Oscar®-Winning, Industry Track Record Proven Team Finances and Produces 12 Hollywood Movies
1. Market
- Status: Even in times of recession the film industry market has proven to be solid:
Increase in box office revenues 2006 - 2010 (+25%)
Source: Box Office Mojo; in Billion US$
- Demand: Continuously increasing demand for studio quality commercial films. The demand is based on the rapid growth of licensing venues, including cinemas, TV channels, internet streaming services, video-on-demand services, etc.
- Challenges: At the same time produced films decreased due to the reduction of available film financing and major studios focused mostly on films with budgets exceeding $100 million (Franchise and high budgeted films).
Films released 2006 – 2010
Sources: Rentrak Corporation, MPAA
- Conclusion & Opportunities: The current vacuum presents an excellent opportunity to successfully produce and distribute commercial viable major-studio-quality films in medium budget ranges in the current and future market place. The company will invest in a minimum of 12 movies to ensure proper risk diversification.
2. Investment Project, Investment Volume and ROI-Assumptions
A. Investment Project
- Six films for production and financing, six films for revenue and asset backed lending (senior debt loans)
- Commercial genres only: Comedy, Action, Adventure, Drama, Thriller
- Budgets from € 6 - 30 million (incl. P&A)
- Productions scheduled in 2012 – 2013
B. Investment Volume and ROI-Assumptions
- The investment volume of € 146 million for production and marketing (P&A) allows for a production volume of € 167
million
- ROI-Assumption: min. 10% per year (for a time period of 3 years)
- Acquisition of share certificates
3. Chances and Risk-Mitigating Factors for Investors
A. Unique Financing Concept
- 70% of the production costs secured by contractual collateral assets (including 35% pre-sales, 25% tax credits, 10% in-kind services)
- Anticipated cost coverage min. 125% through revenues from unsold foreign and US-license rights
- Significantly lower production costs in comparison to a major studio production without reducing the quality of films. Distribution/ Marketing: economizing 50% of the costs in comparison to observed major studios distribution and marketing cost
- Reduced compensation for A-Level actors and team in exchange for back end profit sharing in film revenues
- Investors are in first revenue recoupment position until 120% of the investment is repaid. Further revenues will be equally split between investor (50%) and creative team (50%) (co-producers, director, cast)
- Production company/ investors hold the ownership of copyrights and ancillary rights
- Profit assessment is largely independent of the film's box office performance
- Completion Bond will secure production and delivery of the film according to script, production schedule and production costs
- Risk diversification though funding a minimum of 12 films and through combination of two financing models:
a) Fully financing six films and holding equity ownership.
b) Senior debt lender on six films, cash flowing contracts and providing a small GAP against unsold territories (no ownership)
B. Further criteria for green-lighting a project
- Scripts correspond to commercial genre
- Each script and cast is chosen in discussion with international sales partners and distributors/ license-buyers
- One-stop-shop concept: production, packaging, financing, sales/distribution under one roof
- All productions in English language
- Transparency of cost and revenue: neutral collection agents shall pay back-end profit sharing to all parties involved (investors, producers, actors, directors) according to collection agency management agreement (CAMA)
- All marketing and ancillary rights available for worldwide exploitation
4. Management and Team
A. Board of Directors
- One Managing Director is producer of over 45 television and film projects exceeding $200 million in production volume. Internationally recognized specialist in risk minimization for film and television financing.
- The other Managing Director is producer, director, and writer working for ARD, ZDF, WDR, RTL, VOX, Kabel1. He has produced over 45 television programs with a production volume exceeding $ 85 Million.
B. Team
- Oscar®-winning team in front as well as behind the camera, over 25 years of industry experience. Placed over 50 films in the worldwide TV and theatrical market, production vol. exceeding $650 million.
- The team consist of entertainment bankers, film finance experts, multiple Academy Award®winners, Academy Award® nominated directors and investment advisors
- Capital procurement: eagleTRUSTcapital
C. Track Record
- Collectively the team has delivered over 200 film and TV projects distributed worldwide with a production volume exceeding $350 Million
- For over 25 years the financing team has invested in multi-business financial transactions exceeding $750 Million in investments
- The company produced 3 feature films since its founding of the production department in late 2009
D. Location Advantages
Cologne, Germany
- Excellent conditions for international co-productions
- European producers have access to additional financial advantages in Germany and Europe (such as non-recoupable subsidies)
Beverly Hills, USA
- Direct access to high quality commercial scripts
- Excellent conditions for development and production due to established relationships with renowned agents, commercial writers, worldwide well-known actors, successful producers and Award-winning directors.
5. Exit Strategies and Timing
A. Exit Strategies
- Selling of the company and/or selling of its film library
- Selling of lending portfolio to banks and investment firms
- IPO (Initial Public Offering) in Germany
B. Timing
- Identifying of projects (scripts/packaging) 4th quarter 2011
- Raising capital 1st quarter 2012 by eagleTRUSTcapital
- Production and financing of planned films 2012 and 2013
- 2012 Movies A, B
- 2013 Movies C, D
- 2014 Movies E, F
- Capital recoupment 9–18 months after delivery of films to distributors.
Please contact our consultants at eagleTRUSTcapital to receive further information.
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