Managerial Accounting

Nobody is immune from the effect of declining revenues – not even movie stars. When the number of viewers of the television show “House”, a medical drama, declined by almost 20%, Fox Broadcasting said it wanted to cut the license fee that it paid to NBCUniversal by 20%. What would NBCUniversal do in response?  It might cut the size of the show’s cast, which would reduce the payroll costs associated with the show. Or, it could reduce the number of episodes that take advantage of the full cast.  Alternatively, it might threaten to quit providing the show to Fox altogether and instead present the show on its own NBS-affiliated channels.

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