Spielberg's Biggest Blockbuster May Be $1 Billion Payday From Comcast

LOS ANGELES (TheStreet) -- Steven Spielberg's latest productions may be enjoying a banner summer, but the Oscar-winning director's biggest success could come from advising theme parks. 

He's raking in the profits for his work as executive producer on Jurassic World, and the television shows, Under the Dome and Extant. But those rewards pale in comparison to the $535 million paycheck -- and possibly much more -- that Comcast (CMCSA) will have to cut Spielberg in 2017, according to filings with the Securities and Exchange Commission.  

Although Spielberg was long expected to get a financial windfall from his work on theme parks, this stands to be a payday unlike anything Hollywood has ever seen.

The director of films such as Jaws and Schindler's List, Spielberg earns tens of millions of dollars a year for consulting for Comcast's Universal Studios' theme parks in Florida, Japan and Singapore. But in 2017, Spielberg, 68, can trigger a clause in his contract with Comcast that requires that the owner of NBCUniversal pay him a lump sum for the "fair market value of (his) interest in the revenue streams" of those parks rather than in quarterly payments.

Two people with knowledge of the contract say the total amount of that one-lump payment could go as high as $1 billion.

"Any such payment will only be finally determinable once the Consultant makes an election and the payment becomes due," according to the filing. "These payments may be higher or lower than the range provided and any such deviation could be material."

In 2010, the one-time payment was calculated at $160 million to $290 million for the park in Orlando and $135 million to $245 for the one in Osaka, Japan. It didn't include the Universal theme park in Singapore that Comcast operates for licensee Genting Group.

The calculations are based on a formula that includes an "applicable growth rate" for the parks that one knowledgable person says doesn't reflect the huge tick upward in attendance that both the Orlando and Japanese parks have enjoyed in recent years thanks to new attractions like the The Wizarding World of Harry Potter. Universal Studios Florida attendance has jumped 39% since 2010 and the Japanese park by 44%, according to the Themed Entertainment Association.

The filing indicates that the number could go upward, saying the calculations only "fix the values of certain, but not all, inputs into the aforementioned formula to establish a minimum amount for the one-time payment."

The Universal Studios Hollywood theme park in Los Angeles isn't covered under the Spielberg deal. A NBC Universal spokeswoman and spokesman for Spielberg had no comment. 

Even without the potential of a big payout, Spielberg has been raking in consulting fees from Universal theme parks since first signing the agreement in 1987 on the heels of his blockbuster film E.T. The Extraterrestrial. Spielberg has consulted on Hollywood-themed rides including those based on his films E.T. and Jaws as well as Back to the Future, for which he served as executive producer.  

The agreement also gives Universal the right to use Spielberg's name on press releases and advertising,  and in Singapore he appears on video for a special effects show "Lights Camera, Action! Hosted by Steven Spielberg.

The director collected $30.2 million for his consulting work in 2010, the last year for which figures are available, according to SEC filings.

In 2009, Spielberg agreed to restructure his deal to help the parks' owners restructure their debt, with the moviemaker agreeing to delay from 2010 to 2017 the date on which he could trigger his "put." 

NBC Universal agreed to guarantee payments under Spielberg's contract in 2009. Comcast bought a 50% stake in the joint venture that owned the parks when it acquired majority control of NBC Universal in 2011, and then bought out private equity firm Blackstone  (BX) for the remainder later that year for $1.025 billion.

Comcast's purchase of those theme parks gave it possession of the intergalactic battle thrills of the 3D Transformers ride and a roller coaster trip past the demons conjured up by Universal's movie The Mummy.

It also gives the company the thrill of signing an out-of-this-world check for one of Hollywood's most creative minds.

This article is commentary by an independent contributor. At the time of publication, the author held a long position in CMCSA.

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