Program Rights and Obligations

12 Months Ended

Dec. 31, 2021

Program Rights and Obligations

Program Rights

Effective January 1, 2020, the Company adopted FASB ASU No. 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials. The guidance impacts the Company as follows:

•Allows for the classification of acquired/licensed program rights as long-term assets. Previously, the Company reported a portion of these rights in current assets. Advances for live programming rights made prior to the live event and acquired/licensed program rights with license terms of less than one year continue to be reported in current assets.

•Aligns the capitalization of production costs for episodic television programs with the capitalization of production costs for theatrical content. Previously, theatrical content production costs could be fully capitalized while episodic television production costs were generally limited to the amount of contracted revenues.

•Introduces the concept of “predominant monetization strategy” to classify capitalized program rights for purposes of amortization and impairment as follows:

◦Individual program rights - programming value is predominantly derived from third-party revenues that are directly attributable to the specific film or television title (e.g., theatrical revenues, significant in-show advertising on the Company’s programming networks or specific content licensing revenues).

◦Group program rights - programming value is predominantly derived from third-party revenues that are not directly attributable to a specific film or television title (e.g., library of program rights for purpose of the Company’s programming networks or subscription revenue for streaming services).

The determination of the predominant monetization strategy is made at commencement of production and is based on the means by which the Company derives third-party revenues from use of the programming. The classification of program rights as individual or group only changes if there is a significant change to the title’s monetization strategy relative to its initial assessment.

Total capitalized produced and licensed content by predominant monetization strategy is as follows:


	December 31, 2021
(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total
Owned original program rights, net:
Completed	$	185,228	$	127,470	$	312,698
In-production and in-development	161,881		264,927		426,808
Total owned original program rights, net	$	347,109	$	392,397	$	739,506

Licensed program rights, net:
Licensed film and acquired series	$	—	$	627,940	$	627,940
Licensed originals	61,923		148,063		209,986
Advances and content versioning costs	57,278		107,196		164,474
Total licensed program rights, net	119,201		883,199		1,002,400
Program rights, net	$	466,310	$	1,275,596	$	1,741,906

Current portion of program rights, net					$	10,068
Program rights, net (long-term)					1,731,838
					$	1,741,906

Amortization, including write-offs, of owned and licensed program rights is as follows:


	Year Ended December 31, 2021
(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total

Owned original program rights	$	307,676	$	53,547	$	361,223
Licensed program rights	73,648		474,468		548,116
Program rights amortization	$	381,324	$	528,015	$	909,339


	Year Ended December 31, 2020
(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total

Owned original program rights	$	349,078	$	61,108	$	410,186
Licensed program rights	94,534		419,166		513,700
Program rights amortization	$	443,612	$	480,274	$	923,886

The Company estimates amortization within the next three years will be approximately 88% and 91% of unamortized owned original programming costs and unamortized licensed program costs, respectively, as of December 31, 2021. The Company expects to amortize approximately $141.3 million of unamortized owned original programming costs during the next twelve months. Program rights write-offs of $12.8 million, $108.3 million and $40.9 million were recorded for the years ended December 31, 2021, 2020 and 2019, respectively.

Program Rights Obligations

Amounts payable subsequent to December 31, 2021 related to program rights obligations included in the consolidated balance sheet are as follows:


(In thousands)
Years Ending December 31,
2022	$	307,054
2023	128,090
2024	66,008
2025	22,757
2026	911
Thereafter	555
	$	525,375

See Note 16, Commitments and Contingencies, for additional information relating to future program rights commitments.