Chapter 329

Donald raised his eyebrows and said with a smile, "this is normal, isn't it?"

Mark said, "I can tell you as a person. You'll regret getting married early."

Donald said strangely, "do you have any disharmony with Giselle?"

Mark said, "no! We're fine. You're full of expectations before you get married. After you get married, you'll find that it's not your ideal, and there's no ideal freedom." he felt that he came home on time every night after he got married, and he had to deal with various lovers, scheming, fighting and seizing interests, which was very tired.

Donald gently shook the red wine in the crystal goblet, appreciated the bright red rippling in the glass wall, and said, "ten years of hoarding amber mountain."

Mark said, "you know, I have no requirements for wine. Giselle chose it."

Donald said: "California wine consumers are relatively young, usually novices in their twenties and thirties. They don't care much about brands and are willing to try new world wines. Of course, many older senior collectors also have cellared California wine collections, but I still like southern France, and the formation of habits is difficult to change." He meant something.

Mark said: "in the past, I often heard people talk about the" strong "characteristics of California wine. This word means that California wine generally has strong fruit aroma, so the taste is more mellow. Giselle and I like this, so we have a cellar."

Donald smiled, "do you want to teach me wine tasting?"

Mark smiled at himself, raised his red wine glass, touched it, and said with a smile, "I think too much. You will choose the right one." after a pause, Mark said, "what do you think of kavarlaug of relativity investment company's investment in 30 films of MM group in the next two years?"

Since mid-2003, it has become a major trend for investment institutions to launch film funds to make overall investment in film projects of a major Hollywood studio for a certain period of time.

Film is a high investment and high-risk industry, and financing is its basic link. The amount of investment and how to allocate it can decisively affect a film. The reason why Hollywood films can continuously produce blockbusters and succeed in the global market is inseparable from the strong capital support behind them. In the past century, the gold of Wall Street Various cooperative relationships have been developed between financing Ben and Hollywood studios, and the patchwork investment of Hollywood film fund is a popular cooperation model in recent years.

After the 1980s, all major Hollywood studios have been closed to larger media and entertainment groups, and the globalization trend of Hollywood film industry has become increasingly obvious. It is a "high concept" characterized by "large investment, large production, large marketing and large market" Films have become the mainstream of Hollywood. According to the report of the American Film Association, in 1975, the average production cost of American films was $5 million (large-scale production). By 1987, this figure reached 20 million. This year, the average production cost of large Studios has risen to $60 million, the marketing cost has also reached $36 million, and the total cost has exceeded $100 million.

With such a large investment scale, even the self owned funds of major Hollywood studios are difficult to realize large-scale production every year. Although their parent companies are strong, they are unwilling to invest too much money in film production with huge risks. Moreover, as listed companies, they do not want too many debt records on their company statements, so they introduce external investors to become The inevitable choice of Hollywood studios.

However, for a long time in the 1980s and 1990s, Hollywood did not feel much financing pressure, because with the rise of new film distribution channels such as videotape, cable TV, satellite TV and European local TV, Hollywood films can raise most of the funds through pre-sale copyright.

The preferential tax policies provided by foreign governments to promote the development of the film industry also provide a lot of convenience for Hollywood's financing, especially the preferential tax policies in Germany, which stipulates that investment in the film industry can obtain tax relief, and does not require film projects to produce or hire local creators, and the amount of tax reduction can also be retained, which is a tax loophole Quickly used by German investors and Hollywood, American studios can sell the copyright of the film to a German company, and then "lease" the film back at a price about 10% lower than the selling price. Both sides can benefit from tax incentives.

However, after the new century, the overseas pre-sale market began to decline. In the 1990s, Hollywood film projects could obtain up to 80% of the budget through overseas pre-sale, but by 2002, they could only obtain 50% or less. Coupled with the filling of tax loopholes in Germany and other places, Hollywood began to encounter some difficulties in financing and urgently needed new sources of funds.

