Program Rights and Obligations

12 Months Ended

Dec. 31, 2022

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 program 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, 2022
(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total
Owned original program rights, net:
Completed	$	215,496	$	322,248	$	537,744
In-production and in-development	45,098		294,086		339,184
Total owned original program rights, net	$	260,594	$	616,334	$	876,928

Licensed program rights, net:
Licensed film and acquired series	$	3,092	$	642,768	$	645,860
Licensed originals	5,373		171,418		176,791
Advances and content versioning costs	—		74,167		74,167
Total licensed program rights, net	8,465		888,353		896,818
Program rights, net	$	269,059	$	1,504,687	$	1,773,746

Current portion of program rights, net					$	10,807
Program rights, net (long-term)					1,762,939
					$	1,773,746


	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	$	7,005	$	620,935	$	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	126,206		876,194		1,002,400
Program rights, net	$	473,315	$	1,268,591	$	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, 2022
(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total

Included in Technical and operating:
Owned original program rights	$	279,910	$	182,695	$	462,605
Licensed program rights	37,935		507,930		545,865
	$	317,845	$	690,625	$	1,008,470
Included in Restructuring and other related charges:
Owned original program rights	$	192,749	$	24,914	$	217,663
Licensed program rights	110,830		75,261		186,091
	$	303,579	$	100,175	$	403,754


	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

The following table presents the expected amortization over each of the next three years of completed program rights on the consolidated balance sheet as of December 31, 2022:


(In thousands)	2023		2024		2025
Owned original program rights:
Predominantly Monetized Individually	$	88,280	$	56,156	$	36,587
Predominantly Monetized as a Group	149,888		90,913		53,964

Licensed program rights:
Predominantly Monetized Individually	$	4,483	$	2,279	$	1,493
Predominantly Monetized as a Group	395,510		257,667		130,785

There was $403.8 million of program write-offs recorded to restructuring and other related charges in connection with the Company’s strategic programming assessments. Refer to Note 5 to the consolidated financial statements for additional information. Program rights write-offs of $12.8 million and $108.3 million were included in technical and operating expense for the years ended December 31, 2021 and 2020, respectively.

Program Rights Obligations

Amounts payable subsequent to December 31, 2022 related to program rights obligations included in the consolidated balance sheet are as follows:


(In thousands)
Years Ending December 31,
2023	$	374,115
2024	128,115
2025	49,921
2026	13,058
2027	5,790
Thereafter	3,985
	$	574,984