I know there are different facets of a same company that sell to each other and each company has to pay the other part for shows (for example, FXX bought Family Guy rights for 20th TV...a division within their company) and Disney Plus acquired rights from Disney Studios, but aren't companies basically giving money to themselves when they do this?
-
Get involved.
We want your input!
Apply for Membership and join the conversations about everything related to broadcasting.
After we receive your registration, a moderator will review it. After your registration is approved, you will be permitted to post.
If you use a disposable or false email address, your registration will be rejected.
After your membership is approved, please take a minute to tell us a little bit about yourself.
https://www.radiodiscussions.com/forums/introduce-yourself.1088/
Thanks in advance and have fun!
RadioDiscussions Administrators
Licensing question
- Thread starter tall_guy1
- Start date
So what if they are? This kind of thing happens all the time in business.
For example, Kroger runs a manufacturing operation. How do you think they account for the Kroger brand potato salad or donuts or corn flakes they manufacture?
Spoiler: They charge the stores for it.
It is not stores they own.
The easy way to explain this is that big companies are made up of smaller companies that each have their own financial structure and their own CEOs whose bonuses are based on the amount of money their divisions make. So the best way to account for money is to charge the other division for the product, even though it ultimately feeds the same beast. If Disney was just Walt himself, he'd be moving money from one pocket to another. But it's much bigger than that, and there are other people involved.
There is the opportunity to "shift" profits from one division to another. Which can affect bonuses for division management or might make the profit statement more appealing to wall street investors.
Yes the manufacturing operation gets sent to a contract food processing companies and charging the stores is the franchise fee.
I'm familiar with this given that I had an assignment where we had to change labels in the middle of the manufacturing process because they had to comply with the contract that certain companies want their names on the label.
I think I heard Kathleen Finch (will be replaced by Channing Dungey) is in charge of the linear channels of WBD minus HBO and CNN. Is her division different than that of Max and other things overseen by Zaslav?
No.
David Zaslav is CEO of Warner Bros.-Discovery. Below him are several division CEOs, who all report to Zaslav:
- Pam Abdy and Mike DeLuca, co-CEOs of WB Motion Pictures
- Casey Bloys, CEO of HBO and Max
- Channing Dungey, CEO of WB Television
- Kathleen Finch, CEO of WB-Discovery US Networks
- Mark Thompson, CEO of CNN Worldwide
- Luis Silberwasser, CEO of Turner Sports
Among several others who I didn't copy down.
Kroger directly operates around 40 manufacturing facilities for its store brands. I was specifically NOT talking about outsourcing to third party manufacturers.
It isn't a franchise fee, either. Kroger does not do franchising. All Kroger, Harris-Teeter, and Fred Meyer (among other brands) stores are owned and operated by the company. It's just a price at which the stores buy things from the manufacturing division.
Yes, it is stores they own. As I told Y2K above, all Kroger stores are company stores, and Kroger brand products are only sold in Kroger stores.
Obviously, individual divisions of a company are supposed to contribute to the total profits. The only way to analyze this is to operate separate divisions as independent companies.
For example, if a supermarket chain also has divisions that provide products to the stores, there may be a dairy division, a canned good division, an H&BA division, and so on. To establish the consumer price for each product, the division that provides it sets a price at which to "sell" it to the retail division and retail then decides on the market added for the consumer price.
If that is not done, how would such operations know how to price goods and whether doing "in house" produced brands was a good and profitable thing to do?
For example, if a supermarket chain also has divisions that provide products to the stores, there may be a dairy division, a canned good division, an H&BA division, and so on. To establish the consumer price for each product, the division that provides it sets a price at which to "sell" it to the retail division and retail then decides on the market added for the consumer price.
If that is not done, how would such operations know how to price goods and whether doing "in house" produced brands was a good and profitable thing to do?
I knew that, but he oversees it all. But how interconnected are those divisions? Do they operate as separate companies each?
I always wonder something similar when I see Disney toys, movies and theme parks and all subsidiaries being advertised on ABC. I argue that it's free advertising for the Disney company, basically saying "hey, consumer...you're watching one of our products, but we're going to sell you unrelated products on that product and not exactly disclose to the average consumer that this is a co-owned product." My wife says it's not exactly "free" advertising because Disney is losing money that could be used by any other advertiser and since they didn't sell the spot to another advertiser, they "have" to put one of their products or promos there to fill the spot.
Way back, when RCA advertised on wholly-owned NBC, it placed the advertising through its ad agency. Whether it got a discount for advertising on its own network, I know not.
When Tribune Company, owner of WGN Radio and TV, bought the Cubs, it became the owner and broadcast rightsholder. As I understand it, WGN paid the Cubs a figure close to the market price it would have gotten had it not owned the team. That said, when the Cubs decided to sell some TV rights to then-Fox Sports Net, team CEO Andy MacPhail was thrilled. "New money," he told me, and suddenly the Cubs had money to buy a couple of name players (whose names I forget).
When Tribune Company, owner of WGN Radio and TV, bought the Cubs, it became the owner and broadcast rightsholder. As I understand it, WGN paid the Cubs a figure close to the market price it would have gotten had it not owned the team. That said, when the Cubs decided to sell some TV rights to then-Fox Sports Net, team CEO Andy MacPhail was thrilled. "New money," he told me, and suddenly the Cubs had money to buy a couple of name players (whose names I forget).
Could they ever blockout the NBC channels claiming they are asking too much.
- Status