Hollywood is filled with glitz and glamour and most players in the industry are known for their incredible riches. Behind every Hollywood project, there are investors who put up the money needed to bring new productions to market. These faceless entertainment investors usually generate handsome returns on their capital. Investing in the entertainment industry can be quite attractive but, as with any investment, there are some complexities and risks involved that you can circumvent by partnering with a reputable entertainment investment firm. In this blog post, we will discuss some useful tips for successful entertainment investments. Read on.
Understand the Importance of Proper Research
Before investing in any entertainment project, it is important to do your due diligence by conducting proper research on the project. Factors to consider before investing include the reputation of the producer, the experience of the team involved, the script and the screenplay, and other investors on the project. Investing in someone that does not have a proven track record is like investing in a mutual fund that is managed by rookie portfolio managers. Choose a project that will appeal to a broader market as your money is more likely to perform when compared to a project intended for a niche market.
Learn About Various Investment Vehicles
There are many different ways to invest in Hollywood and the entertainment industry which could vary depending on the amount of capital you wish to risk. If you have enough money to invest, you can consider private equity and hedge funds as they can be the best direct investment in entertainment ventures. You can also go for slate funding which divides your investment into a portfolio of films rather than putting your money in a single production. This creates a proper balance of risk and returns. You can also invest in entertainment-related stocks of companies such as Lions Gate, Disney, and Viacom as they have diversified offerings that can help you mitigate some of the risks.
Understand Special Considerations and Clauses
When investing in any film project, the proposal must be produced in writing, including an arbitration clause that helps with a cost-effective resolution of disputes. It also pays to have a completion bond that helps pay for the cost overruns due to project mismanagement or poor budget forecasting. Sharing of profits should also be clearly covered in the proposal along with how the actors, writers, and director will be paid, although they are usually paid from the producer’s profit.
Partner With a Reputable Entertainment Investment Firm
Investing in the entertainment industry demands a lot of research and expertise, which is why it is recommended to partner with an established entertainment investment company such as Main Oak Capital. We have a team of experts who know the vitals of risk management in film industry investments and can help you minimize risks and maximize returns.
The Bottom Line
Entertainment investments require a great deal of work and research to be successful. Main Oak Capital is an entertainment investment firm that helps you explore direct investment options that offer high growth potential and revenue generation. To learn more about entertainment investments such as film industry investments and music industry investments, connect with one of our specialists at (972) 544- (1645) or email info@mainoakcapital.com.
