The Summit Studios, LLC
Item Type text; Electronic Thesis
Authors Ewald, Robert Charles, Jr.
Publisher The University of Arizona.
Rights Copyright © is held by the author. Digital access to this materialis made possible by the University Libraries, University of Arizona.Further transmission, reproduction or presentation (such aspublic display or performance) of protected items is prohibitedexcept with permission of the author.
Download date 07/12/2020 21:46:30
Link to Item http://hdl.handle.net/10150/579337
Robert C. Ewald, Jr. /Founder
Business Plan v.4.0
May 6, 2015
thesummitstudios.com
Business Plan v.4.0 The Summit Studios, LLC
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The following is a
Thesis Submitted to The Honors College
In Partial Fulfillment of the Bachelors Degree
With Honors in
Entrepreneurship
THE UNIVERSITY OF ARIZONA
MAY 2015
The Summit Studios, LLC
By
Robert Charles Ewald, Jr./Founder
I was the sole team member and am responsible of all of the content within this
Business Plan.
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EXECUTIVE SUMMARY
The Summit Studios, LLC
One line pitch: Capitalize on the decentralization of filmed
entertainment production from California by rebuilding the
Tucson film production infrastructure capable of supporting
continuous production and augment the arts schools of the
College of Fine Arts at the University of Arizona.
Business Summary: The Summit Studios, LLC is a filmed
entertainment production facility to support all phases
essential for production companies in creating and assembling
their imaginative projects.
Management:
Robert C. Ewald, Jr./CEO
Customer Problem: Between the “pulling” influence of
“Convenience Technologies” expanding filmed product delivery
and the chronic deterioration of the California business climate,
production companies are turning to other production markets
to meet their production needs. This effect is known as
“runaway production.”
Product/Services: 3 – 5 soundstages totaling 97,000 ft2,
Grip House, Art Factory, 3 Wardrobe Shops, Dressing and
staging space for 600 extras, Production office building, Post-
production building, 40 seat screening room, Office build-out
space for commercial production and creative support
companies, 24hr Full service professional kitchen supporting a
commissary and location catering, 1,200 ft2 Producer’s library
and conference suite, 1,500 ft2 exercise room, and 9 two-story
townhouses for VIP’s
Target Market: The motion picture and television industry primarily based in
Hollywood focusing on “runaway productions.”
Business Model: B2B servicing productions as a for-profit entity and supply an
annex exclusively for the School of Theatre, Film, and Television at the University of
Arizona.
Competitors: States offering state incentive programs with emerging
infrastructures primarily in New Mexico, Louisiana, Georgia, and North Carolina.
Competitive Advantage: Only full service studio complex in Arizona, a decade’s
long relationship with Hollywood as a production destination, convenient location,
reliable weather, new production incentive program, and the only independent studio
facility partnered with a major university.
www.thesummitstudios.com
Industry: Filmed Entertainment
Production
Contact Info:
Financial Information:
Company Stage: Development
Previous Capital Investment:
$20,000
Projected Monthly Burn Rate:
Stage 1: $21,250
Pre-money Valuation:
$5,700,000
Capital Requirements:
Stage 1: $255,000
Stage 2: $45 – 50 million
Management:
Robert C. Ewald, Jr./CEO
Advisors:
Dean Jory Hancock; College of Fine
Arts
Victoria Lucas; Producer
John Robinett; AECOM Economics
Jerry Svee, CBA, Ltd.
William White; Land Advisors
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Customer Validation: A cross section of stakeholders including filmmakers,
industry agencies, and prominent academia knowledgeable of the Tucson production
market have unanimously endorsed the need for the studio.
Sales/Marketing Strategy: A studio management company will be retained at the
commencement of construction to assemble the marketing staff, engage pre-
established relationships with production executives to pre-book studio space 30% or
more by opening day, and oversee day-to-day operations.
