ALMIGHTY ONE SLIDE SHOW

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Investment Thesis

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ALMIGHTY ONE SLIDE SHOW

  1. 1. A L M I G H T Y ONE, LLC. M ENTERTAINMENT, LLC. One Market Street Spear Tower, 36th Floor San Francisco, California 94105
  2. 2. A L M I G H T Y ONE, LLC. 2014 - 2017 Portfolio Investment Thesis & Production Company September 5, 2013 Confidential 2013. Confidential. All Rights Reserved. 2
  3. 3. A L M I G H T Y ONE, LLC. Foreword:  On a stand alone basis, the expected returns of independent films and television series are generally difficult to predict.  The performance of a diversified portfolio, however, can be calculated within a relatively narrow range based on the historical performance of thousands of films and series released over the past decades.  Over the last 20 years, production studios have consistently generated ROIs in excess of 8% per year over the prevailing risk free rate.  M ENTERTAINMENT believes that a slate of movies and television series produced in Mexico for the Hispanic market (both, within the U.S. and throughout Latin America), can produce returns higher than those of the industry as a whole given the significantly lower production costs and the favorable market demographics, as further described herein. 2013. Confidential. All Rights Reserved. 3
  4. 4. A L M I G H T Y ONE, LLC. M ENTERTAINMENT is bringing together Mexico’s top producers, directors and post-production houses to create original content for the underserved Hispanic film & television markets… 2013. Confidential. All Rights Reserved. 4
  5. 5. A L M I G H T Y ONE, LLC. Investment Thesis 2013. Confidential. All Rights Reserved. 5
  6. 6. A L M I G H T Y ONE, LLC. 2013. Confidential. All Rights Reserved. 6 - 200 400 600 800 1,000 1,200 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Millions Historic & Projected Population in The Americas Non-Hispanic Hispanic Origin Source: The U.S. Census Bureau, Wikipedia, BlatantWorld.com As of 2010, there were 50 million Hispanics living in the U.S. and over 530 million more throughout the Americas. Over the next 35 years, nearly all of the population growth in the continent is expected to be Hispanic. Hispanics represent nearly all the growth in our continent...
  7. 7. A L M I G H T Y ONE, LLC. 2013. Confidential. All Rights Reserved. 7 Hispanics have reached critical mass in most U.S. metropolitan areas... San Francisco 25% LA 48% Phoenix 32% Dallas 30% Chicago 23% Miami 50% New York 24%Denver 22% Houston 37% Hispanics are now either the majority, or a critical mass in most major metropolitan areas of the U.S. Source: The Nielsen Company, 2011 TV Universe Estimates. HA18-49
  8. 8. A L M I G H T Y ONE, LLC. U.S. Hispanics report the highest annual movie attendance per capita... 3.5 3.7 5.3 5 0 1 2 3 4 5 6 7 8 Caucasian African American Hispanic Other Per Capita Annual Attendance by Ethnicity 2009 2010 2011 Source: Motion Picture Association of America. Over the past few years, Hispanics lead the pack attending movie theaters on average once every 2 months. 2013. Confidential. All Rights Reserved. 8
  9. 9. A L M I G H T Y ONE, LLC. Hispanics represent 22% of all domestic tickets sold, figure growing every year... 2011 Domestic Ticket Sales Caucasian Hispanic African American 2011 Total Box Office: $10.2 billion 2011 Total Moviegoers: 221.2 million 2011 Total Admissions 1.3 billion Source: Motion Picture Association of America. In 2011, Hispanics spent $2.8 billion at the domestic box office. 2013. Confidential. All Rights Reserved. 9
  10. 10. A L M I G H T Y ONE, LLC. 2013. Confidential. All Rights Reserved. 10 Mexico also represents a large & exciting market... • 115 million people & growing strong • Ranks 6th in the world in film spectators • Ranks 11th in world’s box office revenue • 5,100 movie screens 0 2 4 6 8 10 12 14 16 Japan China France U.K. India Germany Russia Australia South Korea Italy Mexico Top International Markets (2012 Box Office in US$ Billion) Source: Motion Picture Association of America & M ENTERTAINMENT estimates.
