 166n Demand, 570 portability, enabling, 58n Demmert, H. G., 466–467n, 471n residual payments, 156–157n Dennis, E. E., 38n revenue sources, 98t Dependency ratio, 37n sell-through by, 166n Depreciation, 570–571 sell-through vs. rental, 138, 164–165n DeSerpa, A. C., 5 sequential distribution of, 126, 127f, Designated market area, 571 157–159n De Silva, I., 108n syndication of, 213, 235n Desperate Housewives, 322n video-to-gross (VTG) ratio, 231n De Vany, A., 132, 142, 145, 170n Dexter, 237–238n E. R., 236–238n Dharma & Greg, 236–237n Eadington, W. R., 436 Diary of a Mad Black Woman, 207t Eagles Greatest Hits, 277–278n DiCaprio, Leonardo, 147–148n Eastwood, Clint, 228–229n Dickson, William, 72 EBITDA Digital convergence, 46–47 amusement parks, 517–518, 520n Digital Entertainment Content Ecosystem broadcast cash flow, 308–309, 320–321n (DECE), 58n cable industry capitalization, 340t, 339–340, Digital Millennium Copyrights Act of 1998 342t, 342, 352n (DMCA), 59n, 273n defined, 572 Digital Performance Right in Sound Recordings exhibition industry multiples, 107n Act of 1995, 273n gaming industry, 440n Direct broadcast satellites (DBS)/direct-to-home music industry multiples, 283n (DTH), 332f, 345, 353–354n operating cash flow, 308–309, 320–321n Direct-distribution expense, 571 overview, 26, 38n Directors Guild, 156–157n publishing industry, 373, 377n DirectTV, 312n, 465–466n World of Warcraft, 397n Discounted cash flows (DCFs), 31, 65n, 571 EchoStar, 58n Discount rate, 571 Econometrics, 572

634 Index Economic growth, 572 Epstein, E. J., 228–229n Economic model, 572 Equilibrium, 573 Economics, xix, 572 Equity, 573 Edison, Thomas, 72, 244–245, 271n ErinMedia, 312n The Ed Sullivan Show, 234n ESPN, 351n, 465–466n Edwards Theaters, 78–79 E.T. the Extraterrestrial, 207t Ehrenberg, A., 299, 317n Europe, cinema history in, 72–73, 106n Elastic demand, 572 Everybody Loves Raymond, 216, 237–238n Elasticity Excess reserves, 573 A/S ratio and, 54f, 53–54, 54f, 55, 63n Expected utility, 13, 35–36n defined, 572 Eye of the Needle, 149n supply/demand factors, 19–20, 21f, 36–37n Elberse, A., 59–60n Fabrikant, G., 352n Electronic Video Recording (EVR) system, Facebook, 44–45, 50 163–164n Fairchild Instrument, 396n Eller, C., 108n Famous Players, 160n Elliott, S., 321–322n Fan Tan, 543–544 Elton John, 277–278n The Fantasticks, 499–501n Embassy Pictures, 107n Farber, D. C., 501n EMI Fast Break, 149n asset transfers, 283n Fatsis, S., 463–464n, 467–469n corporate asset transfers, 279–280n Federal Baseball Club of Baltimore v National music distribution by, 261–262, 280n League, 455 royalties, advances, 282n Fiddler on the Roof, 499–501n England (United Kingdom) Fielding, R., 74 advertising revenues, 297t FilmDallas, 151n analog to digital conversion in, 313–314n Film Finances, 155–156n cinema history in, 72–73 Film libraries loan financing laws in, 152n amortization of, 188, 225–226n movie theatre admissions, 556t as asset, 101t, 99–101, 103, 104t, 110–111n, Enterprise value (EV) 117–118 EBITDA ratio, 31–32 co-financing, 152n valuations, 64–65n, 532, 532–533 in combination offerings, 117–118, 149n Entertainment business generally net present value (NPV), 102 ancillary market returns, 526 Film rental, 573 capital costs, 526, 526–527 Filmtrax Copyright Holdings, 283n defined, xix, 4 Filmways Corporation, 225–226n, oligopolistic structure in, 526, 526–527 233n per-unit marketing expenditures, 526 Final offer arbitration (FOA), 467–469n product extinction in, 527, 527–528 Finding Nemo, 166n, 227n product success vs. new product Finding Neverland, 147–148n introductions, 526 Finn, A., 110n psychological roots, 41–42, 56–57n Fireman’s Fund Insurance, 155–156n public good characteristics, 527 First Sale Doctrine, 166n securities, evaluation of, 529, 530f, 529–530, Fisher, D., 464n 530f, 533 Flashdance, 119–120 standardization in, 527 Fleetwood Mac, 277–278n technological development in, 527 Fleming, M., 228–229n universal appeal of, 528 Flint, J., 239–240n Entertainment Channel, 350n FM (frequency modulation), 573 Entertainment Tonight, 235n, 238n Ford, Harrison, 229n Enter the Matrix, 397–398n Foreign exchange, 573 Entry barriers. See Barriers to entry Forrest Gump, 147–148n EO Corporation, 155n Fort, R., 463n

Index 635 Four-wall, 573–574 blackjack, 425t, 537–538 Four Weddings & a Funeral, 207t casino classification, 409–410, 417t Fox, William, 73 craps, 425t, 539t, 538–539, 539t Fox Broadcasting (FOX) credit policies, 431–432, 442n affiliate compensation relationships, 315n French roulette, 425t, 540 FX network, 314n funding functions, 421–422, 439–440n holdings, 295, 315n history, ancient, 407–408 mergers & acquisitions, 296 history, United States, 409t, 408–409, 417, reality programs, 319n 418f sports broadcasting by, 465–466n horse racing (tracks, OTB), 413–414, 415t, Fox Film Company, 73 437n, 546, Fox News Channel, 351n 548n Fox Studios Indian reservations, 414–416, 417t, 438n, exhibitor settlements, 242n 442n loan securitization use by, 152n Internet effects on, 61n, 436, 443n project acceptance/rejection by, 147–148n junkets, 430, 437n, 440–442n revenue/star salary relationships, 236–237n keno, 543, 548n series syndications, 235n legalization of, 421–422, 440n syndication interests ownership by, lotteries, 414, 416f, 437–438n, 545–546, 548n 240–241n macroeconomics, 420f, 419–421, 439n theatrical rental market shares marketing, 420f, 429–430, 431f, 442n VOD distribution by, 60–61n martingales, 548n Fox-Warner settlement, 58n Nevada (See Nevada) France New Jersey (See New Jersey) advertising revenues, 297t operations, 434t, 432–434, 442n, 548n analog to digital conversion in, 313–314n Pai Gow, Fan Tan, Sic Bo, 543–544 broadcasting regulation in, 313n pan (panguingue), 544 cinema history in, 72–73, 106n poker, 542 movie theatre admissions, 556t profitability, 425t, 424–425, 428t, 428f, 429, Franchise, 574 440–441n Frankenfield, W. C., 320n psychological roots of, 557t Frasier, 216, 236–238n punto banco, 425t Free reserves, 574 regulation of, 411–412, 414, 422–423, French roulette, 425t, 540 439–440n Frey, B. S., 489–490, 499n, 503n revenues, 409t, 415t, 419f, 419, 434t, 439n, Friedman, B., 432 548n Friedman, J., 108n riverboats, 414–416, 417t, 438n, 442n Friedman, M., 435 slot machines, 441n, 541–542, 548n Friedman, Stephen, 149n sports book, 426, 452–453, 464n, 546–548 Friends, 235–238n, 319n taxation, 437n, 548n Frude, N., 394 terminology, 426, 441n Furchtgott-Roth, H., 350n trente-et-quarante (rouge et noir), 544–545 Fust, Johann, 360–361 utility-function model of, 435f, 435f, FX network, 314n 434–435, 435f, 436 valuation, 424t, 423–424, 440n Game Boy, 397n Web-based, 417, 438–439n, 443n Game Cube, 398–399n Gandhi, 147–148n Gaming industry Gardner, J. M., 8–9, 35n advertising by, 51f, 52t, 51–52, 62–63n, 421, Garner, James, 218, 241n 439–440n Geffen Records, 279–280n American roulette, 425t, 540 Gemma, 254 baccarat banque, 425t, 540–541 General Cinema Corp., 233n Big Six Wheel, 543 General Film Company (the Trust), 72–73 bingo, 416–417, 438n, 543, 548n Germany, 150–151n, 556t