Conceptualization: Central Campus Elevation
Use of Proceeds – Stage 1:
Feasibility Study $85,000
Project Manager $20,000
Accountant $20,000
Management Co. $20,000
Legal $40,000
Salary $56,000
Misc./Contingency $14,000
TOTAL $255,000
Financial Objectives
Year
Venture Status
Productions/% Capacity 2/20% 5/50% 10/83%
Revenue 6,700,000$ 16,800,000$ 33,600,000$
Cost of Revenue 3,400,000$ 6,700,000$ 12,300,000$
Gross Income 3,300,000$ 49% 10,100,000$ 60% 21,300,000$ 63%
Operating Expenses 3,100,000$ 7,700,000$ 15,400,000$
EBITDA 200,000$ 3% 2,400,000$ 14% 5,900,000$ 18%
Income Objectives - $15M Average Budget1 3 5
Start-up Stable Healthy
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Table of Contents
EXECUTIVE SUMMARY............................................................................ 2
THE COMPANY .......................................................................................... 6
INTRODUCTION .................................................................................................................................. 6
VISION AND MISSION ....................................................................................................................... 6
KEY GOALS ............................................................................................................................................ 6
CORE COMPETENCY ......................................................................................................................... 7
BUSINESS MODEL .............................................................................................................................. 7
VALUE PROPOSITION ....................................................................................................................... 7
THE PRODUCT ............................................................................................ 8
PROBLEM .............................................................................................................................................. 8
SOLUTION ............................................................................................................................................. 9
OUR PRODUCT .................................................................................................................................... 9
ALTERNATIVE VALUE................................................................................................................... 10
INDUSTRY OVERVIEW ........................................................................... 11
THE CUSTOMER............................................................................................................................... 12
MARKET RESEARCH ...................................................................................................................... 12
MARKET SIZE & SEGMENT ......................................................................................................... 15
COMPETITION .................................................................................................................................. 15
BARRIERS TO ENTRY .................................................................................................................... 19
MARKETING ............................................................................................. 20
MARKETING OBJECTIVES, STATEGIES, TACTICS .............................................................. 20
SALES OBJECTIVES ......................................................................................................................... 21
GROWTH STRATEGIES ................................................................................................................. 21
OPERATIONS ............................................................................................ 23
PRODUCTION OBJECTIVES & STRATEGIES .......................................................................... 23
RESOURCE REQUIREMENTS ...................................................................................................... 25
TIMELINE ........................................................................................................................................... 26
FINANCIAL OVERVIEW......................................................................... 27
REVENUE OBJECTIVES ................................................................................................................. 28
EXPENSE BUDGET .......................................................................................................................... 28
USE OF FUNDING ............................................................................................................................ 28
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FUNDING PROPOSAL ..................................................................................................................... 29
EXIT PLAN .......................................................................................................................................... 29
MANAGEMENT TEAM ........................................................................... 30
MANAGEMENT ................................................................................................................................. 30
VENTURE ADVISORS ..................................................................................................................... 31
COMPLIANCE & LEGAL STRATEGIES ............................................... 33
APPENDICES ............................................................................................. 34
BIBLIOGRAPHY ........................................................................................ 79
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THE COMPANY
The Summit Studios, LLC is an Arizona company formed in 2015.
INTRODUCTION
The Summit Studios, LLC is a filmed entertainment production facility to support all
phases essential for production companies in creating and assembling their
imaginative projects.
VISION AND MISSION
Vision – To capitalize on the decentralization of filmed entertainment production
coming out of California.
Mission – Rebuild the Tucson film production infrastructure to the capability of
supporting continuous production and emboldening the arts schools of the College
of Fine Arts at the University of Arizona.
KEY GOALS
Locate studio with these attributes
o Convenient major roadway access
o Reasonable distance from airport
o Convenient access to hotels, restaurants, and a variety of retail and
rental establishments
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o A state-of-the-art facility
Support independent filmmaking in Arizona
Develop a production incentive program to compete with other national
production cities
Provide a major expansion of facilities, equipment, and educational resources
for the School of Theatre, Film, and Television at the University of Arizona
o Internships
o Entry level positions on productions
o Opportunities for students in the schools of Theatre, Dance, and Music
CORE COMPETENCY
The founder, Robert C. Ewald, Jr. is the singular core element essential for the
success of the venture. Mr. Ewald has several years’ experience developing this
project for another growing market in the country and has developed professional
relationships with quality key personnel and professional services specific to this
venture. Mr. Ewald can accomplish this venture from development through
construction and into the initial years of a successful and thriving firm.
BUSINESS MODEL
To service productions as a for-profit entity and supply an annex exclusively for the
School of Theatre, Film, and Television
VALUE PROPOSITION
Only full service studio complex in Arizona, long standing relationship with
Hollywood as a production destination, convenient location, reliable weather, a
production incentive program, and the only independent studio facility partnered
with a major university.
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THE PRODUCT
The Summit Studios’ campus will be located on approximately 38-acres in the
Tucson area within a 6 - 12-mile radius of the University of Arizona. The site will be
within 20 minutes of the airport and downtown. The site will be readily accessible
to nearby hotels, entertainment, restaurants, lumberyards, heavy equipment and
vehicle rental, and a variety of retail shopping areas.
The campus will be organized to provide adjacency between the soundstages, grip
house, art factory, and wardrobe areas. The production office suites and public
lobbies will be located in wings focusing on a made-made water feature in the heart
of the campus. All offices will have the benefits of natural light and a view of the
water feature or other landscape features. The production suites wing will have its
own lobby and entrance separate from the main visitors’ reception lobby.
PROBLEM
Tucson Production Market SWOT Analysis
Strengths
Close proximity to Hollywood
85 year history with Hollywood
Industry insiders residing here
College of Fine Arts
School of Theatre, Film, and Television
Hanson Institute
Active independent filmmaking base
Weaknesses
Limited infrastructure
No State Tax Rebate Program
Limited crew base
Opportunities
Increase in industry production nationally
Ongoing runaway productions from CA
Producers/Production Companies want to
shoot here!
Threats
Other national markets attracting productions
with tax rebates, crew, and infrastructure
Trends
Runaway productions will continue. State Tax Rebate programs are here to stay.