  11. 11. A L M I G H T Y ONE, LLC. 2013. Confidential. All Rights Reserved. 11 Film screens in Mexico have more than doubled in 10 years... Source: Instituto Mexicano de Cinematografía. 0 1000 2000 3000 4000 5000 6000 2000 2001 2005 2006 2007 2008 2009 2010 2011 2012 Number of Screens in Mexico
  12. 12. A L M I G H T Y ONE, LLC. 2013. Confidential. All Rights Reserved. 12 Today, 2 companies control over 80% of the screens in Mexico… Source: Instituto Mexicano de Cinematografía - Av. Insurgentes Sur No. 674, Colonia del Valle. Delegación Benito Juárez. México D.F. 03100. Teléfono 5448 5300 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Box Office Attendance Screens Theaters Other Cinemark Cinemex Cinepolis Mexican Exhibitors 2012 Market Share
  13. 13. A L M I G H T Y ONE, LLC. 0 50 100 150 200 250 300 350 2007 2008 2009 2010 2011 2012 Mexican films U.S. films Other country films 2013. Confidential. All Rights Reserved. 13 The number of films exhibited in Mexico in recent years has remained stable… Source: Instituto Mexicano de Cinematografía - Av. Insurgentes Sur No. 674, Colonia del Valle. Delegación Benito Juárez. México D.F. 03100. Teléfono 5448 5300 Films by Origin
  14. 14. A L M I G H T Y ONE, LLC. 2013. Confidential. All Rights Reserved. 14 The Mexican box office is growing at an attractive rate… 0 200 400 600 800 1000 2007 2008 2009 2010 2011 2012 Mexico’s Gross Box Office Million US$ Source: © Instituto Mexicano de Cinematografía - Av. Insurgentes Sur No. 674, Colonia del Valle. Delegación Benito Juárez. México D.F. 03100. Teléfono 5448 5300
  15. 15. A L M I G H T Y ONE, LLC. 2013. Confidential. All Rights Reserved. 15 Film distribution is fragmented... Source: M ENTERTAINMENT, LLC. 214 131 121 111 105 100 75 73 42 38 31 23 22 20 2007-2012 Titles Released by DistributorGussi Videocine Fox Sony WB UPI Disney PPI Zima Quality Alphaville Corazon Cinemas Azteca Tier 1
  16. 16. A L M I G H T Y ONE, LLC. 2013. Confidential. All Rights Reserved. 16 With many foreign and domestic players... 14 11 10 9 66 5 4 4 3 3 3 3 2 2 2 2 2 11111111 2007-2012 Titles Released by DistributorFilm House David MAC BVI Canana Imcine Mercamedia Ciel MV Films Arthouse Cosmo Fantastic Tarantula Canna DCN Decine Nat'l Geo Star Cineteca Corona Distribucine Distribution Gabriel Latina Mediaquest Urban Fest Tier 2 Source: M ENTERTAINMENT, LLC.
  17. 17. A L M I G H T Y ONE, LLC. 2013. Confidential. All Rights Reserved. 17 Home grown content in Mexico has lots of room to grow... • Despite having very strong cultural traits, the Mexican market mostly watches foreign productions subtitled or dubbed into Spanish. • Only a handful of domestic films can compete with U.S. and foreign productions. The principal limiting factors have been lack of capital and international appeal. • Prime time television is dominated by low quality soaps produced by the market’s duopoly. Recently however, the market is increasingly looking for alternatives. • Domestic and international sports make up most of the weekend programming. • Telmex could disrupt the status quo with a VOD alternative. It is however lacking original content (with similar situations developing for Netflix, YouTube and other VOD players).