636 Index Gertner, J., 312n Harrah’s casinos, 430, 440n Gilpin, K., 498n Harris, D., 467n Gladiator, 152n Harris survey, work vs. leisure time, 35n Godbey, G., 35n Harry Fox Agency, 255 Godzilla, 159–160n Harry Potter, 160n, 169n Gold, R., 37n Harry Potter and the Sorcerer’s Stone, 224n GoldenEye, 391 Harvey, 227–228n The Golden Girls, 235n Hasbro, 384 Goldmark, Peter, 163–164n Head end, 575 Gomes, L., 59–60n Healy, P., 499–501n Gone with the Wind, 224n Hearn, G., 56n Goodell, G., 97, 198 Heaven’s Gate, 207t Good Morning Vietnam, 151n Hedge funds, 121–122, 152–154n, Good Night, and Good Luck, 154n 227n Goodstein, D., 37n Hedges, J. N., 34–35n Google, 49–50 Heilbrun, J., 495, 498n Gosford Park, 147–148n Hello, Dolly, 499–501n Gottlieb, Williams, and Stern, 388, 395n Helyar, J., 464–465n The Graduate, 117–118, 147–148n Henig, R. M., 34n Grammer, Kelsey, 236–237n Herfindahl-Hirschman Index, 25–26, 38n, Grampp, W. D./, 498n 471n Grand Theft Auto III, 398n Hero at Large, 149n Grand Theft Auto IV, 398–399n Heroes, 319n Grant, P., 61n Herrick, T., 470n Gran Torino, 228–229n Hi-fi stereo/cassettes, 246, 272n Gray, C. M., 495, 498n Hirsch, J., 498n Green, J., 497n Hodiri, M., 461, 470–471n Greenlees, E. M., 430 Hofler, R., 499–501n Grokster, 275–276n Hold, 575 Gross domestic product (GDP), 24–25, 37n, 574 Holdover figure, 575 Gross national product (GNP), 24–25, 37n, 574 Holiday, 228–229n Gross rentals, 575 Hollywood Gross win, 575 diversity in, 78 Growth in economies of scale, 46–47 history of, 73 GRP (gross rating point), 574–575 outside investors in, 154n Guber, P., 242n real estate assets in, 103–106, 111–112n Guitar Hero, 398n Hollywood Pictures, 79–80 Gunsmoke, 234n Hollywood Stock Exchange, 154n Gutenburg, Johann, 360–361 Holson, L. M., 227–228n Gwathmey, E., 72 Home Alone, 115, 207t Home Box Office (HBO) Hacker, Philip, 229–231n as ancillary market, 109–110n Halo, 398n as distributor, 337 Halstead, T., 37n history of, 329, 349n Hameroff,E.J.,63n investor financing, 151n Handle, 575 in mergers/acquisitions, 107n Handleman, 280n Silver Screen Partners, 119, 120t, 151n Hannah Montana, 161–162n Home Improvement, 239–240n Hansell, S., 275–276n Homes passed, 575 Hansmann, H., 503n Homes using television, 575 Harburg, E., 499n, 501n Home video industry. See also Movie-television Harmon, A., 61n, 275–276n financial accounting HarperCollins, 374–375n advertising spending in, 51, 52t

Index 637 as ancillary movie market, 87t, 92–93f, 95t, Ilg, R. E., 8–9, 35n 96t, 95–96, 97t, 98f, 99, 109–110n ILoveLucy, 147–148n direct-to-video features, 139–140, 168n Income effect, 11–13, 36n, 575–576 DVDs (See DVDs) Independence Day, 147–148n, 207t film library utilization rates in, 101t, 101–102 India, blocked currency funds in, 222, 242n financial accounting, 200, 231–232n Indiana Jones, 162–163n first-sale rights, 256, 274–275n Indiana Jones and the Kingdom of the Crystal independent producers, 139, 166–168n Skull, 162–163n, 229n minimum guarantees (MGs), 167–168n Indian Gaming Regulatory Act (IGRA) of 1988, pay-per-view services (See Pay-per-view 414–416, 438n (PPV) services; Video on demand) Indifference curve, 576 presales of rights in, 117–118, 150n Industry, xix residual payments, 156–157n Inelastic demand (inelasticity), 576 revenues, 137f, 137–138, 161n, 164n Inflation, 576 revenue sources, 98t Ingram, 374–375n rights fractionalization, 139, 166–167n Input-output (I/O) tables sell-through vs. rental, 138, 164–166n advertising, 51–52, 63n trade effects, 92–94, 109n generally, 29, 38n videoondemand(See Video on demand) In Rainbows, 279n video-to-gross (VTG) ratio, 231n Intellivision, 396n Home video industry marketing Interest, 576 DVDs (See DVDs) International Creative Management (ICM), 116, overview, 136f, 140f, 137–140, 140f 148–149n price setting, 138–139, 140f, 165–166n International Federation of the Phonogram prints and advertising (p&a) commitments, Industry (IFPI), 271n 167n International Film Guarantors (IFG), 155–156n revenues, 137f, 164n Internet revenue-sharing, 138, 165n accounting issues, 55, 63–64n sell-through vs. rental, 164–165n advertising rates, 62n VCRs, 163–164n advertising revenues, 294t Homo Ludens (Huizinga), 34n as agent of change, 48f, 47–49, 56, 59–62n Hootie & the Blowfish, 277–278n book downloads via, 367, 375n Horse racing (tracks, OTB), 413–414, 415t, as cable service, 346, 354–355n 437n, 546, 548n development, history of, 59n Hoskins, C., 110n downloads, residual payments for, 156–157n Hotel California, 277–278n downloads, sequential distribution of, 126, Houston, Whitney, 281n 127f, 157–158n Howard the Duck, 207t effect on newspaper industry, 369 How to Train Your Dragon, 161–162n fee formulas, 204 Hoyts, 78–79 indie film distribution via, 167–168n Huberman, B. A., 58n in movie ancillary market development, 99 Hudson Hawk, 207t performing rights royalties, 273–274n Hughes, R. J., 497n revenue classification, 63–64n Huizinga, Johan, 34n stock options valuations, 32, 55–56, 64n Hulu, 311, 322n unique (Web site) visitors, 585 Hungary valuation issues, 55–56, 64–65n blocked currency funds, 222, 242n Interstate Wire Act of 1956, 438–439n, development incentives in, 150–151n 443n Hurst, E., 7–8 Inventory, 576 Investment tax credits (ITCs), 150n IAG Research, 159n iPods IAmLegend, 162–163n distribution, Internet effects on, 47–49, 62n IFL Films, 207t history of, 251–252, 271–272n

638 Index Iron Man, 227n Kirkorian, Kirk, 111n Iron Man 2, 162–163n Kiss of the Spider Woman, 151n Isenberg, B., 57n Knecht, G. B., 376n Ishtar, 207t Knee, J., 44, 110n Italy, movie theatre admissions, 556t Knoblock, S., 56n iTunes, 60–61n, 157–158n, 168–169n, 251–252, Knoedelseder, W., 278–279n 275–276n Knots Landing, 234n Ives, N., 375n Kramer vs. Kramer, 207t Kyriazi, G., 508 Jackson, Michael, 277–278n, 281n Jackson, Peter, 229–231n, 239–240n Labor force, 576 Jagged Little Pill, 277–278n Labor unions James Bond, 141, 160n movie production, 125–126, 156–157n, Japan 215–216 advertising revenues, 297t sports, 456f, 455–456, 457t, 466–467n analog to digital conversion in, 313–314n Laemmle, Carl, 73 broadcasting regulation in, 313n Laird v United States, 469–470n movie theatre admissions, 556t La Pointe, J., 463n music industry in ﬁg 6.4, 252–253 The Last Action Hero, 207t, 229–231n performance royalties in, 254 Latin America, performance royalties in, studio purchases by, 154–155n 272n Jaws, 115, 154n, 207t Law and Order, 234n, 239–240n Jay-Z, 281n Law and Order: Criminal Intent, 237–238n Jeopardy!, 235n Law of Connectivity, 45f, 45, 58n JFK, 229–231n Led Zeppelin, 277–278n John Mackey et al. v National Football League, Led Zeppelin IV, 277–278n 467n Leeds, J., 278–279n Johnson, I., 109n Leedy, D. J., 191–193, 225n Jones, Tommy Lee, 227–228n Leeper, Robert, 219 Josephson International, 148–149n Legal issues J.P. Morgan Hemisphere Film Partners, layers, 46, 58–59n 152–154n limitations, concentration issues, 46–47 Jurassic Park, 141, 207t, 224n Long Tail effects, 50f, 49–51, 59–60n, 144f Jurgensen, J., 282n overview, 528 piracy, 529 Kagan, P., 170–171n regulation, 528 Kahn, J., 63n taxation, 528, 528–529 Kapner, S., 109n Legendary Pictures, 152–154n Kapusinski, Albert, 107–108n The Legend of Zelda, 391, 397n Katz TV Group, 234–235n Leggo, 384 Kavanaugh, Ryan, 229n Legs, 577 Kelly, K., 57–58n Leisure time activities Keno, 543, 548n aggregate spending on, 550t Kerasotes Theater, 161n earnings, production/nonsupervisory Kindle, 375n workers Kinetoscopes, 72, 106n expansion of, 6t, 5–6, 6–8f, 8t, 10t, 34–35n King, Graham, 147–148n recreation, 4, 24f King, Stephen, 374n time costs, 5, 35n, 525, 525–526 King’s Entertainment Company, 519–520n work vs., 3–4, 34n Kings Road Productions, 149n Leno, Jay, 319n Kirch, Leo, 224–225n Leonard, D., 275–276n Kircher, Athanasius, 106n Leonhard, Gerd, 62n Kirch Group, 224–225n Leonhardt, D., 497n

