Warner Bros. Losing Money Like Mad

May 1. 2009

Hollywood’s DVD sales are significantly down. It was the one source of steady income for the studios. Now comes word Warner Bros. lost a fortune in financing, when a subsidiary failed to come up with the money. This cancels out profits from Warner Bros. films like "Dark Knight" forcing them to absorb film costs. Current Hollywood trouble has forced film studios to make less films.

Time Warner forced to absorb film costs

Time Warner has been forced to absorb the cost of four films released in 2008 by its Warner Brothers subsidiary after one of the studio’s key financing partners failed to contribute its 50 per cent share. Village Roadshow Pictures, an Australian group that has financed dozens of films with Warner Bros, including the Matrix trilogy, was unable to provide the funding as scheduled, which Time Warner said was about $120m.

The group’s failure to secure the financing illustrates the difficulties facing Hollywood studios, which are being forced to carry more of their production costs on their balance sheets. With DVD sales, Hollywood’s most important revenue stream, in steep decline and third party capital scarce, several companies – including Time Warner and Paramount, which is part of Viacom, have cut the number of films they release…

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