Post by Ace on Sept 14, 2004 16:06:43 GMT -5
For an interesting article on the valuation of the Bond Franchise as part of MGM:
The Financial Times via Hoover News Service
There's a price on James Bond's head and it could be $1bn, making him one of the most valuable cinema properties on earth.
MGM, is about to change hands and this weekend prospective buyers are assessing the worth of the studio's most valued asset: James Bond. Accountants are finding that Bond, as a brand, is as indestructible as the secret agent is on the screen.
Ever since he was first licensed to make a killing back in 1962, Bond has been raking it in like a casino croupier. Not only does each new film attract a large audience, the old adventures are also regular money-spinners through television syndication. They are therefore an important part of MGM's extensive library, the asset that Sony and Time Warner both want.
This week, MGM's current owner, Kirk Kerkorian, is expected to decide which of these two rival bids he will accept. The ballpark figure being bandied about is $4.6bn or $4.7bn.
Here is what the number-crunchers calculate. The library, with its 4,100 titles, generates about $450m (pounds 250m) a year. That translates into a value of about $3.6bn, based on the standard formula of eight times cashflow for libraries. This means the other billion or so being talked about in the sales negotiations has to come from continuing production.
Bond, admittedly, is not quite alone in the MGM stable. But even setting aside about $100m or so for the future prospects of the Legally Blonde comedies, starring Reese Witherspoon, 007's net worth is deemed to be a cool nine figures.
That $1bn figure would put him well ahead of Harry Potter, which is not expected to have anything like the current 40 years' shelf life of Bond.
But is 007 really worth a billion bucks? Can Sony or Time Warner proceed with the purchase with a clear conscience, or might the value of an ageing chauvinistic spy with a penchant for corny one-liners yet get in the way of a final handshake?
Expert opinion is divided. Douglas L Lowell, a longtime industry analyst, puts Bond's value at a paltry $623m. His calculation includes both the windfall of each new movie, plus the revenue generated as the back catalogue - 20 films in all - is repackaged in DVD form for a further revenue stream of $25m-$50m a year.
Another expert, Hollywood veteran Amir J Malin, is more bullish. He figures that the next four Bonds alone are worth $500m, assuming a profit of at least $125m per release. Given a solid commitment to Bond by MGM's new owner, Mr Malin thinks the billion-dollar overall figure is not unreasonable.
There are several unknowns, however. Bond was struggling badly in the early 1990s when Roger Moore finally retired those raised blond eyebrows and Timothy Dalton did a less than stellar job of substituting his own black bushy ones. Much of the series' current success is attributed to the casting of Pierce Brosnan, who came on board in 1995.
Brosnan, though, has apparently made his last Bond film, telling the US magazine Entertainment Week that the role is "another lifetime behind me". A successful replacement will need to be found (possible contenders are said to include Hugh Jackman and Orlando Bloom).
Replacing the lead, in turn, raises the question of whether to update the series or let it continue its steady progress into pleasant anachronism. MGM has been struggling at the bottom of the Hollywood studio heap for some years. This parlous situation would have been a whole lot worse had it not been for the reliable earning power of Bond, an asset first acquired in the early 1960s and still going improbably strong five leading actors later.
The Financial Times via Hoover News Service
There's a price on James Bond's head and it could be $1bn, making him one of the most valuable cinema properties on earth.
MGM, is about to change hands and this weekend prospective buyers are assessing the worth of the studio's most valued asset: James Bond. Accountants are finding that Bond, as a brand, is as indestructible as the secret agent is on the screen.
Ever since he was first licensed to make a killing back in 1962, Bond has been raking it in like a casino croupier. Not only does each new film attract a large audience, the old adventures are also regular money-spinners through television syndication. They are therefore an important part of MGM's extensive library, the asset that Sony and Time Warner both want.
This week, MGM's current owner, Kirk Kerkorian, is expected to decide which of these two rival bids he will accept. The ballpark figure being bandied about is $4.6bn or $4.7bn.
Here is what the number-crunchers calculate. The library, with its 4,100 titles, generates about $450m (pounds 250m) a year. That translates into a value of about $3.6bn, based on the standard formula of eight times cashflow for libraries. This means the other billion or so being talked about in the sales negotiations has to come from continuing production.
Bond, admittedly, is not quite alone in the MGM stable. But even setting aside about $100m or so for the future prospects of the Legally Blonde comedies, starring Reese Witherspoon, 007's net worth is deemed to be a cool nine figures.
That $1bn figure would put him well ahead of Harry Potter, which is not expected to have anything like the current 40 years' shelf life of Bond.
But is 007 really worth a billion bucks? Can Sony or Time Warner proceed with the purchase with a clear conscience, or might the value of an ageing chauvinistic spy with a penchant for corny one-liners yet get in the way of a final handshake?
Expert opinion is divided. Douglas L Lowell, a longtime industry analyst, puts Bond's value at a paltry $623m. His calculation includes both the windfall of each new movie, plus the revenue generated as the back catalogue - 20 films in all - is repackaged in DVD form for a further revenue stream of $25m-$50m a year.
Another expert, Hollywood veteran Amir J Malin, is more bullish. He figures that the next four Bonds alone are worth $500m, assuming a profit of at least $125m per release. Given a solid commitment to Bond by MGM's new owner, Mr Malin thinks the billion-dollar overall figure is not unreasonable.
There are several unknowns, however. Bond was struggling badly in the early 1990s when Roger Moore finally retired those raised blond eyebrows and Timothy Dalton did a less than stellar job of substituting his own black bushy ones. Much of the series' current success is attributed to the casting of Pierce Brosnan, who came on board in 1995.
Brosnan, though, has apparently made his last Bond film, telling the US magazine Entertainment Week that the role is "another lifetime behind me". A successful replacement will need to be found (possible contenders are said to include Hugh Jackman and Orlando Bloom).
Replacing the lead, in turn, raises the question of whether to update the series or let it continue its steady progress into pleasant anachronism. MGM has been struggling at the bottom of the Hollywood studio heap for some years. This parlous situation would have been a whole lot worse had it not been for the reliable earning power of Bond, an asset first acquired in the early 1960s and still going improbably strong five leading actors later.