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SOLUTION
The Summit Studios, LLC is a filmed entertainment production facility to be located
within the Tucson area designed to provide all the necessary services and support
for production companies to craft their creative projects. Additionally, exclusively
for students and staff, will be an on-lot annex for the University of Arizona’s School
of Theatre, Film, and Television.
OUR PRODUCT
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The studio features:
3 – 5 soundstages totaling 97,000 ft2
Grip House, 28,000 ft2, containing open workspace, camera and equipment rental,
video assist, and sound departments.
Art Factory, 14,000 ft2, of open set construction space for millwork, metal work,
plaster shop, signage, paint booths, and special effects.
Production office building capable of sustaining three productions simultaneously -
3 floors each containing production office space, film editing suites, and a separate
Director’s bungalow.
Post-production building
40 seat screening room
3 Wardrobe Shops with dye vats
Dressing and staging space for 600 extras
Office build-out space for commercial production and creative support companies
Full service professional kitchen supporting a commissary, and location catering
1,200 ft2 Producer’s library and conference suite
1,500 ft2 exercise room with sauna, steam room, and private lockers
9 two-story townhouses for VIP’s
ALTERNATIVE VALUE
Tucson Economic
Impact
Dramatic infusion of new money into local economy from productions and personal expenditures.
Creation of additional jobs (directly and indirectly). Attraction/retention/skill upgrading of qualified workforces Creation of business partnerships. Development of related or spin-off companies. Tax revenue for state and local governments.
University of Arizona
Recipient of much needed capital improvement. Establish business partnership in line with Never Settle initiative. Raise national profile of a degree program with major studio association.
School of Theatre, Film, and television
Major program expansion with the state-of-the-art annex facility and production equipment.
Internships Employment opportunities
Tourism Film and television productions generate tourism activity through the attraction of visitors to the region. This type of tourism activity is known as film induced tourism (FIT).
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INDUSTRY OVERVIEW
The motion picture industry in the United States had its modest beginning in New
York City. In 1891, Thomas Edison and his assistant, W. K. L. Dickson, developed and
patented the Kinetograph camera and the Kinetoscope viewing box. With
translucent celluloid film invented by George Eastman in 1888, and the first small
studio built for film production, the Black Maria, on the grounds of Edison’s New
Jersey laboratory by 1893, short films of approximately 20 seconds were produced.
On April 14, 1894, the first Kinetoscope parlor opened in New York. The
Kinetescope was a success with machines showing up in Nickelodeons across the
country. During this time Thomas Armat had improved upon an earlier projector
design and called it the Vitascope, making its public premier at Koster and Bail’s
Music Hall on April 23, 1896. The event consisted of showing six films and marked
the beginning of projected movies to audiences as a viable industry. At the end of
the next ten years of fierce competition, patent piracy, and litigation, a movement
west had developed.
In the mid to late-1910s films are much like modern movies than like the novelty-
oriented short subjects made only a few years before. The process of building the
Hollywood studio system commenced. Owners and founders of distribution,
exhibition, and production companies began to merge. Carl Laemmle formed
Universal City (Universal Pictures), Adolph Zuker (Paramount), Sam, Jack, and Harry
Warner (Warner Brothers), William Fox (20th Century-Fox), and Samuel Goldfish
with Edgar and Archibald Selwyn’s of the Goldwyn Pictures Company and Louis B.
Mayer joined with Marcus Loew’s Metro Pictures (MGM). By the mid-1920s these
studios were vertically integrated and dominated the U.S motion picture industry
for the next three decades, affectionately known as Hollywood’s golden era.
This oligopoly of the five major studios came to an end in 1948. The United States v.
Paramount Pictures, Inc. decision (also known as the Hollywood Antitrust Case of
1948) was a landmark United States Supreme Court antitrust case that broke apart
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the vertical integration of exhibition, distribution, and production of motion pictures
by the studios. The studios were allowed to retain control of only two of the three
divisions, so they reverted to their origins, controlling exhibition and distribution.
The “studio system” was over. Production, and all those associated with it, were now
released to the open market as independent contractors creating the system we still
have today.
THE CUSTOMER
An individual production company (the producer), a single person or small group of
people, now produce their creative products funded by studio money or outside
investment capital. Along with the freedom of developing one’s own creative project
came the burden of having to assemble all the necessary human and material
resources to manufacture it. Hence the need for studio facilities like The Summit
Studios to provide those necessary resources.
MARKET RESEARCH
Filmed entertainment in the United States mainly consists of movie production and
television production. Movie production revenues nationally were $32.9 billion and
television production revenues were $32.8 billion. According to the U.S. Bureau of
Economic Analysis, the motion picture industry in total added $83.2 billion to the US
economy. (Carnwath) Hollywood has been losing its luster for several years as
production has migrated into the rest of the country.
This hemorrhaging of production from Hollywood began in 1997 and has continued
ever since. This Phenomenon is referred to as “runaway production.” (See appendix 1
for industry revenues)
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Source: LA Times - Richard Verrier
The filmed entertainment industry in the United States has evolved as new drivers
dictate the course of how product is developed and consumed by the public, and the
chronic anti-business environment in California. The seemingly ubiquitous viewing
technologies available for the viewing public have placed unprecedented demands
on networks for content. “Convenience Technologies”
have effectively put an end to “water cooler” television,
replaced by audience fragmentation, binge watching,
audience communities, and pull vs. push television.
