"Who Will the Next Fool Be?"
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?
I think of it as the dinner party factor. It’s so much more interesting to be able to talk about the film you just financed than it is to talk about the expansion of your infrastructure fund. Well, maybe not more interesting, but of more interest to non-financial people. Plus these guys might get to meet [insert star du jour] at the premiere, or even at Cannes/Sundance/Berlin yada yada.
It’s odd. But so long as they keep lining up, there’ll be someone to take their money.
I think of it as the dinner party factor. It’s so much more interesting to be able to talk about the film you just financed than it is to talk about the expansion of your infrastructure fund. Well, maybe not more interesting, but of more interest to non-financial people. Plus these guys might get to meet [insert star du jour] at the premiere, or even at Cannes/Sundance/Berlin yada yada.
It’s odd. But so long as they keep lining up, there’ll be someone to take their money.
In addition to the ego factor, there are other factors that can bring in the piece-of-the-action investors: for some it’s a tax shelter guaranteed to make a controlled business loss, a few use inflated production budgets as a money laundry that can process large amounts of cash, and then there have always been those who get caught up in the high stakes casino aspects. Blockbuster’s shelves wouldn’t be lined with so much dreck if it wasn’t for the marks.
In addition to the ego factor, there are other factors that can bring in the piece-of-the-action investors: for some it’s a tax shelter guaranteed to make a controlled business loss, a few use inflated production budgets as a money laundry that can process large amounts of cash, and then there have always been those who get caught up in the high stakes casino aspects. Blockbuster’s shelves wouldn’t be lined with so much dreck if it wasn’t for the marks.
Thats the point. The market could handle three new movies a weekend , instead it gets 8 new movies a weekend because of all your well named “marks”.
Thats the point. The market could handle three new movies a weekend , instead it gets 8 new movies a weekend because of all your well named “marks”.
Movie money is ego money. It’s all about gold chains and getting laid and thinking that you’re creative.
Sony buying Columbia was all about the back catalog of both movies and music recordings. That way they could change formats…LP to Cassette to CD to DVDs; Beta to VHS to DVD to Blue Ray…and sell the hardware necessary to play the stuff. ‘nother few years, and you’ll see yet another new format with another batch of machines on which to play the stuff.
Where’s the next John Hammond? Well, T-Bone is pretty good at it… Of course I’m talking music here.
When did a major studio last put out a great film? Last good one I saw was “The Fall”…an imperfect work that is still compelling and visually amazing…and was financed mostly by the director, Tarsem Singh. Just saw the Indiana Jones disaster, and it some of it looked like the trailer I saw for “Jackass”. Ford phoned in his part, and the whole thing looked too expensive for them to have had much fun making it.
Movie money is ego money. It’s all about gold chains and getting laid and thinking that you’re creative.
Sony buying Columbia was all about the back catalog of both movies and music recordings. That way they could change formats…LP to Cassette to CD to DVDs; Beta to VHS to DVD to Blue Ray…and sell the hardware necessary to play the stuff. ‘nother few years, and you’ll see yet another new format with another batch of machines on which to play the stuff.
Where’s the next John Hammond? Well, T-Bone is pretty good at it… Of course I’m talking music here.
When did a major studio last put out a great film? Last good one I saw was “The Fall”…an imperfect work that is still compelling and visually amazing…and was financed mostly by the director, Tarsem Singh. Just saw the Indiana Jones disaster, and it some of it looked like the trailer I saw for “Jackass”. Ford phoned in his part, and the whole thing looked too expensive for them to have had much fun making it.
Lead the lambs to slaughter.
Lead the lambs to slaughter.
Remember also the famous MGM goes Italy story: http://www.sgrm.com/art43.htm
Remember also the famous MGM goes Italy story: http://www.sgrm.com/art43.htm