Index 639 Leontief, Wassily, 63n Lowry, T., 464–465n Les Miserables´ , 485t, 499–501n Lucas, George, 229n Letterman, Dave, 319n Lucasfilm, 207t Lev, B., 63n Lyman, R., 395n Leveraged buy-outs (LBOs), 309, 321n Levine, D. K., 62n Macroeconomics, 577 Levinson, P., 311n Madden 2004, 400n Lewis, P., 400n Madden NFL football game, 398n Lewis, R., 369 Madea, 229n Liabilities, 577 Madonna, 281n Limited partnerships, tax shelters, 120t, Magazine industry 118–120, 150–152n advertising by, 51f, 52t, 51–52, 62–63n Lin Broadcasting, 58n advertising revenues, 294t Linder, S. B., 480 financials, 361t Linfield, S., 110n merchandising by, 169n Lion King 1½, 168n profitability, 367t, 367–368, 376n The Lion King, 141, 485t, 499–501n revenues, 369–370, 371t, 376n financials, 207t Magnum P. I., 237–238n merchandising of, 42 Make-good, 577 Lionsgate Mama Mia!, 499–501n breakeven deals by, 229n The Mambo Kings, 499n deficit financing, 234n Mangels, W. F., 509 production, distribution activities, 80 Manly, L., 321n real estate assets, 111n Manning, W. G., 303, 318n winners/losers, 207t Marcus Corp, 78–79 Lippman, J., 241n Marginal cost, 577 Listen.com, 275–276n Marginal revenue, 578 Literary agent role, movie industry, 115 Margolies, J., 72 Literary property agreements (LPAs), 115 MarketCast, 159n Little Darlings, 149n Market share, 578 Little Ham, 501–502n Markoff, J., 321n Live Nation, 275n, 281n Marks, P., 57n Loan securitization, 121, 152n Marriott Corporation, 519n Local marketing agreement (LMA), 577 Martin, D., 57n Location-based entertainment (LBE). See Martingales, 548n Amusement park industry Marvel Enterprises, 169n Loew, Marcus, 73 Marx Brothers, 227–228n Loews Cineplex, 78–79 M∗A∗S∗H, 319n London, cinema history in, 72–73, 106n Massively multiplayer online games (MMOGs), The Lone Ranger, 237–238n 390–392, 397–399n Long Tail effects, 50f, 49–51, 59–60n, Mass media, 38n 144f The Matrix,77 The Lord of the Rings Matsushita, 154–155n, 163–164n accounting disputes, 229–231n, 239–240n Mattel project acceptance/rejection, 147–148n Intellivision, 396n release strategy, 160n merchandising by, 169n revenues, 172n revenue losses, 397n Lorimar, 111n, 224–225n as toy industry dominant, 384 TheLostWorld, 224n Mattel/General Instruments, 350n The Lost World: Jurassic Park, 162–163n Maxwell, C. T., 37n Lotteries, 414, 416f, 437–438n, 545–546, 548n MCA TheLoveBoat, 234n in common stock offerings, 149n Love Story, 147–148n corporate asset transfers, 279–280n

640 Index MCA (cont.) Michener, J. A., 455–456 first gross participation deals by, 227–228n Microeconomics, 578 inventory, amortization of, 223n Million Dollar Baby, 147–148n labor union negotiations, 156–157n Mirage Resorts, 430, 440n optical videodisc, 163–164n Miramax, 80 pay-per-view offerings by, 353n Missile Command, 396n television revenue growth, 224n Mission: Impossible, 224n McCarthy v. United States, 469–470n Mission: Impossible III, 228–229n McCartney, S., 466–467n Miss Saigon, 485t McClanahan v Arizona Tax Commission, 438n MMDS/LMDS (Multichannel multipoint McFadyen, S., 110n distribution of signals), 345, 354n McGrattan, E. R., 7–8 Mobile devices McKinley, J., 499–502n cellphones, 246–247, 271–272n McLuhan, Marshall, 42–44, 56, 57n, 287, 311n downloads, sequential distribution of, 126, McPhee, William, 317n 127f, 157–158n Mechanical rights (royalties), 578 See also iPods (See iPods) Royalties residual payments, 156–157n Media entropy, 43, 57n Model, 578 Media industry, advertising spending in, 51, Modern portfolio theory, 145, 152n, 578 52t Moldea, D. E., 464n Media laws Monk, 237–238n closure, 42–43 Monopolistic competition, 25–26, 38n entropy/fragmentation, 43, 57n Monopoly, 25–26, 38n, 578 exponentiality, 44, 57n Monopsony, 578 extension, 42 Monte Carlo statistical methods, 145, 172n herding/synchronicity, 43 Mood alteration, 56n overview, 42–44 Moonlighting, 239–240n retrieval, 43, 57n Moore, J., 426 reversal, 43, 57n Moore’s law, 59n spread, 44–45, 57–58n Morell, J., 467–469n Meet the Press, 234n Morgenstern, O., 435 Melrose Investors, 152–154n Morissette, Alanis, 277–278n Memory effects, 56n Morpheus, 275–276n MenInBlackII, 227–228n Mortal Kombat,42 Merrill Lynch, 150n Motion Picture Patents Company (the Trust), Merv Griffin Enterprises, 107n 72–73 Metcalf, Robert, 58n Motown, 279–280n Metro-Goldwyn-Mayer v Grokster, 164n MovieBeam, 168–169n MGM Pictures Movie industry film library utilization rates, 101t admissions, 81f, 80–81, 81–82f, 82, first gross participation deals by, 227–228n 107–108n, 554t, 556t history of, 73 advertising spending in, 51, 52t limited partnership offerings by, 150n ancillary markets in, 87t, 92–93f, 95t, 96t, production, distribution activities, 80 95–96, 97t, 98f, 99, 109–110n purchase-method accounting applications, antitrust actions in, 73–74, 75t, 78, 107n, 132, 225–226n 161n rate agreements by, 226n A/S ratio, 54f, 53–54, 54f, 55 real estate assets, 111n block-booking in, 73–74 release strategies, 160n capital as evolutionary force in, 77–78 television revenue growth, 224n completion bonds, 155–156n theatrical rental market shares consent decree of 1948, 73–74, 75t, 78, 107n VOD distribution by, 60–61n Depression effects on, 73 Miami Vice, 237–238n distribution, Internet effects on, 47–49, 62n

