Contingent Consideration

6 Months Ended

Jun. 30, 2017

Business Combinations [Abstract]

Contingent Consideration

Contingent Consideration

In connection with certain of the Company’s acquisitions, contingent consideration is payable in cash or common stock of the Company upon the achievement of certain performance measures over future periods. The Company recorded the acquisition date fair value of the contingent consideration liability as additional purchase price. As discussed in Note 10, the process for determining the fair value of the contingent consideration liability consists of reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to each acquisition as well as the Company’s historical experience with similar arrangements. Subsequent to the acquisition date, the Company estimates the fair value of the contingent consideration liability each reporting period and any adjustments made to the fair value are recorded in the Company’s results of operations. If an acquisition reaches the required performance measures within the reporting period, the fair value of the contingent consideration liability is increased to 100%, the maximum potential payment, and reclassified to due to seller.

On June 30, 2017, the EYELEVEL acquisition reached the required performance measures at the end of its earnout period and the balance of the fair value of the contingent consideration liability was reclassified to due to seller. At June 30, 2017, the Company reduced the contingent liability to $0.0 million and recorded $17.8 million in Due to Seller related to these arrangements. During the three months ended June 30, 2017 and 2016, the Company recorded expense of $1.9 million and $7.3 million, respectively. During the six months ended June 30, 2017 and 2016 the Company recorded expense of $0.8 million and $9.2 million, respectively. The change in the fair value of the contingent liability is driven by the final adjustment of the DB Studios liability during the first quarter of 2017 and the final adjustment of the EYELEVEL liability during the second quarter of 2017.