TTWO Message Board

 

LongTerm CapGains
Today.at.5:53.AM.CST

Off Topic I should also point out that the doll...

2

 

LongTerm CapGains
12/02/20.1:40.PM

Off Topic Treasury Yields are soaring, should b...

2

 

breinejm
12/01/20.12:16.PM

Off Topic awesome, thanks for the thoughts!

2

 

LongTerm CapGains
12/01/20.5:37.AM

Off Topic   The restaurant stocks (and old...

2

 

breinejm
11/30/20.10:13.AM

Off Topic Why CAKE? I do not follow them, but p...

2

 

LongTerm CapGains
11/25/20.7:50.AM

Off Topic I bought back BABA (not as a big a po...

2

 

LongTerm CapGains
11/25/20.7:47.AM

Off Topic I too am sorry I sold NIO, it and XPE...

2

 

breinejm
11/24/20.8:39.AM

Off Topic Thanks for sharing. I am interested i...

2

 

breinejm
11/24/20.8:37.AM

Off Topic I have done more DD since your origin...

2

 

Jam ok
11/19/20.1:36.PM

Off Topic <p>CIEN - Announced today that ...

3

Take Two Interactive Analyst Oversight

 

Michael Pachter
ATVI TTWO BBY GME

Moderated By
Perry Rod

 

Doug Creutz
ATVI TTWO DWA ERTS

Moderated By
Perry Rod

 

Arvind Bhatia
TTWO

Moderated By
Perry Rod

Take Two Interactive Media Oversight

 

Roddy Boyd
TTWO NWS TWX

Moderated By
Perry Rod

 

Mark Mitchell
BAC TTWO MS

Moderated By
Perry Rod

 

Bethany McLean
TTWO

Moderated By
Market Rap

Take Two Interactive Executive Oversight

 

Strauss Zelnick
TTWO

Moderated By
Market Rap

Take Two Interactive Featured Analysis

 

Are Executives At Rockstar Getting Half The Profits At Take Two Interactive?

by Perry Rod, Published: December 16th, 2013 12:45 PM CST

In 2008, after the successful launch of their hit title, Grand Theft Auto 4, Take-Two (TTWO) Interactive's (TTWO) CEO Strauss Zelnick said that they had secured an employment agreement with key Rockstar talent. The deal was an incentive program "primarily based on a profit sharing arrangement." At the time, there were reports that CEO Robert Kotick of Activision was trying to get Rockstar's talent to jump ship. The Rockstar executives also took Zelnick's side against Electronic Arts' (ERTS) attempted takeover. So what did it cost Zelnick and Take Two to make these deals?

The answer appears to be now hidden in Take Two's most recent balance sheet. Accounts Payable rose by 262 million sequentially. Accrued Expenses rose by 100 million sequentially. These are unusually large numbers that at first can easily go unnoticed among the larger highlights: most prominently, 1.15 billion in deferred revenue and 302 million in deferred cost of goods sold from Grand Theft Auto 5, and an overall 975 million increase in Accounts Receivable.

But the real question investors should ask is how much is Rockstar making in the "profit sharing agreement". Here is one way to figure it out:

Take Two's Non-GAAP net revenues were 1.289 billion. Yet it's Non-GAAP gross profit was only 497 million. The gross profit was only 38%? Where did 792 million go? Where are the details of these Non-GAAP expenses? Well, because they are Non-GAAP, they are not disclosed. We know that 1.15 billion of that 1.289 billion total revenue (89%) is from one title: Grand Theft Auto 5. We know that 302 million of that 1.15 billion (26%) is cost…

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Market Rap's All Time Top TTWO Pickers

  Rank Return Last Action Trades Name Pic
 

1

30.4%

Buy`TTWO`@`12.98

1

Dan Toma

 

2

7.9%

Buy`TTWO`

7

Perry Rod

 

3

0%

Sell`TTWO`

2

breinejm

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