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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

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


By

Robert Charles Ewald, Jr./Founder

I was the sole team member and am responsible of all of the content within this

Business Plan.

The Summit Studios, LLC Business Plan v.4.0

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EXECUTIVE SUMMARY


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:

[email protected]

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

http://www.thesummitstudios.com/


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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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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


6,000 ft2 Soundstage *

3,000 ft2 Soundstage/green screen 1


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


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



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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.


31 | P a g e

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.


33 | P a g e

COMPLIANCE & LEGAL STRATEGIES

Discussions with legal team revolve around corporate structure: LLC, S-Corp, or a

new structure valid since January 2015.


34 | P a g e

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


35 | P a g e

Appendix 1


36 | P a g e

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

http://nmfilm.com/nm_filmography.aspx?dirElementId=a99ad89ca71e40ad87902a334972c4de

http://nmfilm.com/nm_filmography.aspx?dirElementId=81353cf83f9243d9a1ca545647aa201f

http://nmfilm.com/nm_filmography.aspx?dirElementId=0e780d9e8bcc4de3bca8962c7497d5f8

http://nmfilm.com/nm_filmography.aspx?dirElementId=465bb9ede4f14e378dacc4913c7dc426

http://nmfilm.com/nm_filmography.aspx?dirElementId=e952fbc2c7db4d0e8cb754c95e3b3159

http://nmfilm.com/nm_filmography.aspx?dirElementId=bab04de68d3243ee90119553414eb379

http://nmfilm.com/nm_filmography.aspx?dirElementId=dda6634c77b544b28cf4a53b0ffdbec3

http://nmfilm.com/nm_filmography.aspx?dirElementId=0425c9a4e4b24141a2a1b47ff2dccd09

http://nmfilm.com/nm_filmography.aspx?dirElementId=fd31d278cd214fd08f9475ab72dd8b0a

http://nmfilm.com/nm_filmography.aspx?dirElementId=203dad46727141b2a5ee238b91b84221




http://nmfilm.com/nm_filmography.aspx?dirElementId=517dc4e28d5141d1bede1af86f4486bd

http://nmfilm.com/nm_filmography.aspx?dirElementId=503fd8e5f6fe46ce9c6192dd6b8a5323

http://nmfilm.com/nm_filmography.aspx?dirElementId=ba969639d2f4427ba665b6bbb2ea00f0

http://nmfilm.com/nm_filmography.aspx?dirElementId=ca331b27666649b89ad39de1087a230b


38 | P a g e


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

http://nmfilm.com/nm_filmography.aspx?dirElementId=89e71b35dc64431a82a0db03a92543f8

http://nmfilm.com/nm_filmography.aspx?dirElementId=b1981beb1f0c48999702bc0e50a2a5ff

http://nmfilm.com/nm_filmography.aspx?dirElementId=dec9bd4664ad492c9298aecc6fe7a9d8

http://nmfilm.com/nm_filmography.aspx?dirElementId=fae24bec240c43229beafca8f1897453

http://nmfilm.com/nm_filmography.aspx?dirElementId=6afbfb4038c546de82b7e3ee68457f5f

http://nmfilm.com/nm_filmography.aspx?dirElementId=31ace66b5f264c9786e4a8894e05a72a

http://nmfilm.com/nm_filmography.aspx?dirElementId=3f709d55aa0147fe80b92c1d7621926f

http://nmfilm.com/nm_filmography.aspx?dirElementId=968af1185bbf49db8dc18b6a48ee56f0

http://nmfilm.com/nm_filmography.aspx?dirElementId=a944fdfcda2d42dd85110068fd663035

http://nmfilm.com/nm_filmography.aspx?dirElementId=3dfc0be8252c42f89f6edc954ee80b02

http://nmfilm.com/nm_filmography.aspx?dirElementId=83224b294288493aab65b56d1eb390b7

http://nmfilm.com/nm_filmography.aspx?dirElementId=ff8a3ecefce3406f839b82f66206cd3a

http://nmfilm.com/nm_filmography.aspx?dirElementId=67fdbf8475aa4fc18ab856b57f9b8576

http://nmfilm.com/nm_filmography.aspx?dirElementId=15094eb8869d4d13ac0a09a723085e1b

http://nmfilm.com/nm_filmography.aspx?dirElementId=a57bac0d15b44aecb16b00ff50ab03f8

http://nmfilm.com/nm_filmography.aspx?dirElementId=afea35dfa0e946c2aa008b621b293fc2

http://nmfilm.com/nm_filmography.aspx?dirElementId=a393f2e276c1470d92a26d99ee728aa9

http://nmfilm.com/nm_filmography.aspx?dirElementId=fe5f7cf790604202b2b3c310f898b45e

http://nmfilm.com/nm_filmography.aspx?dirElementId=ff329bcd7e964a7bbd3c1bbf37ca3d61

http://nmfilm.com/nm_filmography.aspx?dirElementId=3073e13cbd924c978fa593ba89d7440a

http://nmfilm.com/nm_filmography.aspx?dirElementId=adec9f3ff6a4462f8709e4a7c8c0f34f


