Wednesday, October 14, 2015
A possible explanation
One complaint I've often seen about Buzzr is the constant rerunning of a handful of episodes. People seem to think that with 40,000 or so eps on Fremantle's shelf, Buzzr should offer a much greater variety of episodes. On the board formerly known as his, Matt Ottinger voiced the criticism. I wish I understood why they're constantly rerunning a relatively small number of episodes -- I really think there's something we don't know at work there. But this far in, I was really hoping for more, even from a tiny operation like this.
Having worked in corporate finance for longer than I care to recall, there may be a pretty simple reason: internal accounting. Like every other Fremantle subsidiary, Buzzr has a profit-loss statement. I'm sure Fremantle anticipated some startup costs, but shareholders don't want any sinkholes gobbling up corporate dollars. Which could be better spent on, say, shareholder dividends.
So Fremantle's bean counters have to estimate what Buzzr would pay for leasing game shows in an "arm's length transaction." Since Buzzr is no doubt bringing in very little (if any) ad revenue right now, the finance folks see hardly any dollars to offset those arm's length costs. So Buzzr only gets a small number of eps.
I can't say for sure that this guess is accurate. But I suspect that the green eyeshade crowd doesn't want Buzzr to look insanely unprofitable on an arm's length basis.