Paramount Strikes a Deal with Leonardo DiCaprio’s Appian Way



Paramount’s deal with Appian Way

Paramount Studios produces movies, but in 2015, it didn’t have many films in its pipeline. Viacom (VIAB) intends to remedy that. It plans to have 15 movies in the pipeline in fiscal 2016.

An indication of that came on April 3, 2016, when the New York Post reported that Viacom’s Paramount had struck a deal with actor Leonardo DiCaprio’s production company Appian Way. The three-year deal would give Paramount the first look at Appian Way’s projects, including the four currently underway such as The Devil in the White City and Sandcastle Empire.

According to the New York Post report, in 2015, Paramount had a 5.9% share at the US box office and trailed behind other studios including Time Warner’s (TWX) Warner Bros., Sony (SNE) Studios, and Comcast’s (CMCSA) Universal Pictures.

Early this year, Viacom stated that it was willing to sell a minority stake in Paramount. According to a Wall Street Journal report from early last month, Viacom said that many companies had indicated interest in the minority stake, including “some Asian interests.”

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Filmed Entertainment in fiscal 1Q16

As the above chart shows, Viacom’s Filmed Entertainment had revenues of $612 million in fiscal 1Q16, a fall of 15% year-over-year.

Paramount Television produces original programming for television and SVoD (subscription video on demand) platforms such as Netflix (NFLX). The company expects to generate long-term value from Paramount Television.

Netflix accounts for 0.83% of the PowerShares QQQ Trust, Series 1 ETF (QQQ). If you’re interested in exposure to the television sector, note that QQQ has 4.8% exposure to the sector.


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