Film Academy Financials Reflect A Rocky Fiscal Year

Investment income crashed, awards expense rose, museum operating costs kicked in: All in all, the Academy of Motion Picture Arts and Sciences has had a rocky time of it, according to its just-released financial report for the fiscal year ended June 30, 2022.

As the dust settled, net assets fell to $844.5 million from $893.8 million at the beginning of the year, a decrease of $49.4 million, after having risen by $104.6 million in 2021. Revenue fell to $170.3 million, from $201.7 the earlier year. But the big hit came from the investment portfolio, which saw a $47.3 million loss, after having posted a gain of $73.4 million in fiscal 2021.

Academy officials are expected to assure members that the investment loss, which reflected a downturn in financial markets, actually marked a much smaller decline than the general drop in bond and equity markets during the year. Officials are expected to point out that the previous two years have seen a $26 million gain–perhaps a better gauge of performance than is the one-year drop in a down market.

The investment decline came even as operating expenses for the Academy Museum kicked in. After opening in the fall of 2021, the museum, in the nine months through June 30, recorded $23.7 million in revenue, and $93.5 million in expenses. The large gap between income and expense partly reflects one-time costs that were recorded with the opening of the museum last September, and museum expense in the future is expected to be lower, according to people briefed on the numbers.

Some relief to the bottom line came with the release of restrictions on some $117.6 million in donor funds as the museum opened.

Oscar-related revenue for the year rose to $137.1 million from $117.7 million, reflecting a return to full payment for domestic television rights from ABC as the show moved back to the Dolby Theatre last year, after operating on a reduced scale at Union Station in Los Angeles a year earlier. At the same time, awards-related expense rose to $56.8 million from $42.9 million a year earlier.

In a related filing with the Electronic Municipal Market Access system, which provides information to bondholders, the Academy disclosed that it has exercised its right to terminate its agreement to hold its annual awards ceremony in the Dolby in 2028, rather than continuing through 2032, as originally contemplated. The shorter term brings the Dolby agreement in line with the expiration of the Academy's domestic television contract in 2028, and a still-being-negotiated agreement with Disney for future foreign television rights, which is also expected to have a 2028 end date, putting all three contracts on the same time table.