  18. 18. A L M I G H T Y ONE, LLC. Latin America is poised for continued growth...  Latin America represents the fastest growing market in the world.  Latin America, excluding Mexico, adds roughly another 5,000 screens and nearly $2 billion in annual Box office sales. 2013. Confidential. All Rights Reserved. 18 % Change 11 vs. 10 % Change 11 vs. 07 U.S. & Canada -4% 6% Europe, M. East & Africa 4% 24% Asia Pacific 6% 38% Latin America 24% 86% Total 7% 35% Source: Motion Picture Association of America. $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 2007 2008 2009 2010 2011 Latin America Box Office Billion of US$
  19. 19. A L M I G H T Y ONE, LLC. In 2011, all Hispanic markets combined reached nearly $5 billion in box office sales... 2011 Hispanic Box Office (US $4.85 billion) U.S. Hispanic Market Mexican Market Rest of Latin America Source: Motion Picture Association of America.2013. Confidential. All Rights Reserved. 19
  20. 20. A L M I G H T Y ONE, LLC. Hollywood blockbusters are well received by Hispanics... Top 10 Movies by gross box office in Mexico: Movie Title Distributor Gross Mexico Release Date Release Year The Avengers (2012) Disney $61,748,523 27-Apr 2012 Toy Story 3 Disney $59,382,044 18-Jun 2010 Ice Age: Continental Drift Fox $46,845,581 28-Jun 2012 Avatar Fox $44,229,043 17-Dec 2009 Ice Age: Dawn of the Dinosaurs Fox $39,389,248 3-Jul 2009 Spider-Man 3 Sony $36,846,766 4-May 2007 Harry Potter and the Deathly Hallows (Part Two) WB $34,163,720 15-Jul 2011 The Dark Knight Rises WB $31,845,456 27-Jul 2012 Alice in Wonderland (2010) Disney $31,347,734 5-Mar 2010 Transformers 3 PPI $30,502,854 1-Jul 2011 2013. Confidential. All Rights Reserved. 20 (2007 to 2012)
  21. 21. A L M I G H T Y ONE, LLC. Mexican productions can do well too, but they are few and often lack funding & international distribution... Top 10 “Mexican” Movies by gross box office: Movie Title Distributor Box Office (US$) Release Date Release Year Y tu Mama También Warner Sogefilms $33,616,692 8-Jun 2001 El Crimen del Padre Amaro CP $26,996,738 16-Aug 2002 La Misma Luna Fox $23,311,391 20-Mar 2008 Amores Perros Nu Vision $20,908,467 16-Jun 2000 Don Gato y su Pandilla Sherlock Films $15,066,652 22-Jun 2011 Una Película de Huevos Videocine $12,597,788 21-Apr 2006 Rudo y Cursi UPI $11,091,868 19-Dec 2008 Kilómetro 31 Videocine $10,963,219 2-Feb 2007 No eres Tú Soy Yo WB $9,918,017 27-Aug 2010 Otra Película de Huevos y Un Pollo Videocine $8,583,678 20-Mar 2009 TOTAL $173,054,510 2013. Confidential. All Rights Reserved. 21 (2000 to 2012)
  22. 22. A L M I G H T Y ONE, LLC. Many of Mexico’s most successful films have been produced with budgets of less than $5 million 2013. Confidential. All Rights Reserved. 22 Movie Title Production Budget (US$) Y tu Mama También $5,000,000 El Crimen del Padre Amaro $1,800,000 La Misma Luna (est.) $5,000,000 Amores Perros $2,400,000 Una Película de Huevos $1,420,000 Kilómetro 31 $5,000,000 For example... Note: Production costs of remaining Top 10 were not published. M ENTERTAINMENT believes none exceeded $5 million.
  23. 23. A L M I G H T Y ONE, LLC. Production Company 2013. Confidential. All Rights Reserved. 23
  24. 24. A L M I G H T Y ONE, LLC. ALMIGHTY ONE, LLC. (the “Company”)  The Company will produce a multi-genre portfolio of feature films and television series capable of engaging and inspiring Hispanic audiences in the U.S. and throughout Latin America.  The Company will also be responsible for all activities related to the commercialization of its portfolio, including the negotiation of upfront minimum guarantee contracts and the execution of licensing and distribution agreements throughout the portfolio’s useful life.  The manager of the Company is M ENTERTAINMENT, LLC.
  25. 25. A L M I G H T Y ONE, LLC. Mission: To convey engaging stories that uplift the human spirit. Vision: To spearhead a renaissance of independent film and television making in Latin America. Objectives: (i) To produce a commercially successful portfolio that showcases Hispanic history, culture and folklore, and (ii) to maximize the returns generated by such portfolio by licensing its commercial rights. ALMIGHTY ONE, LLC.
  26. 26. A L M I G H T Y ONE, LLC. 2013. Confidential. All Rights Reserved. 26 Our team understands the Hispanic market and looks forward to utilizing its talent and resources to produce a commercially successful portfolio with a pan-regional appeal.
