Artist and Executives find Access to Funding at Midem
Sometimes the most difficult thing in the entertainment industry is not the ability create products of market value - individuals in this business are overflowing with creativity and dreams; however, it's always a challenge to find the money to make those dreams come true. Finally, someone has come up with a method of linking the dreams to the capitol needed to see them to fruition. Al Hendrickx, musician and "advisor on foreign exchange provisions" for UK merchant bank Leopold Joseph, has launched a unique investment service, Entertainment Industry Options Exchange, for professionals in the global Motion Picture, Theatrical, Television and Music Industries. Production finance can now be raised by means of listing ventures on a global real-time financial network that reaches every major investment fund and money manager worldwide. Investment summaries, financial data, as well as audio & video materials, are provided over dealing screens with production/artists and financial data that can be viewed by major fund managers and investors with an appetite for entertainment investments.
A unique feature of the Entertainment Industry Options Exchange is a new financial product called a Profit Participation Option (PPO), that allows finance to be raised without giving away equity in a company or production. It simply offers investors the right to participate in the 'net profits' of a movie, theatrical production, concert tour, or sound recording. If the net profits fail to reach the predetermined level set out in the Option Contract, the Option expires worthless, limiting the risk to the investor. The exchange has created an investment product that will give private, retail and institutional investors the ability to invest in entertainment based productions in the early stages of development without risking the normally high sums involved in entertainment investments. Contract prices will range from £10 - £1,000 ($15.95 to $1,591), and money will be escrowed by Leopold Joseph until enough has been raised to start the production. Because Options can be sold in small value units or larger blocks, it allows smaller investors, as well as major retail and institutional brokers the opportunity to participate in entertainment ventures. The product is non-recourse and limits downside risk to a minimum while offering positive upside.
Those who may be interested in finding out more about getting on line with EIOE, which charges a one-time only fee to access the system, and a " per issue" fee each time an event, venture, production, or opportunity is placed on-screen, may want to attend the reception for Merchants Bankers, Leopold Joseph, on 21 January at the Majestic Hotel.
Texas Music Magazine Vol. 10 No. 1 January 2001
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