(Selznick) In film, distribution and exhibition have
evolved to the point where many films bypass
theatrical release altogether and are immediately fed
into a prearranged series of “windows” to capture
revenue. (See appendix 2 for distribution windows)
These changes in technology and viewing habits of the
audience have placed a growing demand, in other
words, a “pulling effect” for more products. This has
led to a steady increase in production and continues to
apply pressure to the infrastructure that supports it.
“Planning to shoot out
of (California) has
become the new
normal for studios and
producers, and the
situation has
accelerated in the past
five years as
competition for
production widens
throughout the world.”
Bob Strauss Los Angeles Daily News
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These pressures have created the growth of production markets outside of
California. From 2005 to 2012 an estimated 12,400 jobs were lost in Los Angeles.
Meanwhile, an economic impact report on the louisianaentertainment.gov website
noted that in 2012, the state’s tax credit program resulted in $1.1 billion in sales at
Louisiana firms, $770.6 million in household earnings and 15,184 jobs. (Strauss)
Sources: Entertainment Partners, state film commissions, FilmLA Inc., State of Pennsylvania, IMDB, Rentrak and Times research. Credits: Richard Verrier, Scott Wilson and Thomas Suh Lauder, Programming by Anthony Pesce. Published: Dec. 26, 2013
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Observe changes of California, Arizona, Nevada, Texas, New Mexico, Louisiana, and
Georgia as a result of a variety of state production incentive programs.
MARKET SIZE & SEGMENT
The Tucson area has been a favorite location for filming Hollywood motion pictures
since the 1930’s. For several decades Tucson was known as “Hollywood in the
desert.” In the 1980s through the mid-1990s, Tucson was the third busiest
production market in the country, after Los Angeles and New York respectively. The
area has many attractions for production: close proximity to Hollywood, dependable
climate, lower labor and production costs, and Old Tucson Studios (now known as
Old Tucson). In 1995, Old Tucson Studios experienced a devastating fire that
consumed 40% of the property including a soundstage and several historic
locations. The tragic loss of that historical landmark, and a change in the viewing
public away from the western genre, resulted in the Tucson production market
experiencing a long decline from the levels it once commanded.
Does not include television series, television episodes, television commercials, and other filmed products.
COMPETITION
Local
Direct competition to The Summit Studios does not exist within the state of Arizona.
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Fe a t u re F i l m a n d T V M ov i e P r o d u c t i o n s
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Arizona Tucson Old Tucson Studios
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Regional
Competition does exist from New Mexico.
New Mexico Studios Comparison Chart
The Summit
Studios
Albuquerque
Studios
I-25 Studios
(Albuquerque)
Santa Fe
Studios
Garson Studios
(Santa Fe)
48,000 ft2 Soundstage 2**
45,000 ft2 Soundstage
36,000 ft2 Soundstage 2***
34,000 ft2 Soundstage ****
24,000 ft2 Soundstage 4 3
19,275 ft2 Soundstage 2
18,000 ft2 Soundstage 4
14,000 ft2 Soundstage w/cyclorama
12,000 ft2 Soundstage * 2
7,500 ft2 Soundstage
6,000 ft2 Soundstage *
3,000 ft2 Soundstage/green screen 1
2,500 ft2 Soundstage
Dressing Rooms 30 4
Make-up Rooms (4 Chairs each)
Grip House 28,000 ft2
Camera Department
Sound Department
Art Factory 14,000 ft2 30,000 ft2 13,000 ft2
Mill Shop 20,000 ft2 11,000 ft2 4,600 ft2
Paint Booth 2,700 ft2
Wardrobe Shops 3 w/dye vats
Extras Holding space 600 extras
Production Offices 75,000 ft2 30,000 ft2 24,000ft2
Commissary
Screening Room 40 seat 27 seat
Director’s Bungalow
Producer’s Lounge
Postproduction Suites
CGI Production
Exercise Facilities 1,500 ft2 219 ft2
Backlot
On-site Housing 9 Units
Concierge Service
Academic Association University of
Arizona
Central New
Mexico
Community
College
Central New
Mexico
Community
College
Santa Fe
Community
College
Santa Fe
University of
Art and Design
* 18,000 ft2 converted to 12,000 ft2/6,000 ft2 stages, or 6,000ft2/6,000 ft2/6,000ft2 stages
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** Combination of both 24,000 ft2 stages
*** Combination of both 18,000 ft2 stages
**** Combining both stages
New Mexico Production 2014
Productions Expenditures
(in millions)
Major Projects
(budget over $1 M)
61 $196.5 18
(See appendix 3 for filmography)
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National
Three states with growing production centers are: New Orleans/Baton Rouge,
Louisiana; Atlanta, Georgia; and Wilmington, North Carolina.
