To: CrazyTrain who wrote (3654 ) 6/24/1999 3:14:00 PM From: Dilution Read Replies (3) | Respond to of 5541
Now this is interesting!!!! So TC just pulled off a big one. MVEE gets ownership of 3 movies that have already been made. Van Damme and MVEE split the 50% of net revenues, presumably after the production studio and distributor get their costs back. So MVEE gets 25% of net for 3 films “in the can” in exchange for, I assume stock, now that Van Damme is a director. Legionnaire is already through the movies and into the video store. I don't know what box was. Universal Soldier 2 is scheduled for Aug 27 according to the web info out there, but the release says Sept. Universal Soldier 1 did about $100-130 million in sales back in 1992. There have been several TV versions since but this is the big sequel. The cost with advertising is let's say… $20 million. 40% goes to the theatre. 60% is split Sony (50%), VD (25%), and MVEE (25%) after Sony gets their $20 million back. So what does the long awaited sequel do in box? Let's say only $50 million, which is 38-50% of the original. That means the following: $30 million for S, VD, and MVEE of which S gets $20 million in costs back then split the $10 M profit S gets $5 M, and VD and MVEE each get $2.5 M. $2.5 M on a company with a $6 M market cap! And what if it is a hit and does more than $50 million in box! And then there is video, HBO, Showtime, cable, etc. Then there is Inferno still to go out in the spring, and the company has first right of refusal on his next 5 films. You see why I said the valuation on the company down here is ridiculous. So why did VD do this deal? I will tell you why. I have seen it before in another company called Big Entertainment, BIGE on NASDAQ. BIGE formed a sub called Huge Entertainment. Huge did a deal with Tom Clancy where Clancy got 49% of Huge and contributed rights to his next three novels. WHY? Because the thinking was that BIGE could really market the product much better and get more $, also Clancy takes royalties taxed at 40% ordinary income and exchanges it for tax deferred capital gains at 20% by holding HUGE stock instead. HUGE has gone on to sign up many writers. A roll up strategy on writers. Look up BIGE news. Could MVEE become a roll up on actors? This looks like the same thing to me. TC's not stupid. Be patient and hold on tight. This is going to be a fun year. I just bought more stock. -Dilution.