Investment Choices for Movies
Obviously, even though the name “Oliver Stone" was mentioned, I still didn’t trust the movie guy. First off, I was given a choice of how I wanted my investment into Escobar to work:
Guaranteed Short Return – If I took this avenue, my initial investment would stay with the LLC until all upfront capital was met, in this case $2 million. Once the LLC had the $2 million, I could receive my entire investment back plus 10%.
Try Holding Out – If I took this avenue, I was basically betting that the movie Escobar would do well and as a member of the LLC, any profits the movie made in the future, after production costs, would be sent to LLC members on a regular basis based on number of shares owned.
Option one seemed easy so I asked the movie man, how long will it take the LLC to obtain the $2 million needed and how can it afford to give me back my investment plus 10%? Apparently this is the new Hollywood trend. In order for a major studio to back a movie, even with a big name like Oliver Stone, often they must show at least some capital investment to entice the studio. Really all they needed was $1 million; the other million would be utilized to pay out investors who chose option one. Still there is no guarantee how long it will take the LLC to obtain enough investors to reach $2 million, so in essence, this is a risk you take.
For option two, you guessed it, this is a big gamble. I can think of lots of Oliver Stone movies that did great at the box office, but I also remember some duds. Now it was really time to dig deep into finding out if you can invest directly into movies.
To find investment opportunities, you’ll most likely have to call movie production companies (you know those company names you see floating as credits) and see if they have anything that is up and coming that you might be interested in.
Image Credit: (Spike Lee Wikimedia Commons)