Arundel Partners Case Analysis Executive Summary: A group of investors (Arundel group) is looking into the idea of purchasing the sequel rights associated with films produced by one or more major movie studios. Movie rights are to be purchased prior to films being made. Arundel wants to come up with a decision to either purchase all the sequel rights for a studio's entire production during a specified period of time or purchase a specified number of major films. Arundel's profitability is dependent upon the price it pays for a portfolio of sequel rights. Our analysis of Arundel's proposal includes a net present value calculation of each movie production company. In order to decide whether Arundel can make money buying movie sequel rights depends on whether the net present value of the production company's movies is higher than the estimated 2M per film required to purchase the rights. Problem Identification: How are the principals of Arundel Partners planning to make money by buying rights to sequels? They would be interested in purchasing the sequel rights for one or more studios¡¦ entire production over an extended period of not less than a year. If a particular film was a hit, and Arundel thought a sequel would be profitable, it would exercise its rights by producing the sequel. Alternatively, they can sell the rights to the highest bidder. Inevitably, the performance of the original films would not justify sequels, and for them the sequel rights would simply not be exercised. For most movies it becomes quite clear after their first few weeks in theaters whether a sequel would be economical or not, based upon each film's box office performance. Why do the partners want to buy a portfolio of right... ... middle of paper ... ...oposed to buy. As can be seen in exhibit to solution 2, we have estimated the per-film value of each production company. MCA Universal, Warner Brothers and Walt Disney Co are the only production companies that provide a positive per film value, with values of 9.89, 1.92, 12.56 million respectively. This value is calculated by dividing the net present value of all the movies by the total number of movies. We also calculated the average value of each production company based upon their share of the total number of movies produced. The companies with positive values were MCA Universal, Warner Brothers and Walt Disney Co is also the only production companies that provide a positive per film value, with values of 1.40, 0.37, 1.40 million respectively. These values are based on the average value per film multiplied by the company's average share of the industry.
Loblaw's Shoppers Drug Mart bid escalates grocery war as well as the new competitor Amazon and Walmart. The purpose of the competition is increasing market shares. Loblaw to boost its presence in metropolitan areas and reply to increasing need for smaller stores that provide a wide range of merchandise and are easily accessible in densely populated metropolitan locations. The almost 100-year-old Loblaw chain is great at offering one-stop shopping in large-format stores.
Wolford General Partnership (WGP) operates plumbing supply business which is also an exclusive supplier for certain stable construction firms. Because of its excellent reputations and services, WGP is able to an extremely profitable entity for the business. WGP uses an accrual method of accounting and has been using June 30 fiscal year for the tax report purpose after its election of §444 since its formation.
Movies today are extremely expensive to make and are typically financed through either film studio contracts or from investors willing to take a risk. In order to be successful, movies need to be marketed and distributed either under contract by the film studios or by companies that specialize in such services. The aspects of financing, marketing and distribution of films have changed between the studio and independent systems over the years as the evolution of the film industry took place.
If upper management cannot promote the roll out of new movies or TV shows on their own time, then he or she might decide to decline the position for another firm that does not limit the venues to advertise feature productions. Another hindrance Disney can face when, onboarding senior executives, are not allowed to create partnerships or agency between parties under this agreement outlined in the miscellaneous section (“Non-Disclosure, Non-Circumvention And Non-Competition Agreement,” n.d.). If top level employees are not permitted to forge relationships outside of the Disney family, then the candidate can change their mind and seek employment elsewhere that does not put constraints on them because of the employer’s name and reputation. Even though Disney take liberties to ensure sensitive data is protected, there are benefits and consequences for the high-potentials signing confidential
Paramount, one of the big five Hollywood studio corporations, controlled the most amount of theatres in the United States during the 1930s and 40s. This meant they had an advantage when the economy in the US turned around after the great depression. This being said, many more factors come into play when defining to what extent the studio is a typical representation of a major Hollywood studio corporation in the 1930s and 40s. In this essay I will be going in depth into what extent Paramount is a representation of other key studios in Hollywood in the 1930s and 40s. I will be discussing how Paramount’s methods as a corporation such as exhibition, distribution, star system and genre to see how it is a typical representative of a Hollywood studio corporation. I will be using material such as Richard B. Jewel’s The Golden Age of Cinema, Hollywood 1929 – 1945 to go into detail in explaining my points.
