TTWO Message Board

 

LongTerm CapGains
08/26/22.7:59.AM

Rumors CNBC squashed this.  David Faber...

2

 

LongTerm CapGains
08/26/22.6:32.AM

Rumors Rumor: Amazon buying Electronic Arts?...

2

 

LongTerm CapGains
08/17/22.8:46.AM

Off Topic Musk is at it again, tweeting that he...

2

 

LongTerm CapGains
08/08/22.9:40.AM

Off Topic Agree, that seems to be the most like...

2

 

breinejm
07/15/22.9:19.AM

Off Topic Probably will settle the case. He ove...

2

 

LongTerm CapGains
07/13/22.7:01.PM

Off Topic I have long admired Musk's intellect,...

2

 

LongTerm CapGains
01/31/22.2:49.PM

News Technology and media giant Sony(SONY...

2

 

breinejm
01/20/22.9:13.AM

News   Activision CEO stands to reap ...

2

 

breinejm
01/19/22.9:19.AM

News He holds ~$324 million worth of ATVI ...

2

 

LongTerm CapGains
01/18/22.2:10.PM

News Bobby Kotick is not in the Forbes lis...

2

Take Two Interactive Analyst Oversight

 

Michael Pachter
TTWO BBY GME ERTS

Moderated By
Perry Rod

 

Doug Creutz
TTWO DWA ERTS DIS

Moderated By
Perry Rod

 

Arvind Bhatia
TTWO

Moderated By
Perry Rod

Take Two Interactive Media Oversight

 

Roddy Boyd
NWS TWX TTWO

Moderated By
Perry Rod

 

Mark Mitchell
TTWO MS BAC

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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