These are two recent articles highlighting what I've been trying to explain to others, namely, that people are cutting way back on nearly everything, but not on going to the movies. Feature films are becoming the smart investment in hard times ...
- Martin
ABC World News, February 20, 2009
Relish an Escape at the Movies
http://abcnews.go.com/Video/playerIndex?id=6926550
(ABC’s George Stephanopoulos) Hollywood is getting all dressed up for the Academy Awards on Sunday night, and as this time lapse video from our station KABC shows, rolling out the red carpet is not all that easy. Just watch this construction outside the Kodak Theater where the Oscars will be awarded.
There is a lot to celebrate in Hollywood this year. Sure, the economy’s a wreck, but when the going gets tough, it turns out, we all go to the movies. Here’s Robin Roberts.
(ABC’s Robin Roberts) The country may be in a recession, but that hasn’t stopped us from dancing to the multiplex, to root for underdogs and superheroes.
(Random Filmgoer) How can you think about recession when you’re watching a wonderful car chase?
(Patrick Corcoran, National Association of Theatergoers) Compared to other forms of out of home entertainment movie theaters are the least expensive way to go out and have a good time. Ticket prices adjusted for inflation are lower than they were in 1978.
(ABC’s Robin Roberts) In fact, we spent more money at the box office last year than ever before, close to ten billion dollars. No one should be surprised. During five of the last seven economic downturns movie ticket sales have jumped. It’s a trend dating back to the Depression. It’s a combination of relatively cheap entertainment, and a need to forget about reality.
(Random Filmgoer) It’s not that expensive, and ah, it’s a nice escape.
(Patrick Corcoran, National Association of Theatergoers) I think people really feel the need to go into a dark place, gather with other people and escape into somebody else’s story.
(ABC’s Robin Roberts) Whether you were looking for the exotic exuberance of “Slumdog Millionaire”, the fairytale ending of “Sex in the City”, the good, funny guy who wins in “Iron Man” or the good, brooding guy who does in the “Dark Knight” – the movies of 2008 had something for everyone. And it looks like 2009 will be no different. The box office receipts so far are up 15% over last year. Robin Roberts, ABC News, Hollywood.
January 25, 2009
SCENE STEALER
Suddenly, Hollywood Seems Like a Conservative Investment
LOS ANGELES
WHEN it comes to Hollywood financing, the sky doesn’t fall so much as it just changes color.
When the movie factory needed cash in the 1980s, it tapped individual investors through brokerage firms. That strategy ran its course, and in the 1990s German tax credits became the next sales pitch: Funnel money to our movies via a legislative loophole, Mr. Berlin Financier, and you can take immediate tax deductions.
More recently, the likes of Goldman Sachs, along with giant hedge funds, poured billions of dollars into groups of movies called slates. The idea was that investing in a dozen or more movies at once, with the return calculated in aggregate after all had been released, was a sure-fire way to invest wisely. In many cases, though, it wasn’t.
Now that the economic crisis has washed away much of that money, a new pickup line is starting to waft through the air in deal-making hot spots like the Sundance Film Festival. The new line is this: Wall Street, real estate, the art market — all of those other supposedly stable investment areas — are now such a mess that Hollywood is one of the safer places you can park money. Although the movie business has been hurt along with nearly every other industry, it’s proving far more resilient to recession than most …
“We have witnessed a surge of existing investors interested in upping their commitment as other opportunities have become less compelling,” Mr. Eraklis said. “I recently had an investor tell me that we no longer occupy the high-risk portion of his portfolio.”
Anybody making the Hollywood-is-safer argument just six months ago would have been laughed out of town. Complex accounting methods, tremendous competition, soaring costs — it wasn’t exactly a safe part of the woods for even the most sophisticated investor.
All of that terrain is still intact, of course, but compare it with imploding investment banks, plunging real estate prices, a whipsawing stock market, Warhols sitting unsold and Bernard L. Madoff. At least in the worst instance of Hollywood investing, you’ll probably catch a glimpse of Angelina and eat some really good shrimp.
“Is investing in movies more attractive now because of what is happening elsewhere in the economy? Yes,” said Daniel H. Black, a partner at Greenberg Traurig, the large entertainment law firm …
“If you can find the right film executives, people who consider themselves fiduciaries more than producers, it’s one of the best bets you can make right now,” Mr. Crown said. “Just remember that it’s over when you start taking yourself so seriously that the project stops becoming a commercial movie,” he continued, “and starts becoming an art project.”