In assessing Du Pont’s capital structure after the Conoco merger that significantly increased the company’s debt to equity ratio, an analyst must look at all benefits and drawbacks of a high debt ratio. The main reason why Du Pont ended up with a high debt to equity ratio after acquiring Conoco was due to the timing and price at which they bought Conoco. Du Pont ended up buying the firm at its peak, just before coal and oil prices started to fall and at a time when economic recession hurt the chemical industry of Du Pont. The additional response from analysts and Du Pont stockholders also forced Du Pont to think twice about their new expansion. The thought of bringing the debt ratio back to 25% was brought on by the fact that the company saw that high levels of capital spending were vital to the success of the firm and that high debt levels may put them at higher risk for defaulting.
Behind every product manufactured there are parts, fasteners, gloves, welds, holes that are drilled, and maybe a headache or two. These are all products that are sold and manufactured by the companies W.W. Grainger and Fastenal Company. Both of these companies are in the top ten in revenue for the industrial supply industry and I just so happen to work at one of them, that being Fastenal Co.
We employed the internal rate of return analysis to evaluate the each alternative. If taking the Goldman’s swap solution, Disney’s borrowing cost would be 7.004% in Yen (9.979% in dollar). If adopting the 10-year term loan, the total effective cost would be 7.748% in Yen (10.694% in dollar). Furthermore, by these data we also determined the total expected future revenue under different assumption of the growth rate and found it could cover all the future interest expense in the following ten years
The Studio System Key point about the studio system could be: Despite being one of the biggest industries in the United States, indeed the World, the internal workings of the 'dream factory' that is Hollywood is little understood outside the business. The Hollywood Studio System: A History is the first book to describe and analyse the complete development, classic operation, and reinvention of the global corporate entities which produce and distribute most of the films we watch. Starting in 1920, Adolph Zukor, head of Paramount Pictures, over the decade of the 1920s helped to fashion Hollywood into a vertically integrated system, a set of economic innovations which was firmly in place by 1930.
(1) Michel G. Rukstad, David Collis; The Walt Disney Company: The Entertainment King; Harvard Business School; 9-701-035; Rev. January 5, 2009
Burberry today is considered one of the leading luxury brands of the word. Here is a synopsis of rise of Burberry:
When Blockbuster finally realized they needed to modernize operations and change with an ever developing industry they were unable to because of their enormous debt and negative cash flow. Senior management failed to see how advances in technology would lead to changes in how consumers rent and purchase movies. During Blockbuster’s prime they squandered their earnings on bonuses and lavish meetings. Their arrogance led them to feel invincible and that no one could ever catch them. Blockbuster management, in the end, failed to see the need to evolve to meet their customer’s needs while other companies rushed to fill this void.
Don Simpson and Jerry Bruckheimer are arguably the most successful producing team in Hollywood history. Their films including “Beverly Hills Cop,” “The Rock,” “Armageddon,” and “Top Gun” have earned, according to a 1995 statistic from Entertainment Weekly, about $820 million. When one factors in the grosses for the last five or six films produced by Simpson and Bruckheimer (and Bruckheimer after Simpson’s death in 1996) the total will most likely exceed $2 billion.
Some examples of this include Samuel Goldwyn belonging to MGM, Fine Line belonging to Time-Warner, and October belonging to Universal. While not all consumers viewing a film may not at first make the connection that a company such as October belongs to Universal, the major studio influence is at play. Major studios also acknowledge that there is a market appeal to producing independent films. Often times the audiences for these films are more mature, older adults than the demographics many summer blockbuster films are marketed towards (How Indies Can Survive and Even Thrive in a Blockbuster World.). This more mature demographic is valuable for the studios to acknowledge since they tend to have more disposable income than the younger audiences and by generating content that is more palatable for this more mature demographic, the studios continue to expand their market
Through the ratio analysis, we can conclude that Disney is a stable company, keeping up with industry trends and up to par with industry averages. Although at times it can seem that Disney is a risky and unstable company, those conclusions are false since the unstableness has come through decisions which will better establish Disney’s position on the market. Although Disney’s competition, namely CBS, is on a similar standing as Disney when comparing ratios, Disney will manage to remain the largest media conglomerate in the USA and one of the best corporations in the world.