Acquisition

6 Months Ended

Jun. 30, 2020

ACQUISITION

On April 3, 2020, we acquired a 49% interest in Miramax, a global film and television studio, for $375 million, which included a cash payment at closing of approximately $150 million along with a commitment to invest $45 million annually over the next five years, or $225 million, to be used for new film and television productions and working capital. In conjunction with this acquisition, we entered into commercial agreements with Miramax under which we have exclusive, long-term distribution rights to Miramax’s catalog, adding more than 700 titles to our existing library. We also have certain rights to co-produce, co-finance and/or distribute new film and television projects. The investment is accounted for as a consolidated variable interest entity (“VIE”). We are the primary beneficiary of the VIE due to our power to direct the distribution of Miramax’s films and television series, which is considered the most significant activity of the VIE.

The following table summarizes our estimated allocation of the purchase price as of the acquisition date.



Assets
Cash	$	32
Accounts receivable and other current assets	19
Programming inventory	536
Goodwill	99
Intangible assets	12
Other assets (noncurrent)	7
Assets acquired	$	705

Liabilities
Accounts payable and accrued expenses	$	13
Participants’ share and royalties payable (current)	16
Deferred revenues	10
Participants’ share and royalties payable (noncurrent)	20
Debt	105
Other liabilities (noncurrent)	28
Liabilities assumed	192
Noncontrolling interests	363
Total purchase price	$	150

The goodwill, which is not deductible for tax purposes, reflects the expected Company-specific synergies arising from the acquisition and is included in the Filmed Entertainment segment. Intangible assets consist of a trade name with a useful life of 10 years.

The operating results of Miramax from the date of acquisition through June 30, 2020 were not material.