7 0 . 7 M e d ia
G r o u p , LLC
Ab re te Bus s P n
b via d ine s la
Fina ia Ove w
nc l rvie
(Se a c m a
e c o p nyingd c e fo thec m le
o um nt r o p te
b ine sp n.)
us s la
70.7 Media Group, LLC (70.7) will capitalize on the ever-evolving
entertainment market across the world. Through the production and
promotion of high quality entertainment we will introduce
innovatively superior artists and products into the general market,
in an effort to revolutionize and revitalize the entertainment
industry. Located in Atlanta, Georgia, the company will become
highly profitable through the sale of pre-recorded music product,
videos, and various products used in the mass marketing of our
70.7 will own and control the masters (master copies), copyrights
and licenses of its product, which will enable 70.7 to create
immediate revenue streams while growing its music catalog into a
multi-million dollar asset.
.7 ffilia s
2009 CES in Las Vegas, NV
P ic t u r e L - R J No uc J p n Exe . Dir.(P rte ri Ho ing )/ Ra Se (K-1 He vyw ig
in g hi; a a c a ne ld s y fo a e ht
C m ), / To o
ha p m hiroMa / K e n n e t h G . M c L e n d o n , II ; C h a ir m a n / C E O (7 0 . 7
M e d ia G r o u p , L L C ) , / J Ike a(P rte ri Ho ing ), / MikeIke a Exe utiveAd o
im d a ne ld s d; c vis r
(P rte ri Ho ing ), /W e Va e m ; Ac r (Tha 70 Sho ), / C
a ne ld s ilm r ld rra a to t 's w hrisGa CEO (S1 Aud )
70.7's Chairman, Kenneth Goldwire McLendon, II, has spent the last 14 years working alongside some of the
entertainment industry's most well-known and respected figures. As an artist, writer, and talent scout for
Platinum Vibe/Casa Soul records (ATCO) in the late 90’s Kenneth worked with such artists as Sweet
Sensations and Tony Terry. There he honed his skills in production, and artist development. Kenneth recently
served as the Director of Business Administration for ITS R Media, founded by multi-Grammy award
nominated Producer Scott quot;Shavoniquot; Parker. He is now Financial Coordinator for Warner Bros. Records.
There he works closely with WBR labels, approving and forecasting budgets. Kenneth is also the direct
liaison to Nonesuch records, one of WBR’s most successful subsidiaries.
As a producer, artist, and songwriter Kenneth has shared his talents with such musical visionaries as Andre Crouch,
Paul Simon, Natalie Cole as well as legendary Grammy award winning writer/producer Keith Diamond.
70.7's Vice-Chairman, Nicole Yvette Riggins, in the past 11 years has designed a new artist/producer
development regimen that has helped to launch some of the entertainment industries most promising stars.
Some of her former clients include SEASAC's Producer of the Year and Grammy Award winning producer,
Bryan-Michael Cox; Tony Towerz formally of the group 4.0 Savvy/A&M. Ms. Riggins has worked with and
learned from the industry's most innovative administrators and has acquired from those relationships the
unique ability to retain even the most temperamental artists and producers, as well as the staff members to
support each individual. Ms. Riggins has supported the development of several new artists, focusing on each
artist as a complete person. Ms. Riggins creates a family environment with both her clients and her staff the
enables her to allow the focus of the artist and staff to create the best possible product.
7 0 . 7 M e d ia G r o u p , L L C
E x e c u t iv e S u m m a r y
C o n t’ d
70 Artis , w rs
.7 ts rite ,
2 0 NARAS P d e o the
07 ro uc r f
p d e
ro uc rs Multi-P tinumAw rd w
s e c s
ing r/a tre s
Gro b a
und re kingAlt. Ro k b nd
ye r Bryan-Michael Cox
A gne Mo a
s nic S WS
So w r/P d e (Mo a
ng rite ro uc r nic ,
Tyre e Ma )
s , rio Gra m Aw rd w
m y a inningp d e Scott
ro uc r
T. Niblack “Shavonie” Parker
C O M P A N Y D E S C R IP T IO N
In t r o d u c t io n
70.7 distinguishes itself through its commitment to each of its artists. In stark contrast to the
typical scenario in which a record company spends more money producing the music
than they do in its marketing and promotion, 70.7 will utilize a stable of experienced
and resourceful producers to ensure the highest quality product within established
production budgets. This, in conjunction will guarantee the impetus necessary to create
quot;winningquot; products in the marketplace.
70.7 will apply the traditional industry practice of cross-collateralization of deals in
which the record company secures a percentage of the profit garnered through various
revenue generating agreements secured by the company on behalf of the artist.