  27. 27. A L M I G H T Y ONE, LLC. The 2014 – 2017 Portfolio: Over the next 4 years, the Company seeks to produce: At a combined cost of $78 million U.S. dollars, budget that takes into consideration the substantially lower production costs and the pulling of post-production resources. 2013. Confidential. All Rights Reserved. 27 12 Feature Films Multiple genres Median. cost of $5 Mil. 3 TV Series @ 13 episodes Multiple genres Avg. cost of $2 Million
  28. 28. A L M I G H T Y ONE, LLC. Portfolio content guidelines: 2013. Confidential. All Rights Reserved. 28  We welcome films with universal themes adapted into storylines that Hispanic audiences identify with.  Stories that evoke fundamental human virtues, such as family, friendship, honor, spirituality, life wisdom.  From emerging Latin American writers covering current affairs to proven classics adapted into screenplays.  Emphasizing depth of characters over action scenes and visual effects.  Averaging production costs that mimic the top grossing Hispanic films, at around $5 million dollars.  Diversifying portfolio through multiple genre selection. Selection process:  Combined oversight of portfolio selection process.  Candidates identified by the Manager and presented to the Advisory Board.  Anticipated script development of up to 12 months based on advisory input.  Co-producers must contribute a minimum of 20% of total production budget.  Minimum production of 7 films and 1 television series based on minimum closing amount (see Term Sheet).
  29. 29. A L M I G H T Y ONE, LLC. Portfolio assets:  A short list of films and television series have passed our initial criteria, ranging from $2 to $9 million.  Actual budgets, production timelines and expected release are subject to our initial closing.  Many other films and series are currently being screened, with an ample pool of candidates across multiple genres and budgets. 2013. Confidential. All Rights Reserved. 29
  30. 30. A L M I G H T Y ONE, LLC. Expected Box Office performance: 2013. Confidential. All Rights Reserved. 30 $450 million Worldwide gross Box Office: Expected total portfolio performance, including other film-revenue and television series projections, available on a separate Excel spreadsheet.
  31. 31. A L M I G H T Y ONE, LLC.  The Company will offer qualified investors an opportunity to purchase Class A and Class B Membership Interests in the minimum aggregate amount of forty five million U.S. dollars ($45,000,000) and up to the maximum aggregate amount of seventy seven million five hundred thousand U.S. dollars ($77,500,000) in Units of $500,000 each with a minimum investment of one Unit.  A Term Sheet further describing the offering is available upon request. For further information please contact: manuel.monroy@almightyfunds.com Investment opportunity:
  32. 32. A L M I G H T Y ONE, LLC. Appendix A Luis Mandoki Luis is an acclaimed Mexican director with a prolific career that spans four decades. His films have earned Oscar nominations and several international awards. Alexander Kitman Ho Alex is an experienced filmmaker, known for blockbusters features produced in association with Oliver Stone. Manuel Monroy Petersen Manuel is a former partner and managing director at McKinsey & Co. Manuel Monroy Noriega Manuel is the founder of M ENTERTAINMENT and has 20 years of experience in corporate finance and strategic planning. Alejandro Ramirez Magaña Alejandro is the President and CEO of Cinépolis, Mexico’s largest exhibitor, with over 205 multiplexes (approx. 3,000 screens) covering most of the country. Roberto Sneider Roberto is the Founder and President of La Banda Films, a production company based in Beverly Hills, CA., serving the U.S. Hispanic market. He is also an acclaimed Director and Oscar nominated producer. Alfonso Cuarón Alfonso is an acclaimed Mexican film director, screenwriter, producer and editor, best known for his films Harry Potter and the Prisoner of Azkaban (2004) and Pan’s Labyrinth (2006). Anna Roth Anna is an experienced production manager. She has worked in several capacities over a period of 25 years. She is well known for her work as second unit director in Titanic (1997). Ivar Axel Gundersen A graduate of the London International Film School, Ivar has provided advisory and consultancy services in motion picture finance, production and distribution for Investment Banks and private investors. Javier de la Calle Pardo From 2007 to 2012 Javier served as CEO of IXE Banco, a retail bank designed to serve Mexico’s affluent class. Jorge Rangel de Alba Jorge is the President of CI Banco Institucion de Banca Multiple, a regional retail bank established in 1984 with 137 branches across Mexico’s most important cities. Mónica Lozano Serrano Mónica is a Mexican executive producer with over 17 years of experience in the industry. Since 2002, she has produced or co-produced 27 feature films, including some of Mexico’s top grossing films. Lisa Frodsham Spalla Lisa is an Emmy- nominated producer and TV executive with over 20 years of experience working in Hollywood. Pedro Langre Rosado Pedro is the appointed CEO in Mexico of Oxford Leadership Academy, an international organization that provides leadership and executive development programs. Rodrigo Garcia Rodrigo is an accomplished film and television director. He is also the son of Colombian writer Gabriel García Márquez (1982 Nobel Prize in Literature) and of Mercedes Barcha Pardo. Jose Luis Garza Alvarez Jose Luis is the CEO of Interjet, Mexico’s largest low-cost airline. Manager & Advisor Bios:

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