Index 641 as entreprenurial, 71, 146–147 investment tax credits (ITCs), 150n evolutionary elements, 74–78, 107n investors, 116 exchange-rate effects, 92f, 87–92, 93f, lenders, 116 108–109n limited partnerships, tax shelters, 120t, exhibition in, 79t, 78–79, 107n 118–120, 150–152n film libraries (See Film libraries) literary property agreements (LPAs), 115 financial aggregates, 87t, 94, 109n loan securitization, 121, 152n history of, 72–74, 75t, 76f, 106–107n options agreements, 115 Hollywood (See Hollywood) performance, calculating, 162–163n home video (See DVDs; Home video private equity, hedge funds, 121–122, industry) 152–154n, 227n independent producers (states-righters), 80, Regulation D, 119, 151n 107n residual payments, 156–157n inventory-to-sales figures, estimated, 86, Movie industry marketing 87–88t advertising spot sales, 131, 160n legs, 577 aggregate booking contracts, 128 market share factors, 86 bidding, 132 oligopolistic structure of, 77–78 bid letters, 128, 129f, 159n pecking orders in, 79t, 78–80, 107n block booking, 132 portability, enabling, 58n box-office data comparisons, 88t, 129f, 133f, presales of rights in, 97, 109n, 118, 135 150n clearances, 130, 160n prices, elasticities, 83f, 83, 108n concession profits, 130–131, 200t production, distribution evolution, 79–80, contracts, conventional, 124f, 128–130, 107n 159–160n, 200t production activity shifts, 73 costs, 141–142, 169–170n production starts, capital, 83–84, 85f, 108n distributor-exhibitor contracts, 129f, 127–129, ratings, 161n 131, 159–160n real estate assets, 103–106, 111–112n, 133, exhibition industry characteristics, 123t, 129f, 161n 133f, 132–133, 135, 136f, 161–163n releases, inventories, 86, 87–88t, 108n flat rental contracts, 128 retrieval in, 43, 57n floor payments, 130, 160n revenue sources, 98t, 170n four wall contracts, 128 risks in, 71 holdbacks, 126–127, 158–159n technology development in, 74–77, 107n holdover clauses, 130 theoretical foundation of, 144–146, 171–172n home videos (See DVDs; Home video 3D format upgrade, 60–61n industry) ticket price, average, 555t market research firms, 159n time spent by adults on, 10t merchandising, 141, 169n trade effects, 92–94, 109n multiple picture licensing, 132 utilization rates in, 101t, 101–102 opening weekend performance, 134–135, Movie industry financials 161–163n aggregate settlements, 159–160n output deals, 141 bank loans, 120–121, 152n, 155–156n plaforming, 159n capital as evolutionary force in, 77–78 product splitting, 132, 161n, 222 co-financing, 152n release strategies, 131–132, 160–161n combination deals, 117–118, 150n rentals percentages, 135, 136f, 163n common-stock offerings, 149n, 117–149, revenue, maximum theoretical, 134, 161n 149n, 152–154n sequential distribution, 127f, 126–127, factors affecting, 24–25, 37n 157–159n foundations of, 116 technology in, 77 gross receipts formula, 159n ticket pricing, 131, 135, 220–221 industry sources, 116 windowing, 126–127, 159n

642 Index Movie industry production distributor-producer ethics violations, 222, above-the-line costs, 125 242n below-the-line costs, 125, 155–156n episodic television series revenue estimates, budgets, 123t, 122–123, 124f, 125, 154–155n, 187 227–229n ethics violations, 220–222 gossip in, 116 exhibitors ethics violations, 220–222, labor unions, 125–126, 156–157n, 215–216 241–242n literary agent role in, 115 expense item categorization, 198, 229n literary property agreements (LPAs), 115 exploitation costs, 186–187 overview, 114, 147n FASB Statement 34, 184–185 profitability (See Profitability) FASB Statement 53, 182, 185–186, 223n project acceptance/rejection, 115, 147–148n FASB Statement 142, 225n star salaries, 216, 236–237n feature-film licensing, 209–210, 233n talent agents role, 116, 148–149n fee formulas, 204, 232–233n Movielink, 60–61n, 168–169n film library amortization, 188 Movie-television financial accounting film revenue estimates, 187, 225n abandoned properties, 186, 188, 224–225n fin-syn restrictions, 217–218, 239–241n Accounting Principles Board Opinion 16, 225n first-dollar gross, 196, 228–229n adjusted gross, 196 gap financing, 233n advances, 226–227n gross after breakeven/breakeven, 196, 229n advertising, 221 home-video participations, 200, 231–232n AICPA guidelines, 179 in-house production/distribution, 190 amortization of inventory, 183t, 182–186, interest expenses, 184–185 216–217, 223–224n inventories in, 181–182 backlogs in, 181 inventory, amortization of, 183t, 182–186, barter syndication agreements, 213–215, 216–217, 223–224n 215–216t, 235–236n, 293 merger and acquisition, 188, 191, 198, bicycling, 221, 239n, 565 225–226n blocked currency funds, 222, 242n movies-of-the-week, 212, 217, 238n breakeven, 195–199, 227–231n net profits, 197, 229n calculation controversies in, 185–186, 187t, network option clauses, 211–212 224–225n packages/negative pickups, 189, 191, 226n cash breakeven deals, 228–229n participation deals, 193–200 cash breakeven zero deal, 229n participation points, 196 cash flow estimates, 188 perspectives in, 179–180 concession sales, 201t, 201, 232n PFD agreements (See contract clout in, 178–179, 223n Production-financing-distribution (PFD) co-op advertising, 201 agreements) coproduction-distribution, 195 pickups, 194–195, 198, 226–227n deficit financing, 234n pilots, 211, 217, 233–234n, 238n development, financing processes, 202f, 206f, playing the float, 221, 242n 210–212, 233–234n presales, 189 disbursement timing issues, 218–219, prints and advertising (p&a) costs, 184–185, 241n 227n disbursement tracking, 188, 225n private fundings, 189, 227n distribution charges, 193, 226n producers’ participations, distribution costs, issues, 215t, 217–218, cross-collateralizations, 199–200 238–240n production costs, 215–217, 222–223, distributor deals, expenses, 191–192t, 202f, 236–238n, 242n 202–204, 232–233n, 280n profit-capital cost interactions, 192t, 193, distributor-exhibitor computations, 200t, 201t, 226n 200–202, 232n programming, 202f, 206f, 209–219 distributor-exhibitor settlements, 221, 242n receivables, 186, 224n

Index 643 rent-a-distributor deals, 191, 198 concerts, theaters, 257, 271n, 275n rentals, 201 controlled composition clauses, 267, residuals, unamortized, 184, 224n 280–282n revenue flows, 191t, 191, 193, 194t, 199, copyright, 255–256, 273–275n 206f, 205–206, 207t, 207, 229–231n, 233n digital-only releases, 275–276n revenue-recognition factors, 180–181, 223n distribution, consolidation of, 246 risk-sharing deals, 197, 229n distribution trends, 61n, 251 rolling breakeven, 197–198 DVDs, mobile devices, 246–247, 251–252, series, made-fors, 202f, 206f, 211–212, 217, 271–272n 234n, 238n economic interplay in, 249f, 247–249, 250f, SOP 00–2, 186–188, 223–226n 253f, 272n SOP 93–7, 186–187 first-sale rights, 256, 274–275n step deals, 189 global, 253f, 252–253, 253f, 272n, 279n studio overhead, production costs, 204–205, guilds, unions, 256–257 233n hi-fi stereo/cassettes, 246, 272n syndication agreements (See Syndication history of, 244–247, 248f, 271n agreements) LPs, 245–246, 271n talent participations, 195–199, 227–231n mechanical royalties in, 255, 274n tax credits, rebates, 198 MIDI, 272n ultimate revenues, 187–188 MTV, 251, 272n video-to-gross (VTG) ratio, 231n online music stores, 251–252 write-downs, 184, 223–224n overview, 270–271, 284n Movie theaters performance royalties, 254, 272–274n distributor-exhibitor contracts, 129f, 127–129, phonograph, invention of, 244–245, 271n 131, 159–160n physical, digital shipments exhibitions, blocking of, 161–162n piracy in, 246, 272n, 275–276n exhibitor settlements, 242n radio in, 245, 271n, 312n industry characteristics, 123t, 129f, 133f, record manufacture, 245, 271n 132–133, 135, 136f, 161–163n royalty payments in, 245, 251, 254–259, MPEG (Motion Picture Experts Group), 271n 578–579 streaming services, 275–276n MS Flight Sim, 399n synchronization fees, 255 MTV, 58n, 251, 272n, 351n in United States, 249f, 247–249, 250f, 252, Multimedia, 579 253f, 272n Multimedia products, 370–372, 376–377n See Music industry financial accounting also DVDs; Home video industry artist contracts, 264–265 Multiple system operators (MSOs). See Cable artist perspective, 266t, 264–267 industry artist’s take, 266t, 266–267, 282n Munoz, L., 234n company perspective, 268t, 267–269, Murder She Wrote, 237–238n 282–283n Murphy, A. D., 146, 232n controlled composition clause, 267, Murray, M., 486 280–282n MUSE (Multiple Sub-Nyquist Sampling and FASB Statement 48, 269 Encoding), 313–314n FASB Statement 50, 269 Music industry “flow of income” method, 283–284n advertising spending in, 51, 52t loan advances, 264, 280n blanket licenses, 273–274n masters, recording costs, 283–284n breakage deduction, 282n musical instrument retail sales, 284n business-model phase transitions, 247 net publisher’s share (NPS), 270, 283n CDs, introduction of, 246, 251, 272n recoupment fund, 265–266, 282n composing, publishing, managing, 252–254, royalties, advances, 264–265, 269, 280–282n 272n “360 deals,” 264, 276–277n, 281n computers in, 246, 251, 272n valuation, 269–270, 283–284n

