Why Personal Management Firms Are the New Prize Asset
Venture Capital Firms are taking meetings with personal management companies for 5 reasons: Low-cost entry points; low-cash burn rates; stable cash flows; steady growth; and of course, the big upside potential in streaming TV.
With exploding demand for TV streaming content, personal management firms can develop, package, co-finance, produce and deliver — which creates a much bigger upside, and significant profit margins.
Personal management has matured into a sophisticated business, and there’s confidence in the capital markets.
A management and production company takes a two pronged approach. They cross-pollinate their clients with their projects: TV series; feature films; mini-series; video blogs; and live entertainment.
Unlike agents, personal managers can produce projects with their clients, which has become a flourishing business, and a solid business strategy. This generates packaging fees and backend percentages.
The payoff can be much bigger than the old commission-only business. The HBO TV series “True Detective” is one of many recent examples.
The old commissions-only model placed little emphasis on self-financing, and the old model left a lot of money on the table.
Financing is the key ingredient. The more money a management company brings to a project, the more it can negotiate leverage from a network. The big money is in retaining rights to sell a TV series internationally.
Consider that neither Adam Sandler nor Reese Witherspoon enjoy first-look deals with a movie studio or TV network. Both are extremely busy producers, and both are very busy actors.
Who else will actors, directors, writers and producers be able to turn -- in order to develop their numerous projects. Answer - a well-funded personal management company.
That’s a big opportunity in a content hungry world !