Private Equity for Film?
Hollywood movies have long been mentioned as one of only two recession proof industries (SB for the first monkey to name the other). Organized, non-industry investing in movies, however, has not proven the least bit easy. Anyone who recalls the shit fit thrown by Hollywood at the notion of a movie ticket sales futures market a while back, knows what I mean.
This golden goose is hard for investors to give up on, however. The latest in a long line of takers is the Chatsworth Group.
Chatsworth MD Rich Furlin is the mind behind the project which is described as:
The ARA-MovieArb Equity Strategy is a private equity vehicle targeting Hollywood films. The goal is to raise $275 million which will be invested in 10-film slates, with an equity limit of $7.5 million per movie. In choosing films in which to invest, MovieArb will be aided by its sister company, Epagogix, which specializes in analyzing the box-office potential of movie scripts (and takes its name from Aristotle's discussion of epagogic, or inductive learning).
I know more than a few of you guys have California dreams in the back of your mind, so how would you approach movie investing? Would your analysis differ from the cut/paste DCFing of bullpens gone mild? When you think about film and the high potential ROI involved, why do you think more financial industry players have not gone after this potentially lucrative investment space?
Or am I mistaken and many would have…but the wide moats of Hollywood have kept the Barbarians at the Gate?