644 Index Music industry marketing holdings, 295 costs, 260–261, 278–279n late-night programming revenues, 319n cutouts, 263 mergers & acquisitions, 296 distribution generally, 261–263 reality programs, 319n distribution structural arrangement, 261–262, revenue/star salary relationships, 236–237n 279–280n sports broadcasting by, 465–466n do-it-yourself (DIY) distribution, 261, television revenue growth, 224n 276–277n, 279n Neale, W. C., 461, 471n overstocks, 263 Negative cost, 579 payola, 260–261, 278–279n Negotiated deal, 579 pricing, 263, 280n Netflix, 60–61n, 163–164n, 168–169n rack jobbers, 262–263, 280n Netherlands, movie theatre admissions, 556t release strategies, 277–278n Net present value (NPV) trackers, 261 calculation, 31, 161n Music industry production film libraries, 102 agreements, 258–259, 276–277n Net profits (contractual), 579 costs, 260, 277–278n Network industry. See also Broadcasting overview, 258, 275–276n industry pressing and distribution agreement content costs, 44 (P&D deal), 259 distribution in, 44–45, 58n profitability, 260 financial interest restrictions on, 240n talent deals, 259–260 Law of Connectivity, 45f, 45, 58n MusicNet, 275–276n pay-per-view distribution, 158–159n Music Theatre International, 497–498n revenue/star salary relationships, My Big Fat Greek Wedding 236–238n accounting disputes, 229–231n syndication agreements in, 214t distribution agreements, 227n Nevada financials, 207t average length of stay in, 437n project acceptance/rejection, 147–148n Broadway profitability vs., 497n Mylstar, 395n casino gaming square footage by category, MySpace, 44–45 417t Myst, 399n casino industry statistics, 558t casino revenues, 412f, 434t Napster, 275–276n credit-granting procedures in, 432 Nardone, J. M., 82, 107–108n dollar volume market shares, 431f NASCAR, 465–466n gaming win in, 413t Natal, 391 history of, 410–411, 437n National Association of Concessionaires, regulation of, 422 232n revenues, 559t National Cable Television Association (NCTA), visitors, spending per visitor vs. Atlantic City, 353n 420f National Collegiate Athletic Association winnings, taxation of, 437n (NCAA), 463–464n New Jersey National General Corporation, 107n average length of stay in, 437n National income, 579 casino gaming square footage by category, National Income and Product Accounting 417t (NIPA), 11f, 9–11 casino industry statistics, 558t National Music Publishers Association, 255 casino revenues, 412f National Research Group (NRG), 159n credit-granting procedures in, 432 National Science Foundation, 59n gaming win in, 413t NBC history of, 411–412 affiliate compensation relationships, 315n junket profitability, 437n commercial availability expansion, 317n regulation of, 422–423, 440n

Index 645 visitors, spending per visitor vs. Las Vegas, The Oprah Winfrey Show, 235n 420f Optical videodisc, 163–164n winnings, taxation of, 437n Orchestras, 486 New Line Orion Pictures feature titles, 101t accounting practices, 225–226n net profit definitions, 229–231n feature film titles, 101t production, distribution activities, 80 production, distribution activities, 80 television series compensation agreements, production financing, 151n 239–240n theatrical rental market shares winners/losers, 207t Orwall, B., 61n Newman, A. D., 279n OTX (Online Testing Exchange) Research, 159n News Corporation, 79–80, 351n Output deal, 580 Newspaper industry Outstandings, 580 advertising by, 51f, 52t, 51–52, 62–63n Overage, 580 advertising revenues, 294t, 368, 375n Ovide, S., 58n financials, 361t Owen, B. M., 216, 234n, 303, 318n merchandising by, 169n Owen, D., 385 overview, 367t, 369f, 367–369, 375n Owen, J. D., 11–12, 36n profitability, 368, 369f Owensby, Earl, 155n New World Communications Group, 315n Ozanian, M. K., 464n New York Dramatists Guild, 256–257 Ozzie & Harriet, 234n New York Limited Liability Company Law, 501n Pac-Man, 389, 396n, 399–400n New York State Racing and Wagering Board, Pai Gow, 543–544 440n Palmer, S., 271n New York Yankees, 465n, 470n PAL (phase-alternation line) system, 313n Nicholson, Jack, 229–231n Pan (panguingue), 544 Nickelodeon, 58n, 351n Paramount Pictures Nielsen, 159n, 290–291, 312n in amusement park industry, 519n Nielson station index (NSI), 291, 579 as ancillary market, 109–110n Nielson television index (NTI), 291 asset transfers, 283n A Night at the Opera, 227–228n breakeven deals by, 229n Nintendo, 390, 397n exhibitions, blocking of, 161–162n Noam, E. M., 46–47 film libraries, 101t Noel, 158–159n gross participant payments, 229n Noll, R., 470–471n history of, 73 Nonborrowed reserves, 579 litigations, 223n NTSC (National Television Systems as major distributor, 79–80 Committee), 313n net profit definitions, 229–231n Nussenbaum, E., 57n as private investor, 227n NYPD Blue, 239–240n project acceptance/rejection, 115, 147–148n release strategies, 160n Objectivist approach, 41–42, 56–57n revenue estimation issues, 224–225n Oh, Calcutta!, 485t revenue splits, 159–160n OIBDA, 26, 38n sell-through by, 166n Oklahoma!, 499n VOD distribution by, 60–61n Oligopoly, 25–26, 580 winners/losers, 207t On the Waterfront, 499n Paretian optimum, 580 ON-TV, 354n Pareto laws, 144f, 142–144, 171–172n Opera, 487, 503n Parker, Fess, 218 Operating income, 580 Parkinson’s law, 84, 142 Opinion filters, 49–50 Parretti, Giancarlo, 111n Opportunity costs, 580 Partnership, 580

646 Index Pathe,´ Charles, 106n Phantom of the Opera, 485t, 499–501n Paul, Robert, 106n Picard, R. G., 318n Pay-per-view (PPV) services. See also Cable Pickwick International, 280n industry; Home video industry; Television Pierce, J. R., 57n industry Pink Floyd, 277–278n defined, 580 Piracy first-sale rights, 274–275n as legal issue, 529 history of, 331f, 329–331, 332f, 333t, 333, in music industry, 246, 272n, 275–276n 349–350n protection, 61n, 275–276n impact of, 140, 158–159n, 168–169n The Pirates of Penzance, 353n network industry distribution, 158–159n Pirates of the Caribbean,42 as revenue source, 343–344, 353n Pirates of the Caribbean: At World’s End, sports broadcasting by, 452t, 450–452, 162–163n, 228–229n 463–465n Pirates of the Caribbean: Dead Man’s Chest, Pay TV, 581 See also Cable industry 162–163n, 228–229n PBS, 300–301, 318n Pixar. See also Walt Disney Company People meters, 291, 312n common stock offering, 117, 149n Performing arts, culture as major distributor, 79–80 audience, 480f, 479–480, 481f, 482t, 483f as private investor, 227n Broadway (See Broadway) Playcable channel, 350n circuses, 486, 498n PlayStation, 390–391, 398–399n commercial theater, 484f, 480–484, 485t, 486, Plitt, 78–79 497–498n Poggi, J., 481 copyright, 499n Pohlad, Bill, 154n dance, 487 Pokeman, 395n economic dilemma, 489t, 487–490, 496–497, Poker, 542 498n, 503n Poltergeist, 119–120 economics, 495f, 494–496, 502–503n PolyGram elasticities, 495 corporate asset transfers, 279–280n funding sources, 489t, 487–490, 496–497, loan securitization use by, 152n 498n, 503n music distribution by, 261–262, 280n opera, 487, 503n winners/losers, 207t operations, 493t, 492–493, 493f, 501–502n Pommerehne, W. W., 489–490, 499n, 503n orchestras, 486 Pong, 388–389, 395–396n overview, 479, 497n Poseidon, 152–154n price discrimination, 493f, 495f, 495–496, Power law relationships, fragmentation and, 501–502n 43–44, 57n production financing, participations, 491t, Power Rangers, 395n 490–492, 498–501n Preferred Communications, 350n returns on investment, 257 Premiere, 330 valuation, 498n Presley, Elvis, 277–278n Performing Rights Society (PRS), 254 Pressplay, 275–276n Periodic-table computation method, 581 Price discrimination Perry, Tyler, 229n performing arts, 493f, 495f, 495–496, Personal-consumption expenditures (PCEs) 501–502n advertising time series and, 62n supply/demand factors, 18f, 20, 36–37n defined, 581 Price/sales ratios, 532 leisure activities, 9, 32, 37–39n Price-to-earnings (P/E) ratio movie/theater industry, 81f defined, 581 relationships, 22t, 21–22, 23–24f, 25, 37n in valuations, 64–65n, 532 technology in, 30f, 29–30, 33f, 32–34 PrimeStar, 353–354n Personal income, 581 Prime Time Access Rules, 240n Peterman, J. L., 318n PrimeTime Live, 238n