Louisiana
Source: Office of Entertainment Industry Development, Louisiana Department of Economic Development
Georgia
Source: Economic Contributions by the Georgia Film and Television Industry, Executive Summary 2011
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North Carolina
BARRIERS TO ENTRY
A significant level of initial capital investment is necessary to enter the industry. In
addition, state tax rebate programs across the country have made certain regions
very competitive for runaway productions coming from California to produce their
products.
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MARKETING
MARKETING OBJECTIVES, STATEGIES, TACTICS
Objective The customer – Production Companies/Producers of motion pictures, television series, television commercials, music videos, and all other forms of filmed entertainment product. Strategy To target the motion picture and television industry primarily based in Hollywood focusing on “runaway productions”, and the independent filmmaking community in Arizona. Tactics Utilizing various sources and means to generate a general awareness of the studio and targeting specific entities.
• Management Company – engaging established relationships with studios,
production companies, and producers.
• Industry periodicals
o Variety
o Daily Variety
o The Hollywood Reporter
• Industry Tradeshows
o Show East
o Association of Film Commissions International
• National Film Festival Circuit
• Film Tucson Office – Only film coordination office in Arizona
• College of Fine Arts - Alumni
• Local industry groups
o Independent Film Arizona
o Arizona Models and Actors Forum
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SALES OBJECTIVES
Production Length = 3 months (1 Qtr.)
3 Production Offices X 4 Qtrs. = 12 Productions annually = 100% Capacity
(See appendix 4 for assumptions)
GROWTH STRATEGIES
Scope – Dominate Arizona
Attract productions from Tucson, Arizona, and southwest region simultaneously.
Start-up (20%) Stable (50%) Healthy (83%)
Capacity 2 5 10
Average Revenue 3,360,000$ 3,360,000$ 3,360,000$
Total 6,720,000$ 16,800,000$ 33,600,000$
Sales Goals - $15 Million Budget
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Scale
Sites allow for facility expansion projects. (See appendix 5 for sites under consideration)
2
4
6 9
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OPERATIONS
PRODUCTION OBJECTIVES & STRATEGIES
There are three stages for the completion of the venture.
Stage One – completion of development documentation and secure financing
for Stage Two.
6/1/201512/31/2017
7/1/2015 10/1/2015 1/1/2016 4/1/2016 7/1/2016 10/1/2016 1/1/2017 4/1/2017 7/1/2017 10/1/2017
5/30/2016
DEVELOPMENT COMPLETE6/1/2015
SEED CAPITAL AQUISITION
1/1/2017
CONSTRUCTION BEGINS
12/31/2017
END CONSTRUCTION; BEGIN OPERATIONS
12 MONTHS 6 MONTHS 12 MONTHS
DEVELOPMENT FINANCING CONSTRUCTION
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Stage Two - construction of the studio facility
o Project construction schedule
o Project budget
o Project cash flow
(See appendix 6 for construction schedule)
(See appendix 7 for project budget)
(See appendix 8 for project cash flow)
Feasibility Study Accounting
Pro Forma
Founder
Architect Marketing
Architect RFP
Process
Project
Management
Finance
Business Plan Revision
Management Company
Offering Document
Construction
Budget,
Schedule,
Cash Flow
Legal
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RESOURCE REQUIREMENTS
Stage One –finalize development documentation
Feasibility Study (see appendix 9 for proposal scope) – conducted by AECOM/ERA
Associates
o Required for Stage Two financing
o Provides real time data for accounting pro forma
o Validates services offered and recommends changes if necessary
Project Management Firm
o Responsible for Architect RFP process
o Develop budget, construction schedule, and cash flow burn rate
Accounting Firm
o Develop Pro forma
o Works with AECOM/ERA Associates
o Potential debt and/or equity participation identification
Management Firm
o Develops marketing campaign
o Implements campaign
Legal Firm
o Develop Offering Documents for Stage Two
Land
Several possible sites of 35 acres and greater have been identified. These factors are
considered favorable for ultimate site selection.
Convenient access to freeway system
Close proximity to airport
Driving distance to University of Arizona campus
Convenient access to hotels and restaurants
Convenient access to various retail outlets
Adequate surrounding acreage for future expansion
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TIMELINE
Stage One
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FINANCIAL OVERVIEW
THE FOLLOWING INFORMATION CONTAINED IN THIS SECTION IS NOT A SOLICITATION FOR FUNDS. THE INFORMATION PROVIDED IS PURELY SPECULATIVE AND INTENDED FOR GOAL SETTING PURPOSES ONLY. Filmmakers use the Movie Studio Rental industry to rent filming space. In
addition to lacking the necessary space to shoot scenes for films, smaller
filmmakers often also lack sound and lighting equipment, on-
site technical support and other luxuries such as trailers and
catering services. Because these filmmakers rarely own all
equipment needed to create scenes, virtually all companies
within the Movie Studio Rental industry provide these value-
added services as part of various rental packages. Video
cameras, stage lights, effects lights, butterfly and flag/scrim
kits, boom microphones, set pieces, miscellaneous props, and
other materials all comprise a substantial portion of industry
revenue. (Petrillo 6) Production often also involves the rental
of expensive trailers for the cast and some equipment. This segment of the cost
structure is expected to remain steady during the five years to 2018. (Turk 24)
“In-studio production costs are hefty, with many producers competing for the space.”
