Galileo Films
BUSINESS PLAN
“BEN AND JAKES BIG DEAL”
Independent
Feature Film
Contact:
Charese Mongiello
951-833-8498
Fax
Smmerdream@hotmail.com
Information contained in this business
plan is confidential and proprietary to (Galileo the “Company”) and is intended
only for the persons to whom it is transmitted by the Company or its
representatives. Any reproduction of
this document, in whole or in part, or the divulgence of any of its contents
without the express written consent of the Company, is prohibited.
This is a business plan. It does not imply and shall not be construed
as an offering of securities.
Prospective investors are not to construe the contents of this document
as investment, legal or tax advice from either the company or the preparers of
this document. Any prospective investors
should consult with professional investment advisors and gain professional
legal and tax advice. Representations,
elements, methodology, budget, income, structure and other projections in this
business plan, while presented in good faith, may change, subject to emerging
market, finance, timing and other factors.
Each potential investor specifically
understands and agrees that any estimates, projections, revenue models,
forecasts or assumptions are by definition uncertain and thus possibly
unreliable. Any party considering a
transaction with the Company agrees to look solely to its own due diligence.
-Confidential-
Confidentiality Agreement
The undersigned reader acknowledges that
the information provided by Galileo in this business plan is confidential. Therefore, the undersigned reader agrees not
to disclose any of such information without the express written permission of Galileo.
It is hereby acknowledged by the
undersigned that the information to be furnished in this business plan is in
all respects confidential in nature (other than such information which is
already in the public domain through other means) and that any disclosure or
use of same by the undersigned may cause serious harm or damage to Galileo.
Upon request, this document is to be
immediately returned to Galileo. Please
copy the signature page and fax to 704-625-0402 to the attention of Charese Mongiello.
______________________________________________
Signature
______________________________________________
Print Name
______________________________________________
Date
TABLE OF CONTENTS
Confidentiality
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 1
INTRODUCTION
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 4
I.
THE PICTURE
1.1 Synopsis . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.2 Biographies of Principals . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . 6
1.3 Biographies of Creative Team . . . . . .
. . . . . . . . . . . . . . . . . . . . . 8
1.4 Company Profile . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 9
1.5 Strategic Partners . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 9
II. CAST
PROJECTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
III. MARKETING
& DISTRIBUTION STRATEGY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1 Production Elements . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Target Markets………. . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . 11
IV.
INVESTMENT
V. FINANCIAL
PROJECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.1 Definitions . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Potential Income Projections . . . . . .
. . . . . . . . . . . . . . . . . . . . . 17
APPENDIX
A. Participation Agreement
B. Script / Outline
C. Budget
Introduction
“Art is the quality of communication.”
L.R.H.
“Having studied Shakespeare, Stanislavski, the
ancient Greeks, as well as many modern day artists, my inspiration and purpose of
being a filmmaker is to reintroduce “art” back into the filmmaking process by
creating stories that communicate to all audiences, in every culture across the
globe.
The story I wish to tell is entitled “Ben and
Jakes Big Deal,” a coming-of-age story about two young men learning how to deal
with life’s circumstances. A comical tale in its essence, with a classical
structure, but with a modernized twist. The
art is how the experiences between the two teenage boys, who are put into the
strangest of circumstances, penetrates the viewer in a positive and entertaining
way and pulls at the heartstrings of all ages simultaneously. Relating to the
“classics,” the premise is the same, just the telling is modernized. This
story, I hope, will help boys become men, adults to see teenagers in a new
light, and women to appreciate the right of passage of the opposite sex.”
Charese Mongeillo
Writer/Director/Producer
The Picture
1.1 Synopsis
BEN AND JAKES BIG DEAL
Faced with the prospect of becoming millionaires
two young men Ben and Jake, with the help of their best friend _____________, must
learn how to deal with the myriad of characters that enter their life who are
all after their fortune in one way or another. Akin to Shakespeare’s “King
Lear” or Oliver Goldsmiths “Good Natured Man,” this film is a sharp twisted
comedy with a touch of “Valpone,” that allows one to see the comedy in peoples
lives.
BEN AND JAKES BIG DEALK is about money, power,
and greed mixed with the innocence of young men and their struggle to grow up,
amongst insane people and situations that only Capitalism feeds.