Index 647 Print, 581 FASB Statement 48, 372, 377n Prints and advertising (p&a) costs FASB Statement 50, 372 home video industry marketing, 167n FASB Statement 86, 372 movie-television financial accounting, financial operating characteristics, 363f, 184–185, 227n 361–363, 363t Private Benjamin, 147–148n history of, 360–361, 362f Private equity, hedge funds, 121–122, 152–154n, magazines (See Magazine industry) 227n merchandising by, 169n The Producers, 499–501n multimedia, 370–372, 376–377n Production-financing-distribution (PFD) newspapers (See Newspaper industry) agreements overview, 361t, 361, 373, 377n fee splits, deferments, participations, 194t, profitability, 363f, 363, 373–374n 226n returns, 374–375n financing matrix, basic, 190t, 226n textbook adoption policies, 365, 374n overview, 189–193 trade books, 366t, 365–366, 367t, 367, premium refunds, 226n 374–375n revenue flowchart, 191t, 226n valuation, 373, 377n theatrical release, revenues/costs, 192t Pulp Fiction, 147–148n Production function, 581 Putnam, D., 106–107n Production overhead, 581–582 Productivity Qualia Capital, 152–154n defined, 582 QUBE, 353n supply/demand factors, 11f, 9–11, Quigley, M., 106n 36n Quirk, J., 461, 463n, 470–471n Product splitting, 132, 161n, 222 Profitability. See also specific industries Radio, 245, 271n, 312n film industry revenue, cost trends, 143f, Radiohead, 279n 170–171n Radovich decision, 467n movies, examples of, 208t Raiders of the Lost Ark, 115, 207t overview, 142–144, 171n Raney, A., 57n Pareto laws, 144f, 171n Rank, J. Arthur, 106n production costs in, 215–217, 236–238n Rappaport, J., 470n return on investment, 171n Ray, 147–148n, 158–159n in syndication, 212–213, 214t, 234–235n, RCA 237–238n cable channel discontinuations, 350n Profit margin, 582 corporate asset transfers, 279–280n Profits, 582 history of, 245–246, 271n Psych, 237–238n optical videodisc, 163–164n Public good, 582 in video game industry, 396n Public policy. See Legal issues Rcrd Lbl, 279n Publishing industry Reach, 582 accounting practices, 372, 377n Reach and frequency, 582 advertising by, 51f, 52t, 51–52, 62–63n Reagan, Ronald, 156–157n advertising revenues, 294t Really Useful Group (RUG), 501n author royalties, 365–367, 372, Recreation, 4, 24f See also Leisure time 374n activities books, 364f, 366t, 364–366, 367t, 367, RedBox, 165n 374–375n Reds, 207t cost per thousand households (CPM), 376n, The Red Skelton Show, 234n 569 Redstone (National Amusements, Inc.), 78–79 distribution trends, 61n Reed Elsevier, 159n e-books, 375n Regal Cinemas, 78–79 educational, professional books, 364–365 Regal Entertainment Group, 78–79

648 Index Regression line, 582 controlled composition clauses, 267, Regulation D, 119, 151n 280–282n Reibstein, L., 499–501n deﬁned, 578 Relativity Media (Gun Hill Road), 152–154n, home duplication, 274n 229n music clubs, 280n Rent, 485t music industry, 245, 251, 254–259, Request Television, 353n 271n Required reserves, 583 music industry highest paid, 281n Residuals. See also Royalties Rozelle Rule, 467n Internet downloads, 156–157n Rumours, 277–278n licensing fees, 209 RuneScape, 399n movie-television, unamortized, 184, Rupert, P., 8–9, 34–35n 224n Rush Hour, 160n syndication agreements, 235n, 238–239n Russell, Steve, 395n television industry, 156–157n, 238–239n Rybczynski, W., 35n The Return of Jafar, 168n Return of the Jedi, 207t SAG-AFTRA settlement, 156–157n Returns, 583 Samuel French Inc., 497–498n Revenue Ruling 2004–58, 224n Sandomir, R., 465–466n Revolution Studios, 227n Satellite master antenna television (SMATV), Rich, M., 374–375n 345 Rights-ownership splits, 103, 204 Saturday Night Fever, 277–278n Ringling Bros. and Barnum & Bailey Saturday Night Live, 234n circus, 498n Savage, L. J., 435 Risk, 583 Scarne, J., 414 Riven, 399n Scatter market, 583 Rivlin, G., 441n Schechner, S., 58n RKO, 73, 78–79 Scholl, J., 241n Roberts, K., 8–9, 34–35n Schor, J. B., 7–8, 35n Robinson, J. P., 8–9, 35n Schwartz, D. G., 434 Rockford Files, 218, 241n Schwartz, N. D., 37n Rocky III, 119–120 Schwarzenegger, Arnold, 228–229n Rodgers & Hammerstein Theatre Library, Scorsese, Martin, 147–148n 497–498n Scott de Martinville, Edouard-L´ eon,´ 271n Rogerson, R., 7–8 Screen Actors Guild, 148–149n, 156–157n, Rolling Stones, 281n 256–257 Romeo and Juliet, 117–118 Scully, G. W., 453, 461, 469–471n Rondor, 283n SECAM (sequential color and memory) system, Rones, P.L., 8–9, 35n 313n Rooney Rule, 467n Second-best theory, 583 Roots, 210, 233n Secular trend, 583 Rosen, J., 223n Secure Digital Music Initiative (SDMI), Rosenberg, B., 499n, 501n 275–276n Roth, Joe, 227n Securities Act of 1933, 119, 151n Rothstein, M., 499n Segments of industries generally, 27f, 26–27, Rottenberg, S., 461, 471n 28f, 29t, 30f, 30, 33f Roulette, 425t, 540 Seinfeld, 216, 233–238n Rowe, J., 37n SelecTV, 354n Royalties. See also Residuals Seminole Tribe v Butterworth, 438n asset transfers, 283n Sequential distribution, 127f, 126–127, authors, publishing industry, 365–367, 372, 157–159n 374n Seussical, 499n breakage deduction, 282n Sex and the City, 235n

Index 649 Shakespeare in Love, 147–148n theatrical rental market shares Shannon, C. E., 57n VCRs, 163–164n Shannon-Hartley theorem, 355n winners/losers, 207t Share of audience, 583 Sony v Universal City Studios, 164n Sharp, C. H., 5 The Sopranos, 235n, 400n Sherman Antitrust Act of 1890, 161n, Soul Train, 235n 467n SoundExchange, 254, 273n Showtime, 109–110n, 330, 337, 350n Space Invaders, 389, 396n, 399n Shrek 2, 165n Spain Shrek the Musical, 499–501n movie theatre admissions, 556t Shy, O., 58n performance royalties in, 272n Sic Bo, 543–544 Spider-Man, 77, 141, 165n, 207t Sideways, 147–148n Spider-Man 3, 162–163n Siegel, Benjamin “Bugsy,” 410, 437n Spielberg, Steven, 229n Siklos, R., 464n SpiralFrog, 279n Silver Screen Partners, 119, 120t, 151n Splinter Cell, 399n Simon & Schuster, 374n Spore, 397n The Simpsons, 234–235n Sports Broadcasting Act of 1961, 450 The Sims, 397n Sports industry Six Flags, 519–520n accounting practices, 456–459, 463n, 60 Minutes, 234n, 238n 469–470n Skolnick, J. H., 410 admissions, 449, 450t, 470–471n Slapshot, 149n baseball, basketball, 454f, 454, 464–471n SLM Entertainment, limited partnership cartel structure, 469–470n offerings by, 150n Coase Theorem, 462 Slot machines, 441n, 541–542, 548n competitive bidding, 467–469n Slumdog Millionaire, 147–148n economics of, 459–462, 470–471n Smith, E., 7, 34n, 58n, 275–276n, 279n final offer arbitration (FOA), 467–469n Smith, Will, 227–228n football, 453–454, 464–465n, 467–469n Snelus, P., 56n free-agency status, 454–455, 466–469n Snow White, 166n future trends in, 462, 471n Society of European Stage Authors and history of, 448–449, 451f, 463n, 467–469n Composers (SESAC), 254 hockey, 465n, 467–469n Sonnenfeld, Barry, 227–228n labor issues, 456f, 455–456, 457t, 466–467n Sony/BMG media connections, 452t, 450–452, corporate asset transfers, 279–280n 463–464n Michael Jackson rights, 281n Messersmith Decision, 455, 466–467n music distribution by, 261–262, 279–280n personal consumption expenditures, 449 payola fines paid by, 278–279n player salaries, 454–456, 463–464n, royalties, advances, 282n 467–469n Sony Pictures Radovich decision, 467n clearance rights, 160n reserve system, 455, 466–467n as dominant exhibitor, 78–79 revenues, 454f, 453–455, 464–466n exhibitor settlements, 242n Rooney Rule, 467n film library utilization rates, 101t soccer, 464–465n, 469n as major distributor, 79–80 strikes, lockouts in, 467–469n in mergers/acquisitions, 107n taxation, accounting practices, 456–459, private equity/hedge fund financing of, 463n, 469–470n 152–154n time spent by adults on, 10t as private investor, 227n valuation, 449, 459, 460t, 463n, 470n real estate assets, 111n wagering and (sports book), 426, 452–453, release strategies, 160n 464n, 546–548 studio purchases by, 154–155n waiver rules, 466–467n