Sarah Turk IBISWorld
Industry Report
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REVENUE OBJECTIVES
(See Appendix 4 for assumptions)
EXPENSE BUDGET
(See appendix 10 for industry expense standards)
USE OF FUNDING
Feasibility Study $85,000
Project Manager $20,000
Accountant $20,000
Management $20,000
Legal $40,000
Salary $56,000*
Misc./Contingency $14,000
TOTAL $255,000
*Includes 32.54% Federal and State Income Tax
Year
Venture Status
Productions/% Capacity 2/20% 5/50% 10/83%
Revenue 6,700,000$ 16,800,000$ 33,600,000$
Cost of Revenue 3,400,000$ 6,700,000$ 12,300,000$
Gross Income 3,300,000$ 49% 10,100,000$ 60% 21,300,000$ 63%
Operating Expenses 3,100,000$ 7,700,000$ 15,400,000$
EBITDA 200,000$ 3% 2,400,000$ 14% 5,900,000$ 18%
Income Objectives - $15M Average Budget1 3 5
Start-up Stable Healthy
Year
Venture Status
Wages 1,300,000$ 3,200,000$ 6,300,000$
Facilities/Overhead 600,000$ 1,400,000$ 2,900,000$
Marketing 600,000$ 1,500,000$ 3,000,000$
G + A Expense 600,000$ 1,600,000$ 3,100,000$
Total 3,100,000$ 7,700,000$ 15,300,000$
Operating Expenses - $15M Budget1 3 5
Start-up Stable Healthy
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FUNDING PROPOSAL
Stage 1 - $255,000 Stage 2 - $45 – 50 million
EXIT PLAN
Running a successful, profitable company.
Conservative Liberal
Favors Investors Favors Founders5th Year Revnue Objective 33,600,000$ 33,600,000$
5th Year EBITDA Objective 6,000,000$ 6,000,000$ 18% of Revenue
Price/Earnings Objective 5 10
5th Year Valuation Objective 30,000,000$ 60,000,000$
Return on Investment Objective 20$ 10$
Start-up Post-money Valuation Estimate 1,500,000$ 6,000,000$
Nominal Funding Objective 200,000$ 250,000$
Pre-money Valuation Estimate 1,300,000$ 5,800,000$
Investor Ownership Estimate 13% 4%
Venture Valuation $15M
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MANAGEMENT TEAM
MANAGEMENT Robert C. Ewald, Jr. has spent three decades in the business
world as an independent contractor primarily in the motion
picture industry in two capacities, and the residential
remodeling industry. Noteworthy endeavors have been as an
assistant director on motion pictures, TV commercials, and
music videos. In the late 1990’s, he developed a $35 million
motion picture studio facility, Polestar Studios, Inc., from a
single page idea to a full Business Plan. He astutely
assembled a professional team to launch, including an Investment Bank willing to
underwrite $21 million of the debt financing. More recently, as a Student Senator at his
junior college in Minneapolis, Minnesota, he developed a construction proposal for a
desperately needed on-campus parking ramp. By overcoming entrenched disbelief toward
the idea ever materializing, the project was subsequently approved by the president and
board of regents in May 2010 prior to coming to the University of Arizona. Construction
of the ramp was completed in August 2012 as proposed. He has developed, through
challenges great and small, multiple creative and analytical skills, reinforced with
tenacious focus in achieving ones goals. He will complete this project.
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VENTURE ADVISORS
Mr. Ewald understands the needs of a venture of this size and has assembled the
professional services and film and television industry veterans knowledgeable of the
successful development, construction, and operation of the studio project.
Tucson film and television veterans
Victoria Lucas; Producer, Tucson, AZ. Victoria Lucas is known for
her work on Far and Away (1992), Splash (1984), Clean and Sober
(1988), The I Inside (2004), and The Black Dahlia (200). She was a
Creative Director for Director Ron Howard, and a Director of
Development and Producer with Academy Award-nominated producer
Rudy Cohen.
Justin Kreinbrink, Misty Production Services; Tucson, AZ. MPS is the
largest grip/electric/camera supplier in southern Arizona, and the
second largest in the entire state. Mr. Kreinbrink is a co-owner of
MPS and his credits include producing, directing, acting, and stunt
work.
Accounting
Marty Kanter; Schechter, Dokken & Kantor, Minneapolis, MN.
SDK was formed in 1990. They are based in Minneapolis, MN,
however their reach is international, and our resources
augmented due to their membership with the PKF North
American Network. Memberships include the AICPA (American
Institute of Certified Public Accountants) in the Private Companies Section (PCPS);
the Center for Public Company Audit Firms; the Governmental Audit Quality Center;
and the Employee Benefit Audit Quality Center.
