Tuesday, February 23, 2010

Hollywood for Sale -- But What's the Right Price?

It’s a sign of the times, and it may as well be a big “For Sale” sign.

With three major entertainment properties openly on the block, and another independent studio quietly made available for sale, Hollywood -- once the sexiest of high-priced baubles -- faces a glut of supply and a dearth of demand.

-- MGM needs to be sold or faces bankruptcy sooner rather than later; the studio’s production has been virtually halted as financiers seek to sort out its debt-laden balance sheet.

-- Disney has put Miramax up for sale, seeking $700 million -- with buyers so far balking at that price tag.

-- Liberty Media’s John Malone has hired an investment bank to sell or dismantle Starz Media and its main division, Overture Films.

-- Summit Entertainment -- while seeking acquisitions itself -- has been quietly shopped for several months, according to several knowledgeable individuals.
The company denied that it is for sale when questioned by TheWrap.

A decade or two ago, corporate giants as disparate as Coca-Cola, Matsushita and Vivendi vied to own a glittering piece of the entertainment business.

How things have changed.
Profit margins are tight, the future looks uncertain and -- visibly -- times are tough all over.

But there is another dynamic at work.

As the industry continues to consolidate -- with NBC Universal bought by Comcast, and Marvel bought up by Disney -- the number of cash-rich customers cruising the boulevard seems to dwindle with every passing month.

If you question experts in Hollywood and financiers on Wall Street, the conclusion seems to be that there is a significant disconnect between buyers and sellers.

Sellers seem to believe they can command premium prices for entertainment properties at a time of severe dislocation in the industry’s business models.

The buyers no longer believe that libraries are worth their asking prices.

Once upon a time it was clear that libraries were the key to any studio’s success.
That steady stream of revenue from a deep well of movies sustained the major studios through patches of bad movie slates.

That was the reason that independent studios even as successful as DreamWorks - which sold to Parmaount, then had trouble getting new backing to leave Paramount -- eventually were cash-strapped.
The capital-intensive business of moviemaking could not be sustained with a library of just 60 films.

But now, as the haggling over Miramax shows, “Libraries are worth less now than people think,” as one analyst told me on Wednesday.
“This makes valuations more and more difficult.”

“Without the old business model, all these production machines are sputtering,” said Harold Vogel of Vogel Capital Management.

As DVD sales and rentals have declined, and as new-media revenue streams have yet to prove themselves, libraries are becoming less valuable.

"At the right price, there are people that would look at these things,” said Tom Wolzien, of Wolzien LLC, a consultant to movie companies.
“But at the moment there’s a huge discrepancy between what sellers want and what people are willing to pay.”
declined to say what he thought Miramax, or MGM, might really be worth.

Vogel, the veteran entertainment industry analyst, said the current standoff is rooted in problems that have been brewing for more than a decade.

“The giants have libraries to provide cash flows when movies miss, and smaller studios bump up against this all the time,” he said.
“Overture hit the wall early.”

Entertainment companies are limited in their scalability, since they are limited to releases 52 weekends a year.
And capital constraint are built in – movies cost a lot of money to produce, and to market.

“Ten years ago people assumed that content was king, and that libraries would go up in value,” said Vogel.
“But it turns out that attention is king, not content.”

So who will want to buy these studios?

The answer comes back consistently that it depends on the price.

What is clear is that the frivolous shopper, whether that’s Jean-Pierre Messier, or a German tax fund backing the likes of Elie Samaha, has put away his wallet.

What remains are real strategic partners who have both the cash flow and the vision to connect their dots with the remaining robust businesses in Hollywood. (By which I mean, those businesses that remain will likely be robust.

Said Vogel: “They’ll cherry-pick the libraries, and the prices will be much lower than you might expect.”

That kind of partner would be Comcast.
It might be Studio Canal, the French media giant.
Or Big Reliance Entertainment, the Indian conglomerate.

There are fewer of these than before.
Which means the deals will be harder won.
The profit analysis will have to be more airtight.

Because nobody in Hollywood wants a fire sale.

Friday, February 19, 2010

sade adu...............................new album NO 1 !!!!!!!!!!!!!!!!!!!

CHRYSANTHI DAFLA ..................................

LBN-Music Insider:
***Sade's first album in 10 years, "Solider of Love" will top the Billboard 200 next week.
According to Nielsen SoundScan, Solider of Love sold total of 502,000.

***Britain's National Trust may intervene to protect the Abbey Road studios
where the Beatles recorded most of their hits.

The possibility that the studios might fall into private hands and be demolished has sparked a national outcry spurred by former Beatle Paul McCartney and prominent disk jockey Chris Evans

***The word she did not exist in the English language until 1000 AD.
***There are more than ten billion web pages on the internet.
***If California were a country, it would be the worlds fifth largest economy.
***There are more than 10,000 varieties of tomatoes.
***There are about a billion bicycles in the world, twice as many as motorcars.

"I married the first man I ever kissed.
When I tell this to my children, they just about throw up."
-Barbara Bush.

Friday, February 5, 2010

Sammy Davis says......................

When you lose a lover it's like getting a bad haircut.
It grows back in time.

***Australian rock band Men at Work had a massive hit with their 1980s song "Down Under" about a vegemite sandwich and the worlds other temptations.
It turns out they had some help as an Australian judge ruled Thursday that the group's famous flute riff was ripped off from a folk tune.
The owner of the song, the entertainment group EMI, may have to pay up to 60 percent of the earnings they made from the international smash.
"It's a big win for the underdog," said one lawyer.

***The private equity firm Star Avenue Capital - a partnership between CAA and Irving Place Capital - is buying a majority stake in J Brand, a denim apparel brand whose jeans are popular among the celeb crowd.
The agency thus becomes an equity owner in the blue jeans company making this, to Fleming's recollection, the first time a talent agency has held a stake in a consumer apparel brand.

"The world of politics is always twenty years behind the world of thought."
- John Jay Chapman.

Monday, February 1, 2010

"if you have an ounce of common sense and one good friend.........you don't need an anal...............


The reason for this is that the Grammys are fundamentally unlike film awards shows, where small, critically acclaimed films frequently dominate.
Rather, they' re a mutual masturbation society for a dying breed of A&R men, an opportunity to give out year-end bonuses in an industry that cant afford them and is ineligible for a government bailout.


If you have an ounce of common sense and
one good friend ,
you don't need an analyst.

***France has the highest per capita consumption of cheese.
***Dalmations are born without spots.
***Mens shirts have buttons on the right side; womens shirts have buttons on the left.
***Dutch are the tallest average people.
***An olive tree can live up to 1500 years.

"Whenever you see a successful business, someone made a courageous decision." - Peter Drucker.

On Jan. 30, 1948, Indian political and spiritual leader Mahatma Gandhi was murdered by a Hindu extremist.