650 Index Spotify, 279n price discrimination, 18f, 20, 36–37n Spot TV, 583 productivity, 11f, 9–11, 36n Spring, J., 35n public good characteristics, 18f, 21f, Springsteen, Bruce, 277–278n 20–21 Squire, J. E., 147 Sweeney Todd: The Demon Barber of Fleet St. Petersburg paradox, 435 Street, 159–160n Stanley, R., 72 Syndication Starlight Express, 499n defined, 584 Star Trek, 19, 57n, 235n profitability in, 212–213, 214t, 234–235n, Star Trek: The Next Generation, 238n 237–238n Star Wars Syndication agreements budget, 154n barter, 215t, 213–215, 215–216t, 235–236n, elasticity, 19 293 exhibition of, 161–162n bicycling, 221, 239n, 565 financials, 207t deficit financing, 234n financing of, 195 distribution costs, issues, 217–218 merchandising, 141 financial interest restrictions on, 240n project acceptance/rejection, 115, 147–148n first-run, 213 return on investment, 71 licensing as alternative to, 237–238n Star Wars: Revenge of the Sith, 162–163n network television program production, Star Wars Episode I: The Phantom Menace, 214t 224n overview, 212–215 Starz Entertainment Group, 60–61n residuals, 235n, 238–239n State fairs, 519n See also Amusement park revenues, television series, 187, 234–235n industry self-dealing, 239–240n Steiner, C., 37n series, 235n Steiner, P. O., 54, 63n success, predicting, 234–235n Stelter, B., 58n, 321–322n television industry, 187, 234–235n Stern Pinball, 395n Syndication and Financial Interest Rules, Stern Stewart, 355n 240n Stewart, Jimmy, 227–228n Syzygy, 395–396n Stock options valuations, 32, 55–56, 64n Szymanski, S., 466–467n, 471n Strauss, N., 275–276n Stripping, 583 Taft Broadcasting, 519–520n Structures of industries generally, 25–26, Talent agents role, movie production, 116, 38n 148–149n Studio 60, 239–240n Tales of the Black Freighter, 168n Studios. See Movie industry production Tams-Witmark Music Library Inc., 497–498n Subscription television (STV), 345, 354n Target Substitution effect, 11–13, 36n book sales, 366–367, 374–375n Summit Entertainment, 147–148n home video/DVD sales, 168–169n Superman, 131, 141, 162–163n Taxation Super Mario Bros., 397–398n broadcasting, 320–321n Superstations, 300, 317n, 329, 583 gaming, 437n, 548n Supply, 584 legal issues in, 528, 528–529 Supply/demand factors sports, 456–459, 463n, 469–470n barriers to entry, 15–17 television, 320–321n competitive-monopolistic model, 18f, 17–19 Tax credit, 584 demographics, debt, 14t, 14–15, 16–17f, 37n Tax deduction, 584 elasticity, 19–20, 21f, 36–37n Tax Reform Act of 1969, 353n expected utility, 13, 35–36n Tax Reform Act of 1986, 119, 150–151n leisure time demands, 12f, 11–12, 12f, 13, Tax shelters, 120t, 118–120, 150–152n 36n Taylor, D. E., 34–35n

Index 651 Technology networks, affiliates, 297t, 295–297, 297f, distribution, effects on content cost, 44 314–317n in entertainment business development, 527 opportunities, 310–311, 322n extension by, 42 organization, 293f, 293 film library assets, 99, 110n power ratios, 292–293, 313n in movie ancillary market development, 95 profitability, 298–299, 304–305, 310 movie budgets and, 154n project acceptance/rejection by, 147–148n in movie development, 74–77, 107n ratings, audiences, 299f, 296–299, 317n music and, 271n ratings points, 290 in personal-consumption expenditures, 30f, reality programs, 319n 29–30, 33f, 32–34 regulation of, 293–295, 313–314n Teenage Mutant Ninja Turtles, 147–148n repurposing in, 237–238n Telecommunications Act of 1996, 321n, 346, residual payments, 156–157n, 238–239n 350n revenue sources, 98t Tele-Communications Inc., 158–159n, revenue/star salary relationships, 236–238n 353–355n sequential distribution, 157–158n Telephony, 57n series renewal revenues, 234n Telepictures, 117 series syndications, 235n Tele-TV, 354n share, 290–291 Television industry. See also Cable industry STV, 345, 354n advertising time sales basis, 292, 313n superstations, 300, 317n, 329, 583 affiliate compensation relationships, 315n sweep period advertising, 291, 312n aggregate spending, various media, 293, 294t syndication agreements, 187, 234–235n audience measurement in, 291, 312n talent agent compensation in, 148–149n barter-syndication deals, 215t, 213–215, targeted ratings points, 292, 313n 215–216t, 235–236n, 293 technology of, 288–290, 311–312n blanket licenses, 273–274n time spent by adults on, 10t cable’s impact on, 310–311 trade effects, 92–94, 109n cash breakeven deals in, 228–229n upfront sales, 298, 316–317n challenges, 310, 321–322n Television industry financials. See also cost per rating point (CPP), 292f, 292 Movie-television financial accounting cost per thousand households (CPM), 292f, accounting practices, 305–307, 319–320n 292, 569 APB Opinion 21, 306 Double Jeopardy Effect, 299, 317n broadcast cash flow, 308–309, 320–321n Duplication of Viewing Law, 299, 317n FASB Statement 63, 307, 320n DVRs, 316n highly leveraged transactions (HLTs), 321n economics (macro), 302f, 301–303, 318n leveraged buy-outs (LBOs), 309, 321n economics (micro), 303, 318n operating cash flow, 308–309, 320–321n first-run syndication, 213 taxation, 320–321n gross ratings points, 292, 313n valuations, 307t, 307–310, 320–321n, HDTV, 294, 313–314n 348t history of, 289f, 287–290, 311n variable cost elements, 305t, 304–305, 305t, homes using television, 575 318–319n independents, public stations, 300–301, Terminator 2,77 317–318n Terminator 3, 228–229n inventories, 299–300, 317n Terms, 584 late-night programming revenues, 319n Texas Instruments, 397n LPTV, 312n Theatrograph, 106n marketing, 169–170n The Completion Bond Company, 155–156n mergers & acquisitions in, 296 Theme park industry. See Amusement park movie theater admission effects, 78 industry music royalty payments, 273–274n The Movie Channel (TMC), 109–110n, 330, national spot advertising, 291, 312–313n 350n

