Time Warner Inc., the parent company of Burbank-based Warner Bros., announced Wednesday it earned $627 million in 2009, up from a loss of $16 billion the year prior, as the company planned increased film investment that could generate more jobs in the region.
Revenues for Warner Bros. declined by 3% in 2009, to $11 billion, but its operating income grew 21%, to $1.5 billion, which the company credited to lower print and advertising costs and reduced overhead.
The Burbank media giant, which specialized in film and television, set a worldwide box office revenue record in 2009, pulling in more than $4 billion with the popularity of “Harry Potter and the Half-Blood Prince,” “Sherlock Holmes,” “The Blind Side” and “The Hangover.”
It also posted strong gains in the fourth quarter, when revenues rose 7% compared with a year ago.
The strong fourth-quarter financial report came a day after 20th Century Fox parent company News Corp. announced its operating income for its most recent fiscal quarter was triple what it was a year ago, pushed up significantly by the success of “Avatar,” which has now generated more box-office revenue than any film in history.
Gains from two major motion picture and television studios with major operations in the Los Angeles area could eventually translate into boosts in employment figures if the companies expand, experts said.
The progress was likely a product of leaner studio staffs and executives’ attention to trimming budgets, said Bruce Ackerman, president and chief executive of the Valley Economic Alliance.
“The cuts that they’ve made are helping them stabilize and helping them to put out the same, if not bigger productions with a little less labor,” Ackerman said. “So its just made them a lot leaner and meaner.”
Time Warner executives stressed they would continue to critically monitor expenses and cutting costs while increasing investments in the company’s core brands and projects.
They expected to increase productions for television, in part because of NBC’s decision to change its late-night lineup, which will offer more opportunities for Warner Bros. to produce scripted dramas, Jeff Bewkes, chairman and chief executive of Time Warner, said in a conference call with investors.
“Demand for high-quality scripted programming seems to be going up and that is right in Warner TV’s sweet spot,” Bewkes said.
Warner Bros. will also look for potential film projects out of the deep catalog of comics from its DC Entertainment division, which it has already been leveraging for films like “The Dark Knight,” executives said.
“We are now going to outline an even more expansive program for that in the coming months,” Bewkes said.
That could mean more jobs for entertainment industry workers, which play a large role in generating economic activity in Glendale and Burbank.
Although many recent productions have gone out of state, an increase in overall projects would likely be a benefit to the area, experts said.
And some studios have already begun increasing demand for new material, said Jack Kyser, chief economist at the Los Angeles County Economic Development Corporation.
“They have been on a pilot buying spree,” Kyser said of area studios. “They have been placing a lot of orders with various suppliers.”
Warner Bros. could be one of those suppliers and as it plans on increasing production with a positive outlook for revenues, that could mean more jobs in the region down the line, Ackerman said.
“That’s going to be the last thing that happens,” he said. “They’ll crank up production as much as they can with the current labor force that and once they see it holding and once they see the economy turning they’ll start to hire again.”