History
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Geneva Media has completed exhaustive research on the history of slate financing arrangements and studio co-production media spending since the early 1980's. Our conclusion is that no viable investor protection structure has ever been created or offered (click HERE for a white paper)
Loss is not a foregone conclusion when proper risk mitigation is allocated. Geneva Media can change the profit and loss ratios and guarantee break-even points on any media fund, or single purpose vehicle investment, by properly eliminating the downside risk on feature films, TV shows or PC game titles and do so by effectively recapturing 100% of all production, labor, and service costs.
Media Slates & Tentpoles Lose Value: Years in Review 2005 - Present
Loss is not a foregone conclusion when proper risk mitigation is allocated. Geneva Media can change the profit and loss ratios and guarantee break-even points on any media fund, or single purpose vehicle investment, by properly eliminating the downside risk on feature films, TV shows or PC game titles and do so by effectively recapturing 100% of all production, labor, and service costs.
Media Slates & Tentpoles Lose Value: Years in Review 2005 - Present
VIRTUAL STUDIOS: Milwaukee, WI, Stark Investments will not release data, but the box office, DVD sales, and private investors may have seen as much as $200mm in losses. Stark invested up to $537mm in single picture deals negotiated by consultant, Ryan Kavanaugh, via Ben Waisbren’s Virtual Studios, which began the fast growth period for the soon to be incorporated, Relativity Media.
GUN HILL I & II: Ryan Kavanaugh’s Gun Hill I’s saw over $600mm invested, but according to news and other sources, generated only $410 million in cash flow. Investors eventually received funds from Deutsche Bank as loans (based on studio projections of future revenue), rather than actual profits. Gun Hill's share is estimated at $124mm. The first loan, which was committed by Deutsche Bank, provided some $234mm to investors. Thus far, the total returns for Gun Hill I & II are unknown. Deutsche Bank was unable to sell much of the $1.1b it held on Gun Hill I & II’s debt. As well, due to investor pressure, Sony Studios was asked to renegotiate the terms of its deal, giving more profits to the Gun Hill I investors, in an attempt to reach break even. Until that restructuring, investors would have been lucky to make any profit on their investments, according to three people who saw the distribution statements and the studio’s ultimates. Profits --if any-- remain a mystery.
BEVERLY I & II: In the $700mm Beverly deals headed by Ryan Kavanaugh, Fortress bought out Citi's interests (the Sony/Universal co-financing slate), which were worth $226.7mm, for just $113.5mm (Citi insisted on exiting the movie deal for 50¢ on the dollar). At the same time, Fortress is alleged to have convinced Sony Pictures to end the deal (Aramid was suing), which also stopped Beverly I from continuing to fund films through 2013.
RELATIVITY: NYC Hedge fund, Elliott Associates, sells most of it’s interests in Relativity Media after disruptive management changes are undertaken to “rein in” Ryan Kavanaugh’s spending. Now billionaire, Ron Burkle, steps in and puts up hundreds of millions to purchase Elliott’s shares, and to keep Ryan’s company solvent. Attempts to become a full-fledged studio strain Relativity’s cash flow as it undertakes it’s own distribution and marketing on summer blockbuster releases in 2011 (i.e., “War of Gods” AKA “The Immortals”), and is accused in court documents of being “functionally insolvent” (according to the legal filing by Aramid Entertainment). This is surmised by the media to ahve caused billionaire, Ron Burkle, to ante up another $350mm and change to keep Relativity viable --and liquid, and still the company needs another $250mm before attempting to go public!
MELROSE I & II: It is public knowledge that Melrose Investors 2, LP had reached any true break even or had seen a penny of profit on it’s 25% share in 29 Paramount/Dreamworks films, and have sued and setttled with Paramount for additional revenues owed above their cost-of-capital on original investment amounts. The lawsuit, while in full swing, had saught to investigate all of Viacom’s corporate entities cash flow interactions --which is why the settlement may have ultimately occured.
CONTENT PARTNERS: Purchased 34 films and over 200 hours of television from studios and networks because they are “being squeezed for every penny.” Mark Cuban and Todd Wagner are pioneers in acquiring films in the secondary market from hedge funds, private equity firms and banks.
SCREEN CAPITAL PARTNERS: Another investor swooping in on slates of movie deals in Hollywood is David Molner, managing director of Beverly Hills, California-based Screen Capital International. "I'm five times as busy as I used to be. We launched a $500 million fund that is financing the acquisition of assets in studio slate deals," said Molner. "We are taking the participants in finance deals out of their capital positions in studio slate deals."
MGM STUDIOS: $500mm loan at 6.5 percent rate, to retire debt during a recent bankruptcy.
LEGENDARY PICTURES: Retired old debt (Tried to raise $800mm. Found $278mm, then lands an additional $443mm, of which $150mm is debt for a total of $571mm), and a $700mm credit facility.
WARNER BROS: Seeks $1b debt (i.e., 10 year notes/debentures) via Wall Street, to fund tentpoles.
VILLAGE ROAD SHOW: Debt financing (i.e., access to $1b through 2017), without giving investors any guarantees.
DISNEY STUDIOS: One bad film (John Carter), with a $100mm loss, creates an epic dollar drain.
NBC/UNIVERSAL: Box office bombs (Battleship), force the studio to post cash flow loss of $85mm.
DREAMWORKS ANIMATION: The Guardians forces an $87mm write off, and 300 staffers get fired.
NEW LINE: Jack The Giant Slayer faces a potential loss of $140mm according to inside sources.
SUMMER FIZZLE: Lone Ranger, White House Down, Turbo, Pacific Rim, R.I.P.D. and other films have lost.