652 Index The Weinstein Company, 80 home video games, 389–391, 397–398n Thomas, L. Jr., 352n impact of, 382 Three Men and a Baby, 151n, 229–231n Internet effects on, 61n Three’s Company, 216 inventory management, 395n Thriller, 277–278n marketing, 386, 387f Throsby, D., 494–495, 498n merchandising by, 384 Ticketmaster, 275n online games, 390–391, 397n Time buys, 584 operations, 385–386, 387f, 395n Time Inc., 329 Pac-Man, 389, 396n, 399–400n Time-Life Films, 233n pinball, 388, 395n Time series, 584 Pong, 388–389, 395–396n Time spent listening (TSL), 313n profitability, 392t, 391–392, 398–400n Time-Warner Cable as reflecting cultural values, 382 accounting practices, 352n retrieval in, 43, 57n in monthly charge disputes, 351n royalties, 392t, 392, 398–400n sports broadcasting by, 463n Space Invaders, 389, 396n, 399n subscriber base, 340t valuation, 386, 395n Time-Warner Inc. video games, 386–387 in amusement park industry, 519–520n Toy industry finanacials DBS, 353–354n inventory management, 395n distribution by, 58n overview, 383f, 382–383, 384f, 384, 385t, in magazine industry, 376n 385f, 394–395n as major distributor, 79–80 trends in, 28f, 26–28, 29t, 29 mergers & acquisitions, 296 Toy Story, 117, 141, 149n real estate assets of, 111n Trachtenberg, J. A., 374n regulation of, 355n Transamerica Corporation, 225–226n revenue estimation issues, 225n Transamerica Insurance, 155–156n TV Everywhere, 356n Transformers,42 Timmons, H., 108n Transformers: Revenge of the Fallen, 162–163n Titanic Treasure Planet, 207t financials, 207t Trend Exchange, 154n initial rejection of, 147–148n Trente-et-quarante (rouge et noir), 544–545 soundtrack, 277–278n The Trip to Bountiful, 151n technology in production of, 77 TriStar TiVo, 312n film library utilization rates, 101t TNS, 312n as major distributor, 79–80 Tomb Raider, 42, 399n in mergers/acquisitions, 107n Tonight Show, 319n project acceptance/rejection by, 147–148n Toolson v New York Yankees, 455, 466n winners/losers, 207t Top Gun, 166n Troma Inc., 155n Torkildsen, G., 34n Trumpbour, J., 73, 106n Total invested capital (TIC), 64n TV Everywhere, 356n Touchstone, 79–80 Twentieth Century Fox Town & Country, 207t deficit financing, 234n Toy industry disbursement timing lawsuits, 218 advertising by, 51f, 52t, 51–52, 62–63n film library transfers, 111n Asteroids, 396n, 399–400n film library utilization rates, 101t Atari, 389, 390f, 395–397n history of, 73 coin-op, 392–393, 400n as major distributor, 79–80 development costs, 398–399n mergers & acquisitions, 296 dominant companies in, 384f, 384 in mergers/acquistions, 99 future trends in, 393–394, 400n pay-per-view distribution, 158–159n history, 381–382, 383f project acceptance/rejection, 115, 147–148n

Index 653 release strategies, 160n in mergers/acquistions, 99 television revenue growth, 224n net profit definitions by, 241n winners/losers, 207t private equity/hedge fund financing of, Twentieth Century Pictures, 73 152–154n 24, 234–235n project acceptance/rejection by, 147–148n The Twilight Saga: New Moon, 162–163n, 166n real estate assets, 106 Twilight series, 147–148n release strategies, 160n Twitter, 44–45 revenue sharing, 165n sequential distribution, 157–158n U2, 281n theatrical rental market shares UHF (ultrahigh frequency), 584 VOD distribution by, 60–61n Uichitelle, L., 37n winners/losers, 207t Ulin, J. C., 126 Universal Music Group (UMG), 261–262, Underwriter, 584 280n Unemployment rate, 584–585 Universal Studios, 519n Unique (Website) visitors, 585 Upfront buying, 585 United Artists Utility, 585 in common stock offerings, 149n as dominant exhibitor, 78–79 Valuation. See also specific industry feature-film licensing, 210 book value, 533 film library transfers, 111n cash flow in, 26, 38n, 531, 531–532 in mergers/acquistions, 99 collections, contracts in, 102–103 purchase-method accounting applications, comparison methods, 31–32 225–226n debt/equity ratios, 532 rate agreements by, 226n discounted cash flows, 31, 65n, 571 revenues, operating income by division, 555t enterprise values, 64–65n, 532, 532–533 theatrical rental market shares interest, inflation rates in, 102 United Kingdom, loan financing laws in, 152n library transfers in, 103, 111n See also England (United Kingdom) methods generally, 30 United/Paramount (UPN), 240–241n options pricing, 32, 55–56, 64n United States price/earnings ratios, 64–65n, 532 advertising categories in, 51, 52t price/sales ratios, 532 amusement park industry (See Amusement real estate assets, 161n park industry) rights-ownership splits, 103, 204 cable’s market dominance in, 330, 331–332f utilization rates in, 101t, 101–102 demographic shifts in, 14t, 17f Vauxhall Gardens, 508 entertainment industry exports, 32, 38–39n Veblen, T., 4, 9 fuel consumption in, 37n Veriana Networks, 154n leisure time in, 6t, 5–6, 6–8f, 8t, 10t, 24f, 32, Vestron, 167n 35n VHF (very high frequency), 585 media concentration in, 46–47 Viacom movie/theater industry (See Movie industry) in ancillary market, 109–110n revenue flows, 206f, 205–207, 233n asset transfers, 283n theater exhibition dominants in, 78–79 cable revenue disputes, 351n worker production in distribution by, 58n United Talent Agency, 116 loan securitization use by, 152n Universal as major distributor, 79–80 in common stock offerings, 149n mergers & acquisitions, 296 exhibitor settlements, 242n production interests, 107n history of, 73 revenue estimation issues, 224–225n loan securitization use by, 152n talent agency purchase by, 148–149n as major distributor, 79–80 Victrola, 245 in mergers/acquisitions, 107n Videocassette recorders (VCRs), 137, 163–164n

654 Index Video on demand theatrical rental market shares distribution of, 60–61n ticket pricing issues, 131 impact of, 140, 158–159n, 168–169n VOD distribution by, 60–61n profit margins, 139, 166n winners/losers, 207t sequential distribution of, 126, 127f, Walter Reade, 78–79 157–158n War and Remembrance, 210, 233n Viewer’s Choice, 353n Warner Brothers Virgin Music, 279–280n capability vs. interest, 107n Virtual, 152–154n direct-to-video releases, 168n Vivendi Universal, 283n exhibitions, blocking of, 161–162n Vongo, 60–61n film library utilization rates, 101t von Neumann, J., 435 history of, 73 VuDu, 60–61n as major distributor, 79–80 merchandising by, 169n Wadhams, W., 282n net profit definitions, 229–231n Wagner, Todd, 154n private equity/hedge fund financing of, Walker, S., 463n 152–154n Walker, Texas Ranger, 237–238n project acceptance/rejection by, 147–148n The Wall, 277–278n real estate assets, 106, 111n Wallace, B., 109n release strategies, 160n Walls, W. D., 132, 142, 145, 170n revenue/star salary relationships, 236–237n Wal-Mart sequential distribution, 157–158n book sales, 366–367, 374–375n syndication interests ownership by, 240–241n CD sales, 279n theatrical rental market shares, home video/DVD sales, 168–169n winners/losers, 207t as toy industry dominant, 384 Warner Communications VOD distribution by, 60–61n corporate asset transfers, 279–280n Walt Disney Company in mergers/acquistions, 109–110n advertising spot sales, 131 pay-per-view offerings by, 353n amusement parks in China, 519–520n Warner Independent Pictures, 147–148n cable revenues, 351n Warner Music Group, 261–262, 279–280n capability vs. interest, 107n Warrant, 585 direct-to-video releases, 168n Wasserman, Lew, 227–228n distribution by, 58n Watch Instantly, 60–61n exhibitions, blocking of, 161–162n Waterparks, 519n See also Amusement park film libraries, 101t industry as major distributor, 79–80 Weaver, W., 57n market share factors, 86 Webber, Andrew Lloyd, 501n merchandising by, 169n Weber, B, 499–501n MovieBeam, 168–169n The Wedding Singer, 499n Pixar (See Pixar) Welles, C., 225–226n prerelease writedowns by, 223–224n Werner, R. A., 36n as private investor, 227n Wheel of Fortune, 235n real estate assets, 106 White Christmas, 277–278n release strategies, 160n Who Framed Roger Rabbit, 119–120, 151n, sell-through by, 166n 208t, 229–231n sports broadcasting by, 463n Who Wants to Be a Millionaire, 238n syndication interests ownership by, 240–241n Wicked, 499–501n syndication profitability, 235n Wildman, S. S., 216, 234n, 318n talent agency purchase by, 148–149n Wilkerson, C., 470n television revenue growth, 224n William Morris Endeavor, 116, 148–149n television series compensation agreements, Winchester ’73, 227–228n 239–240n Wind Dancer Productions, 239–240n

Index 655 Window, 585 Xbox, 390–391, 398–399n Wingﬁeld, N., 275–276n X-Files, 235n, 239–240n Witt Thomas Harris, 235n X-Men: The Last Stand, 162–163n Wolff, M., 376n Woolley, S., 311–312n, 321n Yaari, M. E., 435 Working capital, net, 585 Yankees Entertainment & Sports Network Workweek, 585–586 (YES), 351n World International Property Organization Yari, Bob, 154n (WIPO) treaties, 59n Yes Man, 228–229n World of Warcraft, 390–392, 397n, 399n Yield, 586 World’s Columbian Exposition, 509 YouTube, 50, 321n World Wide Web development, history of, 59n See also Internet Zencey, E., 37n Write-off, 586 Zillman, D., 56n Writer’s Guild, 156–157n Zimbalist, A., 456 WTBS, 317n Zukor, Adolph, 73