Arundel Partners TEAM 4

Similar documents
Arundel Partners: The Sequel Project

NAME: SECTION DATE. John Chalmers. Used Fall 2002

OVERVIEW OF THE MOVIE BUSINESS

Analysis of Film Revenues: Saturated and Limited Films Megan Gold

BUY Current Price: $21.28 Target Price: $24.36 Market Cap: 3.39B S&P Debt Rating B+

Why Netflix Is Still Undervalued

INTERIM RESULTS SKY NETWORK TELEVISION LIMITED INTERIM RESULTS DECEMBER 2018

City Screens fiscal 1998 MD&A and Financial Statements

UTV Software Communications Limited

Why split up Netflix?

This is a licensed product of AM Mindpower Solutions and should not be copied

That sounds expensive. How is the contribution due the FMSMF calculated? What else should I know about the FMSMF?

INVESTOR PRESENTATION. March 2016

Dick Rolfe, Chairman

An Economic Overview, Stocks vs. Bonds, and An Update on Three Stocks

Netflix Inc. (NasdaqGS:NFLX) Company Description

CINEPLEX GALAXY INCOME FUND Reports Third Quarter Results. Three months ended September 30, 2008

UTV Software Communications Limited

GOLDEN DAWN FILMS, LLC Phn:

MAGAZINE Craft director perspectives Maximizing Distribution by Peter Broderick VOL 28-5: January 2004

It is a pleasure to have been invited here today to speak to you. [Introductory words]

MACQUARIE CONFERENCE Wednesday 2 May, 2018

Discussion Materials December 10, 2012

TV Azteca in Grupo Salinas

The Role of Film Audiences as Innovators and Risk Takers

Is the takeover of Regal Entertainment a solid solution for Cineworld?

Appendix X: Release Sequencing

Neural Network Predicating Movie Box Office Performance

TV Azteca en Grupo Salinas

NETFLIX: THE FUTURE OF ENTERTAINMENT OR HOUSE OF CARDS? Aswath Damodaran

Fidelity Capital Structure Corp. Annual Dividends

UK films at the worldwide box office, 2017

Piper Jaffray Non-Deal Roadshow New York, New York

1-Year Chart: 5-Year Chart:

Sonic's Third Quarter Results Reflect Current Challenges

Robin Sullivan 03/10/2019

Residuals Informational Meeting. Los Angeles March 24, 2016

Motion Picture, Video and Television Program Production, Post-Production and Distribution Activities

Credit Suisse Global Media and Communications Convergence Conference March 8, 2011

Netflix (Stock exchange: NFLX)

TAKE-TWO INTERACTIVE INTERACTIVE SOFTWARE QUIZ

SKYCITY Entertainment Group Limited. Interim results for the six months to 31 December 2017

Gabelli & Co Exhibitor Media Conference March 17, 2011

At the end of August 1993, Sumner Redstone, Chairman of the Board of

Investor Day Thursday, May 11 th

For personal use only

DRAFT Starz Subscription Pay Television Features Output Deal

Global Invacom Group Limited. FY2014 Results Presentation 26 February 2015

Eros International Plc Corporate Presentation

MARKET OUTPERFORMERS CELERITAS INVESTMENTS

PT M Cash IPO Profile

COMMISSION OF THE EUROPEAN COMMUNITIES COMMISSION STAFF WORKING DOCUMENT. accompanying the. Proposal for a COUNCIL DIRECTIVE

CINEPLEX GALAXY INCOME FUND Reports Record First Quarter Results and Announces Distribution Increase. Three months ended March 31, 2008

Exhibit LIONSGATE Investor Presentation July 2012

The UK box office, first half year (H1) 2018

TEAM E CAMERAS: GLO-BUS STRATEGY

ASIA VIDEO CONTENT DYNAMICS

International theatrical results for UK films, 2008

RUSSIA / UKRAINE / OTHER CIS INVESTMENT OPPORTUNITY JULY 23, 2007

INVESTING for GROWTH. The Marcus Corporation. Gabelli & Company Inaugural Movie Conference March 12, 2009

DISTRIBUTION B F I R E S E A R C H A N D S T A T I S T I C S

Netflix: Amazing Growth But At A High Price

How Recording Contracts Work by Marshall Brain

Captain America : Civil War (2016)

LOW-BUDGET INDEPENDENT FEATURE FILM ASSISTANCE PROGRAM GUIDELINES FOR


31 January , , ,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000

etflix Reducing Our Rating from BUY to HOLD

The Council would like to know if you think it should provide this ongoing support to the Hawera Cinema 2 Trust.

RECENT FRANCHISE RENEWAL PEG ACCESS OUTCOMES (re HD, VOD, EPG, Funding)

2 nd Quarter 2014 Investor s Briefing Financial and Operating Results August 13, ABS-CBN Investor Presentation

Interim Results. 16 th August 2012

SYSTEMATIC STRATEGY & TURNKEY PROCESS FOR FILM FUNDING

THE FAIR MARKET VALUE

Strategic Partnership to Advance Dedicated and New Cinema Solutions

in partnership with Scenario

Professional Orchestra Player

Case No IV/M SEAGRAM / POLYGRAM. REGULATION (EEC) No 4064/89 MERGER PROCEDURE. Article 6(1)(b) NON-OPPOSITION Date: 21/09/1998

Coinstar, Inc. Analyst Day May 16, 2012

THEATRICAL DOCUMENTARY PROGRAM

VISTA GROUP 2015 AGM : Event Cinema 3, Gold Class. 24 May 2016

spackmanentertainmentgroup

BEFORE THE HOUSE ENERGY AND COMMERCE SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY THE FUTURE OF VIDEO

TECHNICOLOR: THIRD QUARTER 2015 REVENUES

Village Roadshow Limited Hong Kong May 27 th Singapore May 29 th

The Ministry of Business, Innovation and Employment and SkyCity Entertainment Group Limited