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Feasibility Study/Economic Impact Analysis
John Robinett; AECOM Economics, L.A. CA. Feasibility services for
regional and place-based economic development, urban revitalization,
real estate, tourism and culture, and sharpen the boundaries of a
preliminary plan or concept. Collaborating with other disciplines, they
develop strategies so that plans can respond to the market, attract financing, and execute.
Project Management
Jerry Svee, CBA, Ltd., Minneapolis, MN. CBA, LTD is a professional
construction consulting and construction project management firm
headquartered in Minneapolis, Minnesota. They have over three
decades of experience as an exclusive owner’s representative and
advisor.
Land Identification
William White; Land Advisors, Tucson, AZ. The Land Advisors
Organization is the nation’s largest brokerage company focused
exclusively on land. Founded in 1987, the company has experienced
land brokers, acquiring the most comprehensive data, and utilizing
cutting-edge technology to display and interpret this ever-changing
collection of information.
Dean Shane Burgess; College of Agriculture and Life Sciences, the
University of Arizona. From his position in the College of Agriculture
and Life Sciences, Dean Burgess is knowledgeable of the location and
status of the University of Arizona’s land holdings.
School of Theatre, Film, and Television Annex
Dean Jory Hancock; College of Fine Arts, the University of Arizona.
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COMPLIANCE & LEGAL STRATEGIES
Discussions with legal team revolve around corporate structure: LLC, S-Corp, or a
new structure valid since January 2015.
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APPENDICES
1. Movie and video production industry
2. Distribution release windows
3. New Mexico filmography
4. Revenue assumptions
5. Land parcels
6. Studio construction schedule
7. Project budget
8. Project cash flow
9. Feasibility Study proposal and scope of services
10. Industry cost percentages
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Appendix 1
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Appendix 2
Typical release window path for maximum revenue generation.
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Appendix 3
New Mexico Filmography
Fiscal Year 2014 Majors (Budgets > $1M) - Features & Television Projects
Quarters Title Type NM Production Months
1 The Guest Feature Mid- July – Late August
1,2 Night Shift S1 TV Series Late August – Mid- November
1 Persecuted Feature Mid- July – Early August
1,2 The Reach Feature Mid- September – Mid- October
1, 2 Big Sky Feature Late September – Early November
1, 2 Dirty Weekend Feature Mid- October – Early November
1,2,3 Killer Women S1 TV Series Late September – Early February
1, 2 La Vida Robot Feature Mid- October – Mid- December
3 Good Kill Feature Mid- February – Early March
3 The Messengers TV Pilot Mid-March - Early April
3 Midnight Special Feature (Partial) March
3, 4,1 Hieroglyph S1 TV Series (Partial) Mid- March – July
2, 3, 4, 1 Manhattan S1 TV Series Mid- March – Late July
3, 4, 1 Longmire S3 TV Series March - August
4 Blood Father Feature Mid-May - June
4 Outlaw Prophet TV Feature March - Mid-April
FY14 All Projects Types
12 Major Features
6 Major TV
1 Major/Other TV
0 Major Post
2 Docs
3 Minor Post
7 Minor Features
5 Minor TV
11 Shorts
3 Apps
3 Other/Info DVD/Webisode(s)
4 Music Video
1 Video Game
6 Commercial/Promos
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Fiscal Year 2013 Majors (Budgets > $1M) - Features & Television Projects
Quarters Title Type NM Production Months
1 2 Guns Feature (Partial) Mid- August – Mid- September
1,2 50 to 1; aka Wild Ride Feature Mid- September – Mid- October
1 72 Hours TV Series Mid- September – Early October
1 Sweetwater Feature Mid- July – Mid- August
1 We're the Millers Feature (Partial) Late September – Early October
2 After Hours (Night Shift) TV Pilot Mid- November – Early December
1,2 An American Girl: Saige Paints the Sky Feature Mid- October – Late October
2 Frontera Feature Mid- November – Mid- December
1, 2 Lone Survivor Feature Early October – Late November
2,3 Breaking Bad S5b TV Series Early December – Mid- March
2,3 Frank Feature Early January – Late January
2,3 Force of Execution Feature Early November – Early February
3,4 The Sixth Gun TV Pilot Late March – Late April
4 Cosmos: A Spacetime Odyssey TV Series (4 Eps.) Early May – Early June
3,4 Enemy Way Feature Early April – Late May
3,4 The Homesman Feature Late March – Mid- June
3,4 Jane Got A Gun Feature Late March – Late June
3,4 Longmire S2 TV Series Late March – Mid- September
3,4,1 (A) Million Ways to Die in the West Feature Early May – Mid- August
4 Search Party Feature Mid- June – Late June
4 The Signal Feature Mid- May – Late June
3,4,1 Transcendence Feature Mid- May – Late July
FY13 All Project Types
16 Major Features