Each of the albums that 70.7 produces and owns will create valuable short-term streams
of revenue, with the possibility of even greater long-term revenue streams based on our
Owning and controlling the rights to each of its albums will enable 70.7 to grow its
music catalog into a valuable asset, one of several-hundred revenue producing titles
D e v e lo p in g t h e
Contact: Ken McLendon @ firstname.lastname@example.org
For further details
Asthep d t d ve p , a itsp p rity g w , 70 w s e lic ns a re m ntsw c m a s
ro uc e lo s nd o ula ro s .7 ill e k e ing g e e ith o p nie
s h a Mic s ft a Ap le
uc s ro o nd p .
It iso inte n tha theLC b c m thep a s urc fo d trib
ur ntio t A eo e rim ry o e r is utingc nte fo thee rta e
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us o w e
M a n u f a c t u r in g &
D is t r ib u t io n
A plethora of options are available to satisfy 70.7's requirement for quality manufacturing and reproduction of
compact discs, and videos. 70.7 will out source this function to one of many manufacturing outfits in the
industry. These vendors will be selected based upon quality of product, ability to meet delivery deadlines,
payment terms, inventory and storage options, as well as price. Ultimately the primary source for distributing all
70.7 music will be the LCA.
M a r k e t in g & P r o m o t io n
Among 70.7's primary goals is to design and provide innovative and effective marketing for its artists.
As music is being produced in studio, promotion and marketing strategies will be formulated that allow our artists to appeal to
diverse audiences thus increasing our revenue possibilities. 70.7 will institute its innovative cross-marketing strategies for all
their artists using new technology created by founder, Ken McLendon.
It is imperative that the marketing plan for each new release is in motion several weeks before the product is completed in
studio. 70.7 will employ multifaceted promotional strategies for its product releases including: hiring regional independent
record promoters and creating radio promotions, Internet sites, broadcast videos, dance club promotions, in-store/co-op
promotions and promotions to the general public through print, video and television mediums.
To support the sales of pre-recorded music, 70.7 will produce and release music videos for each album released by the
company. Existing affiliations in the video sector of the industry allow the company to produce top quality video productions
while minimizing budgets. At this stage, music videos will be created for 3-4 songs on the album, which will be released as
quot;singlesquot;, as a prelude to the full album release. 70.7 will contract with independent record promoters to interface with radio
station program directors and music video network directors. Public relations firms will be hired to publicize and promote 70.7
M e r c h a n d is in g
A lucrative profit generator for 70.7, merchandising opportunities will be created upon and around company
artists and products in concert venues and retail outlets, alike.
Concert merchandise (t-shirts, sweatshirts, hats, programs, posters, buttons, etc.) is typically sublicensed to a
merchandising company specializing in retail operations at large concert venues.
Retail merchandising strategies will be coordinated and planned with the assistance of advertising agencies and
public relations firms. The chief objective will be to create alliances with apparel manufacturers for 70.7 artists,
similar to the manner in which athletic shoe manufacturers attach an athlete's name or image to a particular
shoe. In this case each product is marketed in direct conjunction with the other. Of course, these opportunities
will become more readily available as the artist's reputation increases. Nonetheless, 70.7 will work to make
inroads in this realm early on as it plays an integral part in our cross-marketing scheme.
C o n c e r t P r o m o t io n
As a related means to increase exposure for the company artists, 70.7will plan and promote
several live concert shows a month. Shows will be staged at a charity of major concert venues
throughout the region. Revenues will be generated from the sale of tickets, concessions and
merchandise. Early on, the company will plan and promote two shows per month. This will
allow 70.7 the opportunity to attract outside talent to perform in the Los Angeles metropolitan
area. It is anticipated that as this division of the company grows, regional promotion contracts
will be established allowing for expansion and increased revenues.
TH E M AN AG E M E N T TE AM
G o a ls & O b je c t iv e s
The strength of 70.7's management team is derived from the blend of experience,
creativity, savvy and energy. The individuals who occupy key positions within 70.7
are dedicated and prepared to ensure 70.7's success and profitability.
C h a r it a b le
Ev e n ts
C h a r it a b le E v e n t s
• 70 s Completing the Circle Foundation w jo w
.7' ill in ith
lo a c ritie in theho e w o e c o o a tsa
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tha a d s ne to b a thec leo d a us , fa ily
t re e ig d re k yc f rug b e m
vio nc , la k o e uc tio a fina ia irre p ns ility.
le e c f d a n nd nc l s o ib
Thes c s o thisd io o o c rp ra n w b
uc e s f ivis n f ur o o tio ill e
b s do ra ingfund fro o r c rp ra s o o a
a e n is s m the o o te p ns rs s
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e s m ur rtis nd ro uc rs
T H E F IN A N C IA L
70.7 has developed a sound, conservative financial plan that provides the
founders, investors and employees the opportunity for financially capitalize.
