Universal Pictures, a part of
) has decided to extend its movie rights agreement with HBO (Home
Box Office) TV network
a part of
Time Warner Inc.
Since 2003, Universal Pictures has been selling its exclusive
movies rights to HBO channel in order to view their movies on the
latter's network. So, with the expiry of the contract nearing in
2015, Universal Pictures plans to further renew its agreement for
the next 10 years. However, neither of the two companies have
revealed the financial terms of the deal.
Such an early renewal of contract, especially by HBO has
stemmed from the recent deal signed between
The Walt Disney Company
) Disney Movies. To stay ahead of the race, HBO is planning for
an early renewal of contract with different movie studios.
Universal Studios or better known as Universal Pictures
released 17 movies in 2012 with a total gross collection of more
than $1.3 billion. Last year, it became the sixth largest
distributor of Hollywood movies with a market share of
Universal Pictures had a pretty decent last year. Movies like
Ted and Doctor Seuss' The Lorax garnered huge revenue for the
studio. Moreover, the company has got several movies lined up for
release in 2013. So, keeping these factors in mind, HBO is
willing to extend its contract with the studio, hence giving not
a single chance to other TV channels or video streaming companies
to strike any fresh deal with the studio.
Currently, we are maintaining our long-term Neutral
recommendation on Comcast. It has a Zacks#3 Rank, implying a
short-term (Hold) rating on the stock.
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