Why This is an Attractive Project The Arundel Partners’ believe that they can make money on this project as it allows them to capitalize on the idiosyncratic risk of the motion picture business. Producing and distributing motion picture films is a risky business due to the uncertainty of moviegoers’ tastes and a studio never knows if they have a blockbuster on their hands until after the movie has started production or even later after it has been released. The financial resources of even the largest
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Arundel Partners Edgefield Consulting 09/25/98 As a new business opportunity arises‚ so do some of the uncertainties that come along with it. Our company has been brought in to evaluate some of these uncertainties that come along when unchartered territory is explored. Arundel Partners has an idea that has great potential‚ but there are a few problems that must be addressed in order for the idea to become reality. First‚ we will look at potential limited partners. More than likely general
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----------------------------------- spootyhead Apr 17‚ 2007 Arundel Partners Case Analysis ----------------------------------- Arundel Partners Case Analysis Executive Summary: A group of investors (Arundel group) is looking into the idea of purchasing the sequel rights associated with films produced by one or more major movie studios. Movie rights are to be purchased prior to films being made. Arundel wants to come up with a decision to either purchase all the sequel rights for
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out with a new business idea. The idea was to create an investment group‚ Arundel Partners‚ to purchase the sequel rights associated with films produced by one or more major U.S. movie studios. As owner the rights‚ Arundel would wait to see if a movie was successful‚ and then decide whether or not to produce a second film based on the story or characters of the first. One of the unique features of the new idea was that Arundel would purchase sequel rights before the first films were even made and released
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business idea. The proposal was to create a new investment group‚ Arundel Partners‚ that would exist solely for the purpose of purchasing sequel rights to motion pictures produced by major U.S. movie studios. The proposal was unusual in that studios rarely sold rights to sequels prior to 1992‚ and interesting in the sense that it did not target specific movies or negotiate prices based on performance of the first movie. Instead‚ Arundel wanted to create a portfolio of options to produce all sequels
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Proponents of this venture believe that Arundel should be able to make money by buying options to movie sequel rights as a portfolio of rights rather than on a film-by-film basis because they are diversifying their risk by spreading their options across multiple projects rather than a single movie. Arundel avoids trying to forecast how well the movie will do by purchasing the options to a group of movies ahead of time‚ thus they minimize the risk of moviegoers preferences changing. Past performances
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[Type the company name] | Arundel Partners: The Sequel Project | Advanced Corporate Finance Case Analysis I | ZUBOV‚Vasily 1072582 LI‚Xinyuan 05403613 WU‚Yun 08426959 LU‚Yuan 08426975 9/21/2009 | Executive summary In 1992‚ an unusual business idea came into the eye of David A. Davis‚ a movie industry analyst in Los Angeles. The idea
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Arundel Partners: The Sequel Project 1. Executive Summary “Nobody knows anything”. This famous line coined by William Goldman‚ a well known Hollywood screenwriter‚ simply but honestly sums up the movie industry. Numerous academic studies have tried to gauge the determinants of movie success but have yet failed to deliver a satisfying answer. Ravid A. (1999) for example finds that neither stars nor big budgets contribute to profitability of a movie. This case study investigates the case of buying
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Case 1. Arundel Partners: The Sequel Project 1. Why do the principals of Arundel Partners think they can make money buying movie sequel rights? Why do the partners want to buy a portfolio of rights in advance rather than negotiating movie-by-movie to buy them? The principals at Arundel Partners believe that there is value that is not captured in a discounted cash flow when analyzing the launching of a film. They believe that by launching a new film‚ there is immediately an option to launch a sequel
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Reconstitution of partnership ADMISSION OF A PARTNER SOLUTIONS 1. Since a new partner gets his share of profit from old partners‚ he must compensate the old partners for the share sacrificed by them. The amount of compensation given by the new partner is known as goodwill. 2. Assets and liabilities are revalued because the entire profit and loss due to their revaluation is divided amongst the old partners in their old profits sharing ratio. The new partner should not share such profit or loss because
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