The following paragraphs provide valuable details and insight to the figures,
which comprise the plan.
• Achieve overall positive cash flow within the 1st quarter of 2010
• Take advantage of prompt payment discounts offered by vendors
• Meet or beat target budgets for project production, promotion and corporate overhead
• Decrease the manufacturing cost per unit (CDS) to under $1.02 through volume discounts
• Meet conservative projected sales targets
• Position the company to allow investment partners, founders and employees the opportunity
to financially capitalize on 70.7's profitability.
• Maintain balance sheet attractiveness for potential public financiers and investors
• Adhere to typical industry financial ratios
• Adhere to all required federal and state laws in all aspects of the business
• Institute an employee profit sharing plan
F in a n c ia l
R a t io n a le
The financial rationale accurately describes the various assumptions,
which comprise the pro forma income statements, and statements of
cash flow. In all cases, these assumptions follow a conservative
70.7 will generate the majority of its revenue from the sale of pre-recorded music products. This includes compact
discs (CDS), LCA's™, downloads, ringtones, and ringbacks. For purposes of revenue forecasts, management has
projected varying unit volumes for each of its projects. Sales will occur within a fifteen-month time frame from the
release date. Based upon the intensity of 70.7's marketing plan/budget for its projects, the following unit
projections will be quickly attained and surpassed.
Pop/Rock Act=250,000 units/release
Hip Hop/R & B Act= 250,000 units/release
CCM Act= 125,000 units/release
Gospel Act= 125,000 units/release
70.7 will gross approximately $11.95 for each full-length compact disc sold.
Ma nufa turingo CDS w b s c ntra te . Ap lyingd c untsa ila lew la eq ntity p ha e , 70
c f ill e ub o c d p is o va b ith rg ua urc s s .7
w o ta ap eo $
ill b in ric f 1.19p r C Asunit to lsinc a e m nufa turingc s a e e te tod p10 %.
e D. ta re s , a c o ts re xp c d ro -15
Asp vio ly s te it iso inte n tha theLC b c m thep a s urc fo d trib
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o nt r
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nte inm nt us o w e
G e n e r a l & A d m in is t r a t iv e
E x p minimize G&Asexpenses in an effort
It is management's intention to
e ns e
to keep overhead expenses manageable. A list of applicable expense
items including associated monthly amounts is attached.
Statement of Cash Flow
Accounts Receivable - A/R are conservatively projected with 45% of A/R collections occurring in a 1-29
day period and the remaining 55% in a 90-120 day period. The majority of accounts receivable will be
outstanding from the distribution company, which receives payment directly from retailers and will
subsequently remunerate 70.7. Because of the extended nature of A/R in the industry (typically 60 days),
70.7 will utilize A/R Financing to assist its cash position in the first twenty-seven months of operations. A
3.5% A/R financing fee is incorporated in the financial model. The size, strength and reliability of 70.7
distribution partners will provide a traditional financial institution or an A/R factor with the proper
security to create a working relationship for 70.7's paper.
Inventory - Inventory for album releases and upcoming product has been conservatively projected.
Despite the fact that lead times for manufactured products are approximately two weeks, 70.7's financial
model calculates inventory purchases in the following manner: 30% - 60 days prior to sale and 70% - 30
days prior to sale. The majority of the pre-recorded music product will be stored with the manufacturer
and shipped directly to the distributor's fulfillment/distribution centers. A small amount of sample
(1,000-2,000 units) and promotional products will be kept on hand at 70.7 corporate offices.
Accounts payable - For purposes of this financial model, A/P is separated into two categories:
Manufacturing A/P, and Artist Royalty/Mechanical A/P. Adhering to the conservative approach, the
model is constructed with Manufacturing A/P being paid in the same month that the expense is incurred.
Artist Royalties will be accumulated and paid at close of each quarter.
Project Production Budgets - These vary depending on the genre of the project. Established relationships and
affiliations in the industry enable 70.7 to produce its projects over a ninety-day period, for less than half the
typical cost paid by a major label record company. Production budgets will begin in the range of $100,000.
Marketing & Promotion Budgets - These vary depending on the particular genre of music.
