TTWO Message Board

 

LongTerm CapGains
01/15/19.7:24.AM

News Nokia cuts 350 jobs in Finland Jan. 1...

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LongTerm CapGains
01/14/19.7:06.AM

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Jester Debunker
01/10/19.4:27.PM

News I was wondering that too. I'm very cu...

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breinejm
01/10/19.3:58.PM

News yea I just saw it. I now wonder if pa...

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Jester Debunker
01/10/19.3:22.PM

News I had written about how bullish I was...

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breinejm
01/10/19.11:50.AM

News Jester, what are you currently thinki...

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breinejm
01/10/19.11:12.AM

Off Topic Wow, CIEN looks strong this morning. ...

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LongTerm CapGains
01/09/19.7:09.AM

Off Topic Nokia has been acting quite well of l...

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Jam ok
01/08/19.2:32.PM

Off Topic OT - CIEN - Both the stock and the op...

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Jam ok
01/08/19.1:45.PM

Off Topic OT - NOK - Being conditioned to see N...

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Take Two Interactive Analyst Oversight

 

Michael Pachter
BBI NFLX ATVI TTWO

Moderated By
Perry Rod

 

Arvind Bhatia
TTWO

Moderated By
Perry Rod

 

Doug Creutz
ERTS DIS ATVI TTWO

Moderated By
Perry Rod

Take Two Interactive Media Oversight

 

Roddy Boyd
TWX TTWO NWS

Moderated By
Perry Rod

 

Mark Mitchell
MS BAC TTWO

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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