NBC/UNIVERSAL: greenlit under Adam Fogelson’s tenure, Keanu Reeves’ 47 Ronin has lost over $150mm in both production and prints & ad costs combined according to numerous inside sources
RYAN KAVANAUGH: Coming full circle, Ryan's Relativity media files for bankruptcy.
IN SUMMARY: After the credit freeze of 2008, banks have reduced their presence in Hollywood. Some are trying to sell off their positions in slate deals for discounts of 30% to 70%. "Because of the credit crisis, banks and hedge funds have been writing down securities, including those backed by film assets, and are willing to sell them at lower prices," said Stephen Prough, founder of Salem Partners.
GUN HILL I & II: Ryan Kavanaugh’s Gun Hill I’s saw over $600mm invested, but according to news and other sources, generated only $410 million in cash flow. Investors eventually received funds from Deutsche Bank as loans (based on studio projections of future revenue), rather than actual profits. Gun Hill's share is estimated at $124mm. The first loan, which was committed by Deutsche Bank, provided some $234mm to investors. Thus far, the total returns for Gun Hill I & II are unknown. Deutsche Bank was unable to sell much of the $1.1b it held on Gun Hill I & II’s debt. As well, due to investor pressure, Sony Studios was asked to renegotiate the terms of its deal, giving more profits to the Gun Hill I investors, in an attempt to reach break even. Until that restructuring, investors would have been lucky to make any profit on their investments, according to three people who saw the distribution statements and the studio’s ultimates. Profits --if any-- remain a mystery.
BEVERLY I & II: In the $700mm Beverly deals headed by Ryan Kavanaugh, Fortress bought out Citi's interests (the Sony/Universal co-financing slate), which were worth $226.7mm, for just $113.5mm (Citi insisted on exiting the movie deal for 50¢ on the dollar). At the same time, Fortress is alleged to have convinced Sony Pictures to end the deal (Aramid was suing), which also stopped Beverly I from continuing to fund films through 2013.
RELATIVITY: NYC Hedge fund, Elliott Associates, sells most of it’s interests in Relativity Media after disruptive management changes are undertaken to “rein in” Ryan Kavanaugh’s spending. Now billionaire, Ron Burkle, steps in and puts up hundreds of millions to purchase Elliott’s shares, and to keep Ryan’s company solvent. Attempts to become a full-fledged studio strain Relativity’s cash flow as it undertakes it’s own distribution and marketing on summer blockbuster releases in 2011 (i.e., “War of Gods” AKA “The Immortals”), and is accused in court documents of being “functionally insolvent” (according to the legal filing by Aramid Entertainment). This is surmised by the media to ahve caused billionaire, Ron Burkle, to ante up another $350mm and change to keep Relativity viable --and liquid, and still the company needs another $250mm before attempting to go public!
MELROSE I & II: It is public knowledge that Melrose Investors 2, LP had reached any true break even or had seen a penny of profit on it’s 25% share in 29 Paramount/Dreamworks films, and have sued and setttled with Paramount for additional revenues owed above their cost-of-capital on original investment amounts. The lawsuit, while in full swing, had saught to investigate all of Viacom’s corporate entities cash flow interactions --which is why the settlement may have ultimately occured.
CONTENT PARTNERS: Purchased 34 films and over 200 hours of television from studios and networks because they are “being squeezed for every penny.” Mark Cuban and Todd Wagner are pioneers in acquiring films in the secondary market from hedge funds, private equity firms and banks.
SCREEN CAPITAL PARTNERS: Another investor swooping in on slates of movie deals in Hollywood is David Molner, managing director of Beverly Hills, California-based Screen Capital International. "I'm five times as busy as I used to be. We launched a $500 million fund that is financing the acquisition of assets in studio slate deals," said Molner. "We are taking the participants in finance deals out of their capital positions in studio slate deals."
MGM STUDIOS: $500mm loan at 6.5 percent rate, to retire debt during a recent bankruptcy.
LEGENDARY PICTURES: Retired old debt (Tried to raise $800mm. Found $278mm, then lands an additional $443mm, of which $150mm is debt for a total of $571mm), and a $700mm credit facility.
WARNER BROS: Seeks $1b debt (i.e., 10 year notes/debentures) via Wall Street, to fund tentpoles.
VILLAGE ROAD SHOW: Debt financing (i.e., access to $1b through 2017), without giving investors any guarantees.
DISNEY STUDIOS: One bad film (John Carter), with a $100mm loss, creates an epic dollar drain.
NBC/UNIVERSAL: Box office bombs (Battleship), force the studio to post cash flow loss of $85mm.
DREAMWORKS ANIMATION: The Guardians forces an $87mm write off, and 300 staffers get fired.
NEW LINE: Jack The Giant Slayer faces a potential loss of $140mm according to inside sources.
SUMMER FIZZLE: Lone Ranger, White House Down, Turbo, Pacific Rim, R.I.P.D. and other films have lost.
NBC/UNIVERSAL: greenlit under Adam Fogelson’s tenure, Keanu Reeves’ 47 Ronin has lost over $150mm in both production and prints & ad costs combined according to numerous inside sources
RYAN KAVANAUGH: Coming full circle, Ryan's Relativity media files for bankruptcy.
IN SUMMARY: After the credit freeze of 2008, banks have reduced their presence in Hollywood. Some are trying to sell off their positions in slate deals for discounts of 30% to 70%. "Because of the credit crisis, banks and hedge funds have been writing down securities, including those backed by film assets, and are willing to sell them at lower prices," said Stephen Prough, founder of Salem Partners.
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