SHAREHOLDER LETTER 10/2000
(I just found this on MSHE's web site)
mshe.com
Date: 10/19/00
To: MSH Entertainment Shareholders
From: David Pritchard & Robert Maerz
RE: MSH Entertainment Corporate Update
Dear Shareholders,
Late last week MSH Entertainment Corporation announced that it has appointed a new CEO, David Pritchard. Pritchard has recently presented a new strategic plan for the Company that will take advantage of the growing opportunities in the worldwide digital distribution of content via the Internet, as well as traditional media.
The new MSH is directly focused on content and technology as it relates to Hollywood’s digital revolution.
While most of traditional Hollywood is going through a massive consolidation there is this counter culture surge away from network television, and mega budget feature films toward a continued fracturing of interests and the new digital delivery entity "The Internet". To that end, the new MSH is redirecting its efforts away from selling one off programs to a network or studio, towards a franchise and business building "entertainment enabler".
Specifically, what that means is that MSH will provide advisory services, interim-management, and interim-financing (of a limited nature) to a select handful of existing, as well as start-up companies that are either multi-platform content creators or technology companies that enable content producers in reaching their audience. By charging fees for these advisory services, as well as requiring an equity interest in the clients’ business, MSH will build shareholder value with a portfolio of equity holdings in key growth segments of the Entertainment Industry.
We did not arrive at this strategy in a vacuum. What we did was a direct result of taking a hard look at the asset base and relationship base of the existing MSH. Management recently began moving toward this business model through the recent reorganization of MSH’s investment interests in AGE. This new strategy redirected that investment away from a corporate transaction into a handful of specific franchise acquisition opportunities in AGE projects such as: Essential Reality, Max 2 Kids, Vanpires, and separately our Music Holdings and Aston Entertainment. Each of these projects has been reorganized by AGE, MSH, and a team of financial and distribution partners so that each project is set up as a distinct company with separate management and separate financial reporting and, when possible, has been capitalized as an off balance sheet entity with outside strategic and financing partners.
MSH’s assets and equity have grown nicely over the last year to approximately $15 million and with this new strategic perspective, the horizon looks good. We are in the process of duplicating our new business formula with several significant franchise projects that the Company has been nurturing over the last several months.
To measure and enhance the value of our existing business and better understand the full potential of all the potential investments, the Company has begun a recruitment process to attract key executive personnel. Most recently, Pritchard came out of his position of President and CEO of Film Roman, where he won Emmy’s for The Simpsons and King of the Hill. Prior to Film Roman, Pritchard was an Independent Producer and founder of Popular Arts Entertainment, where he produced and developed films and T.V. programs for HBO, Comedy Central, CBS, A&E, NBC and was awarded an Emmy for Dr. Katz, Licensed Therapist and also created and produced one of the first Interactive TV Channels, GOtv for US West on the TimeWarner, Full Service Network.
In addition to Pritchard, Jeremiah Chechik, Rudy Langlais, and Lisa Eisenpresser have joined MSH as Advisors. Chechik is a highly regarded Film Director (Benny and Joon, Diabolique) and a proven Internet entrepreneur as a founder of Intertainer, a leading Internet broadband programming service. Langlais is a highly regarded film producer (The Hurricane, Sugar Hill) and former editor of SPIN magazine. Eisenpresser is one of the leading new media executives with a decade of experience as an executive at iXL, Brilliant Digital Entertainment, and Time Warner Interactive.
Recently, the Company initiated a Private Placement of Preferred Stock. The Company is seeking to raise several million dollars to revitalize the Company and jump-start the new strategic initiative. Depending on the rate we can close on the Preferred Financing, we intend on simultaneously closing several pending deals and pursuing several new projects. We are confident we have an intelligent new strategic direction and have the beginnings of a great management team. What is needed at this point is an infusion of new capital that we can use to reinvigorate the operating MSH and begin to generate operating results that will lead to appreciable shareholder valuations.
Regarding shareholder values, while this reorganization and revitalization is progressing we encourage each of our shareholders to give us some time to earn back your confidence and trust. The Entertainment Industry has gone through several major upheavals in the past five years and MSH has attempted to keep pace amid those changes with mixed results. The new management team is comprised of proven entertainment and technology (Internet) professionals. The new strategy is a new model for an entertainment company and one that does not rely on a select group of ideas being sold to a network or studio but instead it looks to build asset value taking small equity positions in significant franchise opportunities or in businesses run by proven entertainment or technology (Internet) executive teams. MSH Management will rebuild the Company smartly and diligently along these lines looking for opportunities that may be slightly ahead of the curve, but poised for significant and stable growth in traditional and new media distribution.
Managements’ goal is to maximize shareholder returns and value over the long road. This strategy is not a quick fix. What it does represent is an intelligent, measured portfolio approach to an industry that is in flux but has a large, established worldwide market and a seeming insatiable appetite for new formats and varied styles of entertainment.
David and I believe we have defined a well thought out plan and pulled together a smart, tested management team and we ask each of the Shareholders of MSH to stay the course as we implement the strategy, build on that management team, and return your trust with earnings and improved valuations.
Regards,
Bob Maerz, Chairman & David Pritchard, CEO |
