TV-Series Renewal and Divestiture Assessment

Scenario

You are advising the CEO on whether to renew a 2-year contract for two series:

• Series A: The Analyst
• Series B: Shark Bank

Assume you have access to per-year revenue and cost data for each series (e.g., ad, licensing, streaming revenue; production, marketing, and overhead costs).

Tasks

1. Qualitative and quantitative factors: What would you assess before renewing a new 2-year contract for each show?
2. Profit calculation: Using the cost–revenue data, compute each show’s total 2-year profit.
3. Profit improvement: Propose data-driven actions to increase the profitability of The Analyst.
4. Sale due diligence: If the company is considering selling The Analyst, what additional information would you request before deciding?
5. Keep-vs-sell economics: Assume over the next 2 years:
   • The Analyst’s incremental profit = $0
   • Shark Bank’s profit = $22M
   • Selling The Analyst loses 1.5M viewers worth $32 each a) What is the minimum sale price that makes the company indifferent to selling The Analyst? b) Another studio offers$ 60M for The Analyst. Based on your analysis, recommend whether to sell and explain.

Hints

• Estimate cash flows, lost-viewer value, opportunity costs, and compare NPV across keep-versus-sell scenarios.