Everything Is About Finances!
Everything is About Finances!
I still remember when I was at my friend’s house and used to poke around by grabbing the paper to read the news, and show off myself by saying “my stocks in the market are doing pretty good”. Nothing to laugh about it, except that the only thing of value was my own bicycle that I used as a mean of transportation to go from home to everywhere else, and my own persona if a body could be counted as gold since my family was “poor” in the terms and conditions of that little kid from “Rich Dad, Poor Dad”.
Years passed by, and we do not know what the future holds for us, and one day at school I am supposed to write a blog for my Entertainment Business Finance about the things that I learned in class. Believe me I learned a lot, and now the real world.
Stock market? Google stocks or Wal-Mart stocks? Which one do I go for? It depends. Stocks in the market behave divergently depending on the sector, and even within the sector a share might be of high value, depending on the company performance such as its efficiency, liquidity, profitability, and stability. We should look at the ratios when we compare Google vs Wal-Mart: Return of Investment (ROI, which is related to the efficiency of the investment for the company) for Google 14.15; Wal-Mart 14.31; Return on Equity (ROE, how much profit a company makes with money from shareholders) for Google 15.55 and Wal-Mart 23.30.
Negotiations? Big deal in business finance when making a contract with an artist. 120 millions deal for Madonna in which she is getting 90 % of the concert sales, and also 50% of licensing money? In the top of that, LIve Nation is releasing $17.5 million to the artist in advance, plus another $50 to 60 million dollars when she delivers the music for some CD’s.!!!?????
What!!??? Are you crazy? She is going to steal even the clothes that I am wearing on! There should be a point where the artist knows when enough is enough! Do not worry my son- it seems to me that the CEO, Mr Rapino from Live Nation is telling me- everything is about finances! “We got the Madonna 2014 tour at 2008 prices… We project that Madonna will gross over $1 billion in this 10 years. She's working to generate the $1 billion, not the $100 million schedule that we're going to pay her over time. That's just the appetizer.” Everything is about finances; the money that you spend in the present time will grow in the future because “time is money”. It is like buying a house at $100,000 at the present time, and within 15 years that same house will value $140,000.00 because of the rate of inflation, interest, and time value of money. You see? I take off my hat for Mr. Rapino. Nice move, and above all, a whole concept about finances and time value of money.
Decisions in business? How would you know if an opportunity for business is good at the present time, and will be good in the future, taking into consideration the different rates associated for that loan?
R: By analyzing the profit that will be made in the future minus the cost at the present time. Formula? NPV= PVB-PVC
How would you know if an investment of $100,000 would return, at what rate, and within what time? Payback= C/ATB
I could go on, and on presenting a lot of variables and formulas that show us how taking business decisions is about critical thinking and finances.
As I said before, and I repeat it again: everything in business is about time, rate, money and finances, specially finances which is the key to analyze proposals to get the best deal that should be represented in profit, profit, and profit.
What did I learn from this course? Finances, is the most important key to make business profitable
REFERENCES
http://www.reuters.com/search?blob=google
http://www.reuters.com/finance/stocks/overview?symbol=WMT.N
https://assethub.online.fullsail.edu/assethub/Disc-LiveNation_f423bde6-646a-4a15-8a27-0cca269e8a6d.pdf
https://assethub.online.fullsail.edu/assethub/Disc-livenationCEOinterview_bafe6c0b-19ef-465e-8dd6-56fa1eab2982.pdf
More Posts from Blogmarkostuff and Others
Contracts in the Entertainment Business
Contracts in the world of entertainment are important because they involve different aspects of the relationship between artist and manager. The contract stipulates the extent to which the manager will commit to the artist. There are agreements that could only include organizing tours for the artist. There are others contracts that might include planning the professional career of the artist involving not only the creation of the artistic image but also organizing every performance, recording, and interviews.
A contract that defines a superficial relationship between artist and manager might only include planning tours. This type of contract might not be beneficial for the artist in terms of professional growth and image development in the entertainment industry. The amount of time the manager spends on the development of the artist’s career is dedicated to plan live performances and get the money. According to Howard, a manager who establishes this type of relationship with the artist might not know much about business development.
There is another type of contract in which the manager is committed to bring out most of the artist’s capabilities. The contract includes an elaborated plan, detailed organization, a meticulous design, and precise control of the professional career of the artist. The manager is also responsible for finding the financial funds that might be needed it to reach the summit of success.
According to Paul Allen the functions of a manager should include: 1. All the phases of artist’s career in the entertainment industry 2. The appropriate music and show designed for live performances. 3. Publicity, public relations, employment, and advertising. 4. Image and related matters. 5. Booking and talent agencies that work on behalf of the artist. 6. The selection of other key team members such as attorneys, business managers, accountants, publicists, and a Webmaster.
In addition to the functions outlined before by Allen, George Howard suggests that the manager should go beyond signing a contract with the artist by providing a business development scheme. The manager should not see the artist as an investment that could pay off in cash after settling a recording deal. According to Howard management is “about leveraging the brand equity to create direct revenue streams, as well as strategic partnerships where you, again, create visibility (thus increasing brand equity) and revenue.” He also mentioned that “most of the managers are not prepared to do business development.”
REFERENCES
Allen, Paul. (2007). Artist Management for the Music Business
Howard, George. (2011). Artist Manager Must Understand Their Role is Now Business Development. Retrieved from http://blog.tunecore.com/2011/02/artist-managers-must-understand-their-role-is-now-business-development.html
#Frasescelebres
No estoy seguro de lo que voy a hacer, pero bueno, quiero ir a lugares y ver personas. Quiero que mi mente crezca. Quiero vivir donde las cosas suceden a gran escala.
F. Scott Fitzgerald (via elcielosobremi)
Ideas al vilo con pensamientos al vilo
Se conducian con sistemas binarios 0 y 1; cero por NO y 1 por SI. Vivian en un mundo feliz y robotizado; no sabian que la malfuncion o dano era parte de la condicion misma de la existencia del ser humano. Pero ellos eran perfectos, y les gustaba su felicidad robotizada de 0 y 1.
Siempre me ha gustado Maná, quizá sea la versatilidad de los sonidos al combinarse con las acústicas, lo cual producen un ritmo original fuera de clichés musicales. Un buen programa musical empezaría con ellos, a la par de trabajar entrevistas de por medio
LoveSucks: totally true!
Here you will find some of the things that I really like. I like writing, music, poems, and producing any idea that comes to my mind. I hope you like it!
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