6 Major TV
1 Major/Other TV
0 Major Post
3 Docs
5 Minor Post
8 Minor Features
1 Minor TV
9 Shorts
2 Apps
2 Other/Info DVDs/Webisode(s)
1 Music Video
1 Video Game
4 Commercial/Promos
59 Total
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Fiscal Year 2012 Majors (Budgets > $1M) - Features & Television Projects
Quarters Title Type NM Production Dates
1,2 Blaze You Out Feature September and End of November
1 Just Like A Woman Feature Mid- July – End of July
2 Jackie Feature Mid- November – Mid- December
1,2,3 The Last Stand Feature Mid- October – Early February
2 Stars Feature Early November – Late November
1,2 The Tin Star TV Pilot Late October – Early December
3 Code Name Geronimo Feature Late January – Late February
2,3,4 In Plain Sight, Season 5 TV Series Early January – Early April
1,2,3,4,1 The Lone Ranger Feature Late February – Late September
3,4 Vegas TV Pilot Late March – Mid- April
3,4 Breaking Bad S5a TV Series Late March – Late June
4 The Host Feature Mid- April – Early May
3,4 Longmire S1 TV Series Mid- March – Mid- June
FY12 All Project Types
8 Major Features
9 Minor Features
11 Post
5 Major TV
7 Doc
2 Minor TV
1 Other/Network
11 Commercial/Promo
8 Shorts
1 Webisode(s)
1 Other/Video
64 Total
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Fiscal Year 2011 Majors (Budgets > $1M) - Feature & Television Projects
Quarters Title Type NM Production Dates
1 Bless Me Ultima Feature Early October – Early December
1 Blood Brothers Feature Early October – Early November
1 Cowboys and Aliens Feature Early June – Late August
1 Fright Night Feature Late July – Early October
1 Lemonade Mouth Feature Late July – Early September
1 Let Them Shine Feature Late June- Late July
2 Ten Years Feature Mid- December – Late January
2 Tiger Eyes Feature Late October – Late November
2 The Lying Game TV Pilot Late November – Mid- December
2 The Must Be the Place Feature Early October – Late October
3 Breaking Bad S4 TV Series Mid- January – Mid- June
3 Goats Feature Mid- March – Late March
3,4 In Plain Sight S4 TV Series Late December – Late June
3 Reconstruction Pilot Late April – Mid- March
3 Truth be Told Feature Early January – Late January
3,4 The Avengers Feature Late April – Late July
4 As Cool As I Am Feature Mid- May – Mid- June
4 Gambit Feature Late June – Early July
4 Game Change Feature Mid- June – Late June
4 Longmire TV Pilot Late April – Mid- May
4 Odd Thomas Feature Late May – Mid- August
FY11 All Project Types
18 Major Features
6 Major TV
1 Major/Other TV
4 Major Post
8 Docs
5 Minor Post
7 Minor Features
4 Minor TV
4 Shorts
1 Apps
4 Other/DVD/Webisode
0 Music Video
2 Video Game
7 Commercial/Promos
71 Total
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Appendix 4
Movie Budget Production Expense Revenue
120,000,000$ 22.40% 26,880,000$
115,000,000$ 22.40% 25,760,000$
110,000,000$ 22.40% 24,640,000$
105,000,000$ 22.40% 23,520,000$
100,000,000$ 22.40% 22,400,000$
95,000,000$ 22.40% 21,280,000$
90,000,000$ 22.40% 20,160,000$
85,000,000$ 22.40% 19,040,000$
80,000,000$ 22.40% 17,920,000$
75,000,000$ 22.40% 16,800,000$
70,000,000$ 22.40% 15,680,000$
65,000,000$ 22.40% 14,560,000$
60,000,000$ 22.40% 13,440,000$
55,000,000$ 22.40% 12,320,000$
50,000,000$ 22.40% 11,200,000$
45,000,000$ 22.40% 10,080,000$
40,000,000$ 22.40% 8,960,000$
35,000,000$ 22.40% 7,840,000$
30,000,000$ 22.40% 6,720,000$
25,000,000$ 22.40% 5,600,000$
20,000,000$ 22.40% 4,480,000$
15,000,000$ 22.40% 3,360,000$
10,000,000$ 22.40% 2,240,000$
5,000,000$ 22.40% 1,120,000$
Revenue Assumptions Table - Film Production
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Appendix 5
Parcel #2
Parcel #4
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Parcel #6
Parcel #9
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Appendix 6
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Appendix 7
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Appendix 8
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Appendix 9
AECOM Proposal and Scope of Services
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Appendix 10
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BIBLIOGRAPHY Carnwath, John. The Bottom Line on Film Tax Credits. 8 January 2014. 19 March
2015. <http://createquity.com/2014/01/the-bottom-line-on-film-tax-
credits/>.
FilmL.A. Research. 2013 Feature Film Production Report. Market Research.
www.filmla.com. Los Angeles: FilmL.A. Research, 2013.
Petrillo, Nick. Movie Studio Rental in the US. Research. New York: IBIS World, 2014.
Selznick, Dr. Barbara. "Television Viewing." Introduction to Industry Practices.
Tucson: The University of Arizona, 4 March 2014. PowerPoint Presentation.
Strauss, Bob. "Why TV, film production is running away from Hollywood." Los
Angeles Daily News 4 January 2014.
Turk, Sarah. Movie & Video Production in the US. Market Research. New York: IBIS
World, 2013.
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