Entertainment Industry Economics: A Guide for Financial Analysis

Half-title......Page 3
Title......Page 5
Copyright......Page 6
Dedication......Page 7
Contents......Page 9
Preface......Page 21
Part I: Introduction......Page 27
Leisure and work......Page 29
Recreation and entertainment......Page 30
Expansion of leisure time......Page 31
Productivity......Page 35
Demand for leisure......Page 37
Expected utility comparisons......Page 39
Demographics and debts......Page 40
Barriers to entry......Page 41
Marginal matters......Page 43
Public good characteristics......Page 46
1.4 Personal-consumption expenditure relationships......Page 47
Structures......Page 51
Segments......Page 52
1.6 Valuation variables......Page 56
Comparison methods......Page 57
1.7 Concluding remarks......Page 58
Notes......Page 60
Selected additional reading......Page 65
2.1 Psychological roots......Page 67
Laws of the media......Page 68
Network features......Page 70
Limitations and concentration issues......Page 72
Agent of change......Page 73
Long tail effects......Page 75
2.5 Advertising......Page 77
Functionality......Page 78
Economic and business aspects......Page 79
Valuation......Page 81
Notes......Page 82
Selected additional reading......Page 91
Part II: Media-dependent entertainment......Page 95
3 Movie macroeconomics......Page 97
3.1 Flickering images......Page 98
Evolutionary elements......Page 100
Pecking orders......Page 104
Admission cycles......Page 106
Production starts and capital......Page 109
Market-share factors......Page 112
Collateral factors......Page 113
Financial aggregates......Page 120
3.4 Markets – Primary and secondary......Page 121
Film libraries......Page 125
Real estate......Page 129
Notes......Page 132
Selected additional reading......Page 138
4.1 Properties – Tangible and intangible......Page 140
4.2 Financial foundations......Page 142
Combination deals......Page 143
Limited partnerships and tax shelters......Page 144
Bank loans......Page 146
Private equity and hedge funds......Page 147
The big picture......Page 148
Labor unions......Page 151
Distributors and exhibitors......Page 152
Marketing costs......Page 167
Profitability synopsis......Page 168
Theoretical foundation......Page 170
4.6 Concluding remarks......Page 172
Notes......Page 173
Selected additional reading......Page 198
Contract clout......Page 204
Orchestrating the numbers......Page 205
Revenue-recognition factors......Page 206
Inventories......Page 207
Amortization of inventory......Page 208
Interest expense and other costs......Page 210
Calculation controversies......Page 211
Statement of Position 00–2......Page 212
Financial overview......Page 215
Participation deals......Page 219
Distributor–exhibitor computations......Page 226
Distributor deals and expenses......Page 228
Studio overhead and other production costs......Page 230
Truth and consequences......Page 231
Feature licensing......Page 235
Program production and distribution......Page 236
Exhibitors: The beginning and the end......Page 246
5.6 Concluding remarks......Page 248
Notes......Page 249
Selected additional reading......Page 268
6.1 Feeling groovy......Page 270
Economic interplay......Page 273
Composing, publishing, and managing......Page 278
Royalty streams......Page 280
Guilds and unions......Page 282
Concerts and theaters......Page 283
Deal-maker’s delight......Page 284
Marketing costs......Page 286
Distribution and pricing......Page 287
6.4 Financial accounting and valuation......Page 289
Artists’ perspective......Page 290
Company perspective......Page 293
Valuation aspects......Page 295
6.5 Concluding remarks......Page 296
Notes......Page 297
Selected additional reading......Page 310
Technology and history......Page 313
Basic operations......Page 316
Regulation......Page 319
Organizational patterns and priorities......Page 321
Macroeconomic relationships......Page 327
Microeconomic considerations......Page 329
Variable cost elements......Page 330
Financial-accounting practices......Page 331
7.4 Valuing broadcast properties......Page 333
Interest rates......Page 334
7.5 Concluding remarks......Page 336
Notes......Page 337
Selected additional reading......Page 348
8.1 From faint signals......Page 354
Pay services evolve......Page 355
Operational aspects......Page 359
Franchising......Page 360
Revenue relationships......Page 363
Capital concerns......Page 365
Accounting conventions......Page 368
Pay-per-view......Page 369
Cable’s competition......Page 370
8.5 Valuing cable-system properties......Page 372
8.6 Concluding remarks......Page 374
Notes......Page 375
Selected additional reading......Page 382
First words......Page 386
Operating characteristics......Page 387
Books......Page 390
Periodicals......Page 393
Multimedia......Page 396
Accounting......Page 398
Notes......Page 399
Selected additional reading......Page 403
10.1 Not just for kids......Page 407
Financial flavors......Page 408
Building blocks......Page 411
10.2 Chips ahoy!......Page 412
Pong: Pre and apres......Page 414
Home video games......Page 415
Profit dynamics......Page 417
Coin-op......Page 418
10.4 Concluding remarks......Page 419
Notes......Page 420
Selected additional reading......Page 427
Part III: Live entertainment......Page 431
At first......Page 433
Gaming in America......Page 434
Macroeconomic matters......Page 445
Funding functions......Page 447
Regulation......Page 448
Financial performance and valuation......Page 449
Principles......Page 450
Terminology and performance standards......Page 452
Marketing matters......Page 455
Cash and credit......Page 457
Procedural paradigms......Page 458
11.5 Gambling and economics......Page 460
Notes......Page 462
Selected additional reading......Page 469
Early innings......Page 474
Media connections......Page 476
The wagering connection......Page 478
Revenue sources and divisions......Page 479
Labor issues......Page 481
Tax issues......Page 482
12.4 Sports economics......Page 485
12.5 Concluding remarks......Page 488
Notes......Page 489
Selected additional reading......Page 498
13.1 Audiences and offerings......Page 505
Commercial theater......Page 506
Orchestras......Page 512
13.2 Funding sources and the economic dilemma......Page 513
Production financing and participations......Page 516
Operational characteristics......Page 518
Organizational features......Page 520
Price discrimination......Page 521
13.5 Concluding remarks......Page 522
Notes......Page 523
Selected additional reading......Page 529
Gardens and groves......Page 534
Modern times......Page 535
14.2 Financial operating characteristics......Page 536
14.3 Economic sensitivities......Page 541
14.4 Valuing theme park properties......Page 543
14.5 Concluding remarks......Page 544
Notes......Page 545
Selected additional reading......Page 546
Part IV: Roundup......Page 549
15.1 Common elements......Page 551
15.2 Public policy issues......Page 554
15.3 Guidelines for evaluating entertainment and media securities......Page 555
15.4 Final remarks......Page 559
Appendix A: Sources of information......Page 561
Blackjack......Page 563
Craps......Page 564
Baccarat......Page 566
Slots......Page 567
Poker......Page 568
Pai gow, fan tan, and sic bo......Page 569
Trente-et-quarante (Rouge et Noir)......Page 570
Lotteries......Page 571
Sports book......Page 572
Notes......Page 574
Appendix C: Supplementary data......Page 575
Glossary......Page 589
References......Page 613
Index......Page 653