1.1 Biographies of Principals
DIRECTOR - Charese Mongiello
As a spirited five-year old expelled from Kindergarten for not
following the rules, Charese has lived a carefree actors’ life from the time
that she was six years old. She starred in numerous commercials and was awarded
the Silver Rooster Award for acting.
After attending the
PRODUCER - Michelle Alexandria
Growing up in
Priscilla Barnes (Three’s Company).
Fluent in French and Farsi, Michelle has international contacts and has
traveled frequently to film festivals around the globe including
EXECUTIVE PRODUCER - Bob Mongiello
Bob is a successful entrepreneur and owner of several
businesses in the retail and manufacturing industries. He enjoys helping new entrepreneurs start and
grow their businesses and is an expert troubleshooter. Branching into the world of entertainment as
owner of Galileo Films, Bob oversees the production of feature films, including
BEN AND JAKES BIG DEAL.
CO-PRODUCER - Jon Bessire
Jon has been an actor for 15 years following his debut in a national commercial for the US Army. He studied theatre at the University of Denver
1.3
Biographies of Creative Team
EDITOR - Ed Bannon
Ed has been editing movies for over 40 years and
was the owner of one of the largest sound editing studios in
DIRECTOR OF PHOTOGRAPHY - Michael Bail
Michael first picked up the camera at the
age of 13 and has never put it down since. He began with short films and by 17
started filming his first feature, raising funds from relatives, family, neighbors
and friends. He premiered this film to a sold out theatre and soon afterward was
accepted into
1.4 Company Profile
The Management team behind Galileo Films has a
strong classically trained background in theatre performance and production. The
Company has connections within the production community and can exploit various
discounts made available to them for production equipment rental. This allows
for the production to utilize cameras, set lighting and grip equipment used by
the studios for a fraction of the cost, allowing for a higher production value
for an independent film.
Similarly, partnering with a marketing
consultant early on to create a highly-targeted marketing plan for BEN AND
JAKES BIG DEAL is expected to create heightened interest in the film from
audiences and potential distributors.
Planning in advance, from pre-production on, will help to position the
film correctly into the marketplace.
1.5 Strategic Partners
INDIEMARKETING
– IndieMarketing partners with
filmmakers over the entire life-cycle of a production, to provide strategic
marketing consulting and implementation of a customized plan to professionally
brand and position the film for sale to the marketplace and who will work as a
sales agent to secure distribution.
3 SIDES ENTERTAINMENT has partnered with Galileo to provide over $100,000 worth of production equipment including cameras, lenses, and lights.
ANTHONY
MONGIELLO PHOTOGRAPHY – One of
the best photographers in LA is handling unit photography and graphic services
for the marketing of the film.
CAST PROJECTIONS
Currently, the production has cast the roles of Ben and
Jake with unknown actors, yet strong in their ability to play the character
roles. Budget constraints restrict the purchase of a name talent, however, if
funding can be raised, either role can be replaced with a notable star. This star-power has obvious benefits and is
preferred.
MARKETING AND
DISTRIBUTION STRATEGY
3.1
Production Elements
Produced in the professional standard High Definition
format on the RED camera, with an experienced, highly-skilled crew, and with a
full complement of production rentals provided gratis from the partnership with
3 Sides Entertainment, this independent production shall be on par with larger
budgeted productions in quality and result.
Production management of the film and crew members,
including such key personnel as Director of Photography and Editor have been
drawn from a pool of highly-accomplished individuals, many of whom customarily
work both at Studios and Independently-produced and financed productions.
3.2 Target Markets for BEN AND JAKES BIG DEAL
A highly-focused niche marketing campaign for this film is
planned. During the campaign, we along
with our distribution partners, will identify and target individuals and market
clusters most likely to see and appreciate the film. With the assistance of the
marketing consulting firm IndieMarketing, we will from the start of
pre-production be branding and targeting the film to its niche audience. As the film is completed, it will be ready to
launch into the marketplace completely branded as a competitive film.
This film is being targeted to predominantly to Men 14 – 34
demographic, which is the highest spending movie-going demographic. However, the film will appeal to Women in the
same age group, as Comedy’s are often well received date movies. As a comedy feature film rated PG-13,
domestically it will play in all markets/cities for both a theatrical and/or
home video release.
