The movie business reminds me of that old Charlie Rich Tune, “Who will the next fool be?”. The news that a unit of one of India’s largest Conglomerate, Reliance, is contemplating starting a new Dreamworks 2 in what the Times article hints could be horrible terms. OMG! When will the world of finance finally learn? Two kinds of people make money in the movie business:Top Talent and Distribution. Everybody else, including off balance sheet finance, get screwed. First it was Wall Street (Steve Ross Era up to about 1982). Since then it has been British and German Tax Shelters, French (Canal Plus & Warner) TV partners, Japanese and Korean equity,Australian Equity (Village Road Show), Tech Moguls (Paul Allen), Hedge funds (recently badly burned & very under reported). Everyone of them thought they were the coolest kid on the block. But they all quickly retreated from the business.Hollywood is off bounds for most Arab investors, unless they had gone secular like Dodi Fayed of London and Princess Di fame. So all that’s left is the Indians and The Chinese .
Who will the next fool be?