At 70.7 the marketing and promotion of a project is as vital to the project as the recording of the music. Projects
produced and released will be allocated approximately $700,000. Marketing budgets will be expired through
the course of fifteen-month marketing campaigns.
The following assumptions are made in the projected Balance Sheets.
Cash- The financial model is designed to portray the accumulation of cash in the company. Cash outlays relating
to dividends on common/preferred stock, employee profit sharing, and capital expenses, etc., have been
intentionally not included. Moreover, the plan does not address the tax implications of quot;holdingquot; this amount of
Property & Equipment- Property and equipment acquisitions include initial office equipment, pre-production
studio equipment, executive residence and leasehold improvements (office/studio).
70.7 is offering options to cater to short and long-term investor needs and requirements. 70.7 seeks to keep the structure
of the financing simple and flexible. 70.7 is prepared to offer a package consisting of debentures, and profit
70 Me iaGro w c p lizeo thee r-e lvinge rta e m rke a ro sthew rld Thro h the
.7 d up ill a ita n ve vo nte inm nt a t c s o . ug
p d tio a p m tio o hig q lity e rta e w w re lutio
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e rta e e c nica c ns e e c nicind trie .
nte inm nt, le tro nd o um r le tro us s
70 7 ha e re intoave a a re m nt w P rte ri Ho ing . P rte ri Ho ing isthea
. ve nte d rb l g e e ith a ne ld s a ne ld s utho d
b ke fo s h c m a sa So nk/GTE, Mic b a , a Sync Aud . Thro h thisre tio hipo
ro r r uc o p nie s ftBa ro o rd nd 1 io ug la ns ur
c m a w b c m hig p fita lethro h thes leo itste hno g a a va e e , p -re o e
o p ny ill e o e hly ro b ug a f c lo ic l d nc m nts re c rd d
m ic m jo m tio p turep d tio , a a n a w ll a thro h va uss te ica q itio . Ba e
us , a r o n ic ro uc ns nim tio s e s ug rio tra g c uis ns sd
o re e p fitss te e 70 a s e
n c nt ro ta m nts .7 re e king$2 m n in ve
3 illio nturec p l inve tm ntsfo thise iting
a ita s e r xc
c m a The efund w b us dto
o p ny. s s ill e e :
e ta lis c rp ra o e ,
s b h o o te ffic s
m inta o rhe de e e ,
a in ve a xp ns s
c uirea s c re o inga ts
nd e ure c rd rtis
fund p je t p d tio b g ts
ro c ro uc n ud e
fund multi-fa e dm rke
c te a tinga p m tio b g ts
nd ro o n ud e
d ve pte hno g a a va e e (LC
e lo c lo ic l d nc m nts A)
O u t lin e d b e lo w is a b a s ic o v e r v ie w o f t h e u s e o f
f u n d s o v e r a 5 -y e a r s p a n .
To l Us o Fund
ta e f s
Executive Staff (8): $90k per x 5 yrs = $3.6 million
Artist Advance (3) (recoupable): $60k 1 $180k
Producer Staff (4): $60k per x 5 yrs $1.2 million
Admin. Staff (5): $65k per x 5 yrs = $1.625 million
Typical Artist Budget 15 mo. Campaign $1.95 million
(varies): $650k x 3=
Overhead (utilities, mortgages, not including $5.6 million
payroll) x 5 yrs =
5 yr Total = $14.155 million
P r e - P r o d u c t io n
E q u ip m e n t f o r P r e -
P r o d u c t io n S t u d io (2
Ro o m s )
1 Neumann U87Ai Large Diaphragm Microphone @ $3200
2 Bluebird Condenser Microphone @$300 $600
10 Boom Stands @$50 $500
6 Chairs@ $100 $600
2 Console Units @$1500 $3000
5pc. Lounge Furniture @ $5000
10 Pop Screens @$20 $200
2 Crown Power Amp @$700 $1400
1 Logic Software $500
1 Waves Mercury Bundle (Software) $12900
1 Sound Patch Software $6000
2 Laser Printer @$150 $300
2 Macintosh Computer @$1600 $3200
4 Mac Compatible Displays @$400 $1600
2 Sofa @$2000 $4000
4 Yamaha HS80M Monitors @$350 $1400
2 Yamaha HS80M (Sub) @$500 $1000
4 Event Monitors @$1500 $6000
2 Mackie Big Knob Studio Command Center @$300 $600
2 Mackie HR824 speakers @$600 $1200
40 Misc. Audio Cords @$5 $200
40 Misc. Midi Cords @$5 $200
Total Pre Production Equipments $53,600
Gra To l: $ 2 75 15
nd ta 2 ,0 ,2
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