39 | P a g e


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


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

http://nmfilm.com/nm_filmography.aspx?dirElementId=48edce5d255b4d0889280a5c8c48cc2b

http://nmfilm.com/nm_filmography.aspx?dirElementId=20059eecb085485fbe5500995922dec5

http://nmfilm.com/nm_filmography.aspx?dirElementId=6c5db3f1603a408985c3a20c316f00e7

http://nmfilm.com/nm_filmography.aspx?dirElementId=b25d3e13ad69481b939a8347f1d56df5

http://nmfilm.com/nm_filmography.aspx?dirElementId=3339987612b34efe8ae9f6a9d87bd4d7

http://nmfilm.com/nm_filmography.aspx?dirElementId=ab4590be7d14453ab2ad19fc4c5801f0

http://nmfilm.com/nm_filmography.aspx?dirElementId=dde36b2fbff541368c29a57a5bff5cb4

http://nmfilm.com/nm_filmography.aspx?dirElementId=8437bb82923247a4934f69fbab681e87

http://nmfilm.com/nm_filmography.aspx?dirElementId=b39fc353a38e4b19a31cee137cf30d5d

http://nmfilm.com/nm_filmography.aspx?dirElementId=752e865f11dd4c06b640e3d3b647421a

http://nmfilm.com/nm_filmography.aspx?dirElementId=aeebdae8c6a94820bb4538e7fa5a5008

http://nmfilm.com/nm_filmography.aspx?dirElementId=ce6dbba94fda4cce96f59d0525adb45e


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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


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

http://nmfilm.com/nm_filmography.aspx?dirElementId=9f76dbcdbc0a486db04e829f3c022e8c

http://nmfilm.com/nm_filmography.aspx?dirElementId=600d01fc2410462abdfa0ab74d38cf77

http://nmfilm.com/nm_filmography.aspx?dirElementId=6b927ed3cf28489485a39ad15ddda284

http://nmfilm.com/nm_filmography.aspx?dirElementId=d045750e30d54420b2bb3eb742b44740

http://nmfilm.com/nm_filmography.aspx?dirElementId=b3c0fd4e6ff943b2b60de6f087fde287

http://nmfilm.com/nm_filmography.aspx?dirElementId=c207af1765304da4b4cd3ff24d321458

http://nmfilm.com/nm_filmography.aspx?dirElementId=85492eaed09b42edbce75381a533e8c3

http://nmfilm.com/nm_filmography.aspx?dirElementId=69377eafae0143c0874cd03e1e9f247c

http://nmfilm.com/nm_filmography.aspx?dirElementId=ab6939c3edb741c9ac2e389115c1a39d

http://nmfilm.com/nm_filmography.aspx?dirElementId=63fd6c6479ed44f4868aee038a69287c

http://nmfilm.com/nm_filmography.aspx?dirElementId=d1e3eb0f6c9a435a9187b70f7d99e7d8

http://nmfilm.com/nm_filmography.aspx?dirElementId=e04dc7fc8e164221bd1eac4ce460d199

http://nmfilm.com/nm_filmography.aspx?dirElementId=1dbcbb37b3f141688be6f6b5c7b27b9f

http://nmfilm.com/nm_filmography.aspx?dirElementId=7691bd0161524647941f709fe6d0d1ff

http://nmfilm.com/nm_filmography.aspx?dirElementId=9469bb194dc54b8c97eba70f83785ba3

http://nmfilm.com/nm_filmography.aspx?dirElementId=ec0ec129c1854ce59cf4c48b716e1e48

http://nmfilm.com/nm_filmography.aspx?dirElementId=428c9a53b4cc4779b25182b0b7e6f2c7

http://nmfilm.com/nm_filmography.aspx?dirElementId=d961aa250f0844bf93b32d60775abab0

http://nmfilm.com/nm_filmography.aspx?dirElementId=5d29d9c1d40c440ea803f66c12dedb3e

http://nmfilm.com/nm_filmography.aspx?dirElementId=d0c3eb67fd314b0c9494262787246cab

http://nmfilm.com/nm_filmography.aspx?dirElementId=3a051e2aa03a461f81089799a299ee49


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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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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.