At this time, because the stock market is depressed and the bank interest rate is very low, Wall Street has abundant funds, and even some super private equity funds with a fund-raising scale of more than 10 billion US dollars have appeared. Wall Street's financial capital urgently needs to seek new profit points. Hollywood, with stable market performance, has entered their sight. They found that the market of Hollywood films is good, and in one year In the ten years from 1990 to 2000, the box office in the United States increased by 52%, and the foreign market also experienced explosive growth. Moreover, with the development of technology, Hollywood films have a wide range of sources of income and can have a considerable return on investment.

In addition, an analysis method based on probability and statistical theory, Monte Carlo simulation method, began to be believed and widely adopted by investment institutions. They found that the portfolio theory applicable in the stock market can also be used in the film industry. When the number of film projects invested reaches 20 to 25, the volatility of investment income is relatively small. Therefore, Wall Street capital's "portfolio investment" in Hollywood films came into being.

As early as 2003, under the leadership of Isaac Palmer, Paramount's vice president of business operations, Merrill Lynch reached a cooperation with paramount to establish a private fund called Melrose, which plans to invest 18% of paramount's planned films in 2003 and 2004 (including World War and spy 2).

Paramount Pictures first took 10% of the box office as the distribution fee, and then distributed the rest with investors. This three-year fund successfully raised 240 million US dollars and invested in 25 paramount films, with the investment share finally reaching 12%. Paramount's trump card for attracting investors is that, according to the data of Merrill Lynch, The internal rate of return sought by general hedge funds is between 12% - 18%, and even in the year of poor performance, Paramount's internal rate of return has reached 15%. If it is the year of titanic or Forrest Gump, the internal rate of return can be as high as 23% - 28%, which is undoubtedly attractive to investors.

Last year, young Wall Street investor Ryan cavallaug established relativity management company, which is committed to providing a channel for Wall Street funds to enter Hollywood. He constructed a set of models to predict the market success probability of the film based on factors such as film director, starring, type and release date. They plan to, Relativity management raised more than US $2.5 billion to invest in the portfolio investment projects of major studios such as Warner, Sonny and universal, which pushed the portfolio investment in Hollywood to a climax. According to Pengbo information, in 2006 and 2007, various funds and major investment banks on Wall Street, including Merrill Lynch Lehman Brothers and others invested about $15 billion in the film industry.

In Hollywood's portfolio investment, a bank or investment company usually establishes a film fund to raise funds from private or institutional investors. This fund is then used to invest in a large number of film projects of a specific production organization within a certain time range. Generally, the portfolio investment project will involve between 10 and 30 films, The amount of investment is between 10% and 40%.

These capital sources are diversified. According to their consideration of profit and risk, they can be roughly divided into three different types. One is senior debt; Usually from banks or lending institutions, such funds will be repaid first and the risk is relatively small. The second is intermediate financing; The third is share financing, in which investors occupy the corresponding shares according to the proportion of their investment in the whole puzzle. When the debts of the project are paid off, it can obtain the profits corresponding to these shares. The risk is the greatest, but the possible income is also the highest. The second and third funds are mostly from private funds, personal financiers and some institutional financiers.

Portfolio investment usually refers to large Hollywood studios or large film companies, because only the production scale of these companies is enough to achieve the profit stability expected by the investment fund. Last year, almost all major Hollywood studios made portfolio investment, and which film projects are included in a financing portfolio, It depends on the strength game between the investment fund and the major Hollywood studios. The fairer way is for the investment fund to participate in investing in all film projects of the major studios within a certain period of time. The other way is for the major studios to provide films, and the investment fund to select options from the films and add them to the platter.

Such as Warner's Harry Potter, Disney's Pirates of the Caribbean, 20th Century Fox's star wars and MGM's 007 will never participate in any joint investment.

In fact, kavarlaug had long contacted Sonny and hoped to invest in Sonny's 25 films, including spider man, but was rejected by the rich Sonny group, but they were willing to hand over the investment rights of 25 films other than spider man to relativity management.

However, without the big fat meat of spider man, Sonny's platter investment attraction has been greatly reduced, which makes kavarlaug of relativity less interested. Now mm dominates Colombia and MGM, and the capital chain is tighter. They should be interested in the capital of relativity. He came to test mark again.