Oscars Gold – Part I

The Oscars
Image credit: ABC.

As the Academy of Motion Picture Arts & Sciences begins final preparations for the 96th Academy Awardsthe Media C-Suite takes a brief look at the values, and value, of the Oscars.

Part I

And the Academy Award for Best Performing Investment goes to …

The Academy of Motion Picture Arts & Sciences, AMPAS to its accountants but just the Academy to its members, has been in the business of promoting Hollywood for nearly a century. Since 1929, it’s Academy Awards for outstanding contribution to the quality of the motion picture has been the benchmark for Hollywood glamour and celebrity.

Technically a US Non-Profit Organization, the Academy and its affiliate group drives a hugely profitable international business model based on the consumption of an increasing amount of human leisure time that results in a global Media & Entertainment industry (“M&E) with annual revenues this year expected to exceed US$2.5 trillion in according to PWC’s 2023 estimate.

To put that into context, M&E generates more than 4 times the revenues annually than the top 100 military arms manufacturers combined (cir. US$531 billion; 2020). 

If M&E were a nation, unto itself, it would rank as the 8th largest economy in the world. 

Much of M&E’s success lies in the Academy’s century of effort to promote innovation in content production technologies, increase demand for entertainment content and encourage the public’s consumption of a now pervasive celebrity culture. 

That effort has been profitable.

“the Academy has accumulated total assets valued at over US$1.3 billion.” 

Since the 1950s, the glamour of ceremony presiding over the year’s best in Box Office offerings has been largely capitalised by television audiences. Those core efforts to reinforce public appetite for the US Box Office has evolved into a global celebrity creator-culture, pervasive internationally, across film, television, music and now original content at the heart of the ongoing “Streaming Wars”.

The Academy’s membership is today a cross-section of the M&E industry, including all modes of media and content, from film to TV series, music, technology, marketing and management. After 95 years of effort, the Academy’s roughly 10,000 present members preside over a promotional organisation spending roughly US$50 million a year to support US$2.5 trillion in industry revenues. 

By any measure, that is a great investment. 

In the process, the Academy itself has amassed considerable value in its own right.

But just how much is the Academy worth?

According to PwC’s audit of the Academy of Motion Picture Arts & Sciences’ consolidated financial statements to June 30th, 2023 and 2022, the Academy has accumulated total assets valued at over US$1.3 billion. 

In the lead up to this year’s annual Academy Awards, let’s take a look at three key numbers behind the Oscars.

US$143.5 million

The Academy’s annual awards revenues reached US$143.46 million in 2023 up significantly from 2022’s US$137.1 million and 2011’s US$84.2 million. The cost?  US$56.87 million in 2023, including salaries and benefits, with a net profit of US$86.68 million for the 95th Academy Awards.

With last year’s ratings of 18.7 million Americans standing at a fraction of what they were ten years ago (40.38 million American viewers in 2013, according to Nielsen), a multi-year domestic television licensing deal with ABC, plus international licensing of the event to Buena Vista, provides significant protection against declining viewership through to the Oscar’s 100th anniversary in 2028.

US$856.7 million

The value of the Academy’s total net assets rose by US$67.53 million above 2020’s US$789.2 million.

That’s due in large part to investing nearly all of its annual revenues with no distributions and no tax. The value of its investment portfolio has more than tripled in the last decade

Holding a diversified investment portfolio, the Academy’s investments into equities and alternatives, including managed funds, reached US$690.1 million in 2023, up from US$635.3 million in 2020 and significantly higher than the US$163.2 million in 2011.

US$545.5 million

The Academy’s total property value declined from US$589.8 million in 2021 to US$545.5 million in 2023 with its primary property being the Academy Museum.

Nearly a decade in the works, the Academy Museum of Motion Pictures, near Beverly Hills, opened its doors in September, 2021 with construction costs nearing US$535.5 million as of June 2021. 

The museum earned nearly US$18 million in revenues from ticket sales, retail sales, sponsorships and event rentals in 2023, down from US$23.7 million in 2022.

Designed by Renzo Piano, the Pritzker Prize winning architect, this 300,000 sq.ft. glass highlighted landmark is intended to be a global destination for the film aficionado and for the next generation of film-makers. 

With over 13 million objects within several curated collections, the Academy Museum is expected to offer both wonder, nostalgia and an education on the development of motion pictures from silent film to tomorrow’s virtual experience.

What Next for Oscar?

The stated purpose of the Academy, being to promote outstanding contributions to the quality of the motion picture, as not changed in nearly a century. 

Live viewership over linear television and convergence between theatrical and streaming distribution may force changes in the presentation of the Academy Awards over the coming years. But the Academy’s financial resources, and its growing international reach, provide more than enough capability and capacity to continue its mission to support the Media & Entertainment industry, if not exclusively through the Box Office.

So long as story-tellers merge art and science into motion pictures to entertain ever growing audiences, on whatever screen they choose, it’s a safe bet that Oscar will be there to reward them. 

In Part II of the Oscars Gold series, we’ll take a look at how the Academy has amassed its considerable resources and in Part III, we’ll speculate as to why.

Editor’s Note: This is an update to an article previously-published on December 4, 2022.

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