A smaller target audience would be Shakespearean
aficionados who will pick up on the underlying theme running through the film. This is a higher brow cultural segment and
will subtly be marketed to by the tagline for the movie. Typically, university students and higher
education institutions would be a good target, and by concentrating
advertising/promotions here will reach both the primary and secondary target
markets.
INVESTMENT OPPORTUNITY
Based on a proposed budget of one hundred and eight
thousand dollars ($108,000), the Company is currently seeking a maximum of one
hundred and eight thousand ($108,000) and a minimum of forty thousand ($40,000)
in capital to fund the production and initial P&A of the project. The Company proposes to secure all of its
funds from qualified private investors.
To date, $58,000 in labor and equipment has been committed to the
project from our strategic partner Swan Pictures.
A total of approximately 108 units at $1,000 per unit will
be available to the investor. The
Principals reserve the right to accept investments smaller than one unit. Each unit shall comprise an ownership
interest in the Producer’s Net Profit of the film (as defined in the
Participation Agreement, attached hereto as Exhibit A, and as defined in
section 5.1 of this document.) Galileo
shall also pay to the investor a non-cumulative interest rate of twelve percent
(12%) per annum. After payment of film
production salaries and expenses, interest shall be paid to the investors until
the accrued amount of interest at a rate of 12% per annum is repaid from cash
flow. Thereafter, principals and
investors will share Producer’s Net Profit on a 50/50 basis. These profits will be distributed pari passu
(or concurrently) among principals and investors. Participating investors shall have no
obligation to fund the project above and beyond their original investment. Cost savings, if any, as a result of
Distributor advances, assumption of marketing expenses and/or other related
savings, will be repaid to the investors on a pro rate basis as a return on
their investment.
Related Statements
Investment in the motion picture industry is highly
speculative and inherently risky. There
can be no assurances of the economic performance of any motion picture, since
the revenues derived from the production and distribution of a film depend
primarily on its acceptance by the viewing public, which is a factor that
cannot be predicted. The commercial
success of a picture also depends on the quality and acceptance of competing
films released into the marketplace at or near the same time, general factors
such as the economic climate, and other tangible and intangible factors.
During the casting process, we intend to sign one or more
quality “name” and/or readily recognizable characters to our cast.
Galileo also plans to increase opportunities for success by
ensuring that other production values are high as well. By planning a High Definition film
production, Galileo will be utilizing the professional standard film format as
well as professional sound with the most expensive equipment and editing format.
Tax Implications
The federal American Jobs Creation Act of 2004 contained
provisions regarding tax benefits to investors in qualified film and television
productions; chief among these is the opportunity to “expense” up to 100% of
the pro rata direct and indirect costs of production in the year they occur,
rather than requiring them to be “capitalized” over time. This may provide advantages to some investors. Section 181, as it is commonly referred to,
is scheduled to end as of December 31, 2009.
As long as one day of principal photography is shot, before or on
December 31, 2009, the investor may qualify for the write-down. Interested parties are encouraged to consult
a professional tax advisor regarding this and other possible tax implications.
Risk Factors
Investing in a feature film is a high-risk endeavor. Although many independent feature films have
achieved substantial financial returns on investment, more have not. No investment should be made in a feature
film without considering the possibility of losing some or all of invested
funds.
FINANCIAL PROJECTIONS
5.1 Definitions
Distributor’s Gross Profit.
The total sum of gross revenues an outside distributor receives from all
financial sources worldwide, before recouping any of its expenses. Revenue disbursements if an outside
distribution agreement is reached, are typically as follows: (i) the distribution
fee; (ii) P&A (Print and Advertising) expenses; (iii) any additional
distribution costs incurred by the distributor.
On average, the distribution fee of a distributor charges
for distributing a film internationally may be slightly higher than its
domestic counterpart. We have assumed a
domestic distribution of 25% for a full distributor theatrical release
agreement, after suitable advances or purchase of allocated rights have been
paid to the Company. P&A expenses
and sub-distribution expenses are generally handled by the specific buyer in
the territory for which the rights to the picture are being licensed. The domestic distributor receives a royalty
fee for the specific right being licensed to the buyer, plus a percentage of
the net due to it after the buyer recovers its costs. Typical distribution expenses are the
expenses incurred by the distributor in taking a film to the many international
markets for the sale or license of the rights to the picture to international
buyers.
