* American Soldier, LLC intends to raise $5,000,000 to produce and market American Soldier.
The major budget categories are presented in the top sheet below.
|PREPARRED BY BUFFALO 8|
|1100||STORY & RIGHTS||142,360|
|3000||PICTURE VEHIC & ANIMALS||248,220|
|3100||MAKEUP & HAIRDRESSING||69,809|
|3900||BTL TRAVEL & LIVING||90,780|
|Total Below-The-Line Production||2,129,737|
|4600||POST PRODUCTION SOUND||69,400|
|4800||POST PRODUCTION COLOR||20,000|
|Total Below-The-Line Post||501,608|
|6800||OTHER MISC COSTS||9,000|
|LAWYER FEES : 0.75%||32,642|
|INSURANCE & MEDICAL EXAMS : 1.0%||43,523|
|6900||CONTINGENCY : 10.0%||435,230|
|6900||COMPLETION BOND : 3.0%||130,569|
|Total Above and Below-The-Line||4,343,304|
Investors will recoup 120% of their investment before any profits are distributed. After that point all of the net profits will be split on a 50/50 basis with 50 percent being distributed to the investors on a pro rata basis and the other 50 going to the producing entity.
For example if this film makes $20 million, with our ROI structure: $6 million will be returned to investors, leaving $14 million in net profits. Net profits are split 50/50: $7M is put into an equity pool paid on a pro rata basis All profit participation comes from production entities profit participation.
Investors will be able to buy 50 of 100 available shares in the film LLC. Each share will be valued at $100,000 and will give an investor a 1% profit share of the full gross stake in the film.
Equity & Legislation
Similar to the hard-equity strategy, the legislation strategy allows for production to shoot in a state high in tax-incentives. As an example Utah offers a 20-25% tax-credit on all in state spending.
Equity, Legislation & Pre-Sales
Combining with the two strategies above, a pre-sales agreement takes advantage of a films potential sales results and leverages that against mezzanine debt to finance a portion of the production.
There are very reputable and knowledgeable producers who fully endorse the position that predicting revenue return is, at best, a sketchy business practice. They clearly argue that return predictions should not be included in business planning documents for a variety of very practical and ethical reasons. Variables that include a producer’s budget (production and marketing), industry know-how, industry connections, and market accessibility (among many others) will greatly influence revenue potential. However, even well situated producers have difficulty predicting how the general public will receive a film. Therefore, it is nearly impossible to predict with accuracy a potential return.
On the other hand, there are those who argue return estimations must be included in a business plan, as the Return on Investment (ROI) calculation is necessary for any serious lender. These producers argue that it is possible to make “potential” revenue predictions based on historical performances of films of similar genre and budget.
The Production Team has spent much time exploring both positions and has determined one thing is certain: There is extremely little available data on the world's average ROI for film, statistical risk analysis for independent film projects, or even success to failure ratios for independent productions. What information is available is usually incomplete, based on out-of-date assumptions, and not proven in practice.
Therefore the Production Team is hesitant to attempt a prediction of future revenue, and instead has developed a specific strategy for maximizing earnings over the life of the film. This strategy will follow the following guidelines:
Budget the project appropriately to the market
At Cannes 2012 it was widely observed and reported that buyers were specifically looking for projects with negative production costs between 3 and 5 million dollars. Projects with larger budgets, say in the 10 to 15 million-dollar ranges, were widely ignored, regardless of attached talent. Minimizing overhead and maximizing results.
Collect project specific data from industry
Although some general information regarding current deals being made for dramatic features will be useful to our sales strategy, getting project specific data is critical. Not only will there be knowledgeable information available on “realistic” pricing for the film, but foreign sales agents will also have input on potential talent choices that will work well overseas to maximize revenue. Data gathered will be based on this film, not guesses based on other films.
Explore all possible revenue streams
As mentioned Theatrical, Video on Demand (VOD) for internet and cable, DVD/Blu-Ray, Broadcast and Foreign distribution outlets will be pursued. Specific strategies will be explored for all revenue streams.
Invest in the right places
A recent analysis of spending indicated that a 10% increase in talent spending is currently yielding approximately a 2% increase in return. A 10% increase in marketing spending, on the other hand, is yielding a 10% increase in return. Adding marketing dollars makes the most sense to a film’s bottom line and is good investing.
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