1Q 2017 Investors Briefing Financial and Operating Results May 19, 2017

THE DEALS GUIDE ASSIGN? DISSECTING THE DIGITAL DOLLAR. themmf.net/digitaldollar

Media and content industries

Actors Feature Film Agreement [Actors Feature Film Award, 1979]

2016 Cord Cutter & Cord Never Study

GLOBAL INVACOM. Q3 FY2016 Briefing & Analysis

A Boutique Streaming Platform

May 29, 2012 LONG: Coinstar (CSTR) Price; $60 Market Cap: $1.9 bil Enterprise Value $1.9 bil Average Daily Volume: 1.2 mm shares

An Evaluation of Netflix Inc. Thomas Browning. BAM OA - Strategic Management. Professor Carol Himelhoch. Siena Heights University

Colombian harvest Co - production guide 2017

THE NEED FOR LEGALITY

A. Films or segments of films over ten (10) minutes in length: SAMPLE

Entertainment One Ltd. Trading Update for the nine months ended 31 December 2014

Cineplex Inc. Reports Record First Quarter Results, Announces Dividend Increase and Amended Credit Facilities

Transcription:

Arundel Partners TEAM 4

Universal Success of Terminator 2: Judgement Day - Box Office: - Opened in 2,300 theaters across the country on the Fourth of July Weekend 1991, $52m - Superstar at the box office, earned $204.8m in US/Canada and $519.8m worldwide - Third highest growing movie of all-time behind Star Wars ($530) and E.T. ($619m) - The original Terminator grossed $38 million in the U.S. in its theatrical run, while Terminator 2 achieved a 434% increase in box office revenue - Accolades: - At the 64th Academy Awards the film won Best Makeup, Best Sound, Best Sound Editing, and Best Visual Effects - Critical Response: Gene Siskel of the Chicago Sun Times, thanks to some truly spectacular and at times mystifying special effects well as as some surprisingly solid acting this is one terrific action picture, more enjoyable than the original

Movie Industry in 1992 - Promotion of Movie based on: production, distribution, and exhibition - Major production companies in 1992: MCA Universal, Metro-Goldwyn-Mayer, Orion Pictures Corp, Paramount Pictures, Sony Pictures Entertainment, the Walt Disney Company, 20 th Century Fox, and Warner Brothers - These companies participated in the production and distribution, rarely the exhibition - These major studios accounted for 93% of revenues from US Movie Theaters

1 U.S. Theaters 5 Network TV 2 Non- U.S. Theaters 4 Premium TV 3 VHS Revenue Model

Arundel Partners Strategy - Purchase sequel rights associated with films produced by one or more major US movie studios - Wait and see approach - Innovative approach: - Purchase sequel rights during pre-production stages of films - No artistic judgements - Contract a portfolio for a specific number of films - Advanced cash payments at fixed rates would help finance initial production - Offer up front payments to studios to help fund movies - The feasibility for Arundel to make money depended on the price tag of the sequel portfolio (studies suggest $2m could get the job done)

RIDE THE SUCCESS THAT THE FILM ACCRUES SEQUELS MAKE MORE PROFIT THAN THE AVERAGE MOVIE GREATER VOLATILITY LEADS TO GREATER PROFIT INVESTING IN MULTIPLES OPPORTUNITIES CASTS A WIDER NET FOR SUCCESS OFFERS FUNDING SOLUTION FOR STUDIOS IN NEED OF CAPITAL How Arundel Partners can make their investors money?

Film Portfolios vs. Individual Films Bundles the risk into a collective pool Greater likelihood that a successful sequel is discovered Acquiring the rights to an established film is more expensive Anticipating the success of an individual film is harder to predict

Financial Conclusions Best Investment Walt Disney Company Value of Call - $7.39M Worst Investment - Twentieth Century Fox Value of Call - $1.71M

Discount Rate: 12% Analysis Assumptions Probability Rate: 50% Advantages of Approach: Per Production Company Basis Properly Accounts for Risk Disadvantages of Approach: Based on 1-Yr. of Data Does Not Incorporate Success Rate of Production Company Basis

Weighted-Average Cost of Capital Unlevered Beta Return on Market 1988 Entertainment Industry Std.

Distribution Costs Problems and Disagreements Number of Sequels to Produce Time to Exercise 3rd Party Involvement

Contractual Provisions - Initial rights to studio for production or distribution - 3 year to exercise rights - Studio keeps some rights to merchandise - Studio has first option to buy rights back - Portfolio will not buy rights to movies that do not have opportunity for sequels (Biographies & Documentaries) - Portfolio must only contain original movies - Reimbursement if an original film is abandoned

Works Cited Anspach, Dana. How Would Historical Stock Market Returns Have Impacted You? The Balance Small Business, The Balance, 23 June 2018, www.thebalance.com/stock-market-returns-by-year-2388543. Betas by Sector (US). Damodaran Online: Home Page for AswathDamodaran, New York University, Jan. 2018, pages.stern.nyu.edu/~adamodar/new_home_page/datafile/betas.html. Teichner, William A, and Charles M Williams Fellow. Arundel Partners: The Sequel Project. Harvard Publishing, 1992. Business School

Appendix DATA SOURCES, FINANCIAL INFORMATION, ETC.

Financial Data -MCA

Financial Data -Paramount

Financial Data -Sony

Financial Data -Warner Brothers

Financial Data -Twentieth Century Fox

Financial Data -Disney

Value of Call Options -By Studio