Producer’s Net Profit.
All monies actually received by Company from all sources worldwide from
the exploitation of the Picture, after first deducting the following items in
the following order of priority on a continuing basis:
(i) Distribution
fees retained by the distributors of the Picture including fees associated with
domestic and foreign box office distribution, and all other non-box office
distribution;
(ii) all actual and
reasonable out-of-pocket distribution, advertising, promotion and marketing
costs and expenses and expenses incurred by the distributor;
(iii) all taxes, duties, tariffs and similar costs required
to be paid by Company in connection with the exploitation of the Picture, to
the extent actually paid by Company; and
(iv) all applicable
payments required by any union, guild or collective bargaining agreement with
respect to the Picture, to the extent actually paid by Company.
Production Cost (Budget).
The Production Cost covers only those expenses incurred which leave the
Company with a master print of the film.
All marketing costs are included under P&A (Prints and Advertising.)
Producer / Investor Return on Investment (ROI). This term represents projected revenue after
the distributor’s fees and expenses, if any, have been deducted.
US and Foreign Box Office Gross. Several films which have comparative values
in any of the following categories:
story, shooting style, budget, production value, distribution or
marketing method, target audience, etc. were examined for purposes of the
financial projections.
|
Napoleon Dynamite (2003, Jared Hess) Box
office $44M / Budget $400K Dazed and Confused (1993) Box office $9M
/ Budget <$1M Fast Times at Ridgemont High (1982) Bo
office $27M / Budget <$5M |
Exhibitor Share. A
calculation of 50% of the box office, industry standard, was used for the
projections. In the case of a
Company-distributed film, i.e. “fourwalled” exhibitions, however, the
“Exhibitor Share” would be reduced or eliminated, with that cost ranging from
0-10% of the box office receipts.
Gross Film Rentals.
A calculation of 50% of the box office, industry standard, was used for
the projections. Company “four-walled”
distribution, however, would increase this figure to 90-100% of box office
receipts, a positive ratio for the Company.
Pay Cable Revenue.
Based on standard contractual patterns, which state that at performance
levels of the box office, the first-run cable contract will provide fees
calculated as step percentages of the rentals.
We have assumed a distributor fee of 20%.
PPV and Non-Theatrical Venues. Typically low for the limited distribution
spectrum, but at higher performance levels, this market adds value to the
production. Included in this
calculation is Pay-per-view, Video on Demand, internet downloads and other ancillary
avenues including airlines, institutional screenings, etc.
Commission and Fee Assumptions. A 25% Distributor fee for Theatrical
Exhibition is presumed. Commissionable
sales for Foreign Box Office and Foreign Video Sales presumes a 35% Distribution
fee. DVD Sales Commissions/Licensing
etc. are based on a 70% fee.
5.2 Potential Income Projections
The revenue models contained in this document are based on
certain assumptions of fact and are presented for illustrative purposes only
and do not represent a forecast of the anticipated results of the Company’s
operations. Potential investors must
recognize that the projections are only estimates, are not guaranteed, and
should not be relied upon by any investor in connection with the Company. No independent audit or review of the
financial projections or assumptions has been performed.
The following Charts project possible revenue for the Film
with each scenario having a low, medium and high estimate.
A 25% distributor fee for Theatrical Exhibition is
presumed. For cable and free TV we have
assumed a 20% distributor fee.
Commissionable sales for Foreign Box Office and Foreign Video Sales
presume a 35% Distribution Fee. DVD
sales commissions/licensing etc. are based on a 70% fee.
Because of high commission charges for a full outside distributor
agreement, the Manager expects to enter into such an agreement only if
significant theatrical venues are guaranteed.
