Arundel Partners Investment Analysis Essay

Paramount took advantage of Ms. Marder when they purchased her story. They saw the story as a great investment, especially for the small amount they paid

Portfolio management is an important factor that determines the performance of the portfolio. To perform well in the portfolio, it is not only essential to develop personal investment strategies, but analyzing current financial trend is also vital. Stock Trak is an online portfolio simulation that allows students to try out different investment strategies, and also get a hand on experience in what the real market trading conditions are. By managing the portfolio, I have acquired some new knowledge of investment strategies and also become more familiar with the current market by following closely to the financial headlines.

The maximum per-film price for the sequel rights that Arundel Partners should pay is $5.12M.

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 a studio's entire production during a specified period of time or purchase a specified number of major films. Arundel's profitability is dependent upon the price it pays for a portfolio of sequel rights. Our analysis of Arundel's proposal includes

With the purchase of sequel rights, what Arundel is achieving is to have a call option on the revenue that each movie brings. This helps to remove the uncertainty and risks associated with producing a movie, especially with regard to moviegoers’ taste. With the sequel right, Arundel will only exercise this option to produce a sequel if the first movie proved to be popular and the sequel is hence predicted to bring in profits. This provides downside protection, as huge losses (due to high production costs) associated with a failed movie will be avoided.

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 a studio's entire production during a specified period of time or purchase a specified number of major films. Arundel's profitability is dependent upon the price it pays for a portfolio of sequel rights. Our analysis of Arundel's proposal includes a net present value calculation of each movie production company. In order to decide whether Arundel can make money buying movie

Arundel can make money selling the rights to a higher bid. Another option to make money is by producing the sequel exercising its rights but this will depend on if the net present value of the production movies is higher than the amount of buying the rights. If the future positive cashflows are undervalued Arundel can seek an arbitrage

Competition is intense in this industry, with a handful of major producers whom have great capital resources owning 70% of the market. Lionsgate doesn’t have the resources that most of their competitors have and thus have

With the addition of merchandise, DVDs, videocassettes, princess dress replicas, and amusement park sales, these movies have rounded up nearly $4 billion (Giroux, 7). The popularity of these princesses is evident in the profit that they have made, but does that

In this case, a movie industry analyst is asked to evaluate a proposed venture in which a group of partners would purchase the sequel rights to movies produced by the major studios. Your objective is to 1) discuss and evaluate the basic concept; 2) determine the value of the sequel rights on a per-movie basis; 3) evaluate the possible upside and potential drawbacks to the proposed plan. As you will see, the ideas here incorporate elements of capital budgeting coupled with a “real options” analysis.

Based on the previous module assessments, NBC Universal’s preliminary focus should be geared toward the film industry. The recent trade deal, between both the U.S. and Chinese Governments, lowered a 20-year-old quota on U.S. films and distribution fees in the Chinese film industry. This signifies productive progression within the film industry, even though small in nature, but nonetheless this could equate to significant profit gains for all the FMO’s within the market.

It can very difficult to make a good sequel to a recent blockbuster movie. How likely is it that lightning will strike twice, not very. Creating an all new epsiodic event for you already established characters can be daungting and redundant. These icons have proven themselves to be heoroes in the viewers eyes and writers have to raise the bar even further to coerce moviegoers to part with their entertainment bucks.

Arundel should make an offer to buy sequel rights as the average NPV (on a per film basis ) is $5.51 mn (this is the value calculated using real options method).

The company’s Return on Assets is worrisome as it shows that it loses money on the assets that it has invested in. This number may be amplified by the 741% rise in inventory, but there is still a strong indication that RealD is not using its assets well enough to generate profit. It appears that IMAX is managing its assets well. This income may however be generated by using the money that it has raised by borrowing funds.

This paper analyses the financial performance of the Walt Disney Company during FY’15 using profitability, liquidity, asset management, and debt management ratios, along with the DuPont system and a measure of Economic Value Added (EVA); and recommends purchase of the stock.