These estimates do not project a “break-out success.” It is possible that self-distributed
theatrical release in the initial markets could generate profits to carry the
film to a broader release. Even in the
“better” case cited below, the projection is limited to 10 markets. The low case assumes theatrical distribution
ends after an initial two week release.
|
Summary |
|
|
|
|
|
Independent Feature Project with $1.5M budget |
|
|
|
|
|
(These estimates are based on the film being repped by a major
label, an indie film would be dramatically less. For a comedy film the foreign BO would be
reduced, and due to the current economy and models changing, the DVD estimate
would be lowered) |
|
|
|
|
|
Revenues by category |
|
Low Expectations |
Medium Expectations |
High Expectations |
|
|
|
|
|
|
|
Domestic BO |
|
$706,931.91 |
$1,413,863.81 |
$3,577,727.63 |
|
Foreign BO |
|
$297,205.49 |
$781,910.99 |
$1,751,321.98 |
|
Domestic DVD |
|
$253,500.00 |
$507,000.00 |
$1,014,000.00 |
|
Foreign DVD |
|
$126,750.00 |
$253,500.00 |
$507,000.00 |
|
Cable and Free TV |
|
$480,000.00 |
$960,000.00 |
$1,440,000.00 |
|
Pay Per View |
|
$420,000.00 |
$840,000.00 |
$1,260,000.00 |
|
Airlines |
|
$380,000.00 |
$1,140,000.00 |
$2,280,000.00 |
|
Hotels |
|
$350,000.00 |
$1,050,000.00 |
$2,100,000.00 |
|
|
|
|
|
|
|
Summary of Revenues |
|
$3,014,387.40 |
$6,946,274.80 |
$13,930,049.60 |
|
|
|
|
|
|
|
Development Costs |
|
$40,000.00 |
$40,000.00 |
$40,000.00 |
|
|
|
|
|
|
|
Negative costs |
|
$750,000.00 |
$750,000.00 |
$750,000.00 |
|
|
|
|
|
|
|
Total Expenses |
|
$790,000.00 |
$790,000.00 |
$790,000.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$2,224,387.40 |
$6,156,274.80 |
$13,140,049.60 |
REALISTIC BUDGET FOR INDEPENDENT FEATURE WITH
SERVICE DEAL NAME TALENT AND NAME DVD DISTRIBUTOR
|
Summary |
|
|
|
|
|
Independent Feature with name talent |
|
|
|
|
|
|
|
|
|
|
|
Revenues by category |
|
Low Expectations |
Medium Expectations |
High Expectations |
|
|
|
|
|
|
|
Domestic BO (Service Deal – 10+ cities) |
|
100,000.00 |
200,000.00 |
300,000.00 |
|
Foreign BO |
|
- |
- |
- |
|
Domestic DVD |
|
$28,000.00 |
$60,000.00 |
$100,000.00 |
|
Foreign DVD |
|
TBD |
TBD |
TBD |
|
Cable/PPV/VOD |
|
$26,000.00 |
$45,000.00 |
$80,000.00 |
|
Airlines |
|
TBD |
TBD |
TBD |
|
Hotels |
|
TBD |
TBD |
TBD |
|
|
|
|
|
|
|
Summary of Revenues |
|
$154,000.00 |
$305,000.00 |
$480,000.00 |
|
|
|
|
|
|
|
Negative (Production) Costs (your median average) |
|
$68,000.00 |
$68,000.00 |
$68,000.00 |
|
|
|
|
|
|
|
P&A Costs |
|
$25,000.00 |
30,000.00 |
$50,000.00 |
|
|
|
|
|
|
|
Total Expenses |
|
$93,000.00 |
$98,000.00 |
$118,000.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Profit) |
|
$62,000.00 |
$207,000.00 |
$362,000.00 |
Assumptions:
1. Theatrical will
be a service deal, where you buy a two-week run in independent theatres in 10
cities. Cost of service deal booker is
built in to the revenue.
2. Domestic
Distribution is estimated at 7,000 – 25,000 units sold @ $3.99 (20% of $19.95
SRP) and includes replication, fulfillment and marketing costs.
2. Cable TV
licensing will include on a minimum 2 networks with a maximum of five networks
airing ($10,000 each license) and VOD downloads from 6,000 – 30,000 @ $1.00
each.
4. Production costs
are $68,000 a median from your low and high budget estimate
5. P&A includes
prints at $2,000 each city, marketing
services, publicity, advertising in local cities
APPENDIX
For these doccuments please contact Charese Mongiello at 951-833-8498
A. Participation
Agreement (from attorney)
B. Script/outline
C. Budget / Timeline
