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Sweet Deals?
Studios are setting up paper companies to get outside financing. Investors and
banks put up the money, while studios collect the lion's share of any net
profits
NEW COMPANY'S 4% of equity capital is provided entirely by
CAPITAL STRUCTURE outside investors
96% of debt capital is guaranteed by banks
NEW COMPANY'S 4% of any net profits go to outside
PAYOUT investors, after paying huge studio bills
and debt service
96% of any net profits go to the studios,
which don't invest any capital
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Updated July 31, 1997 by bwwebmaster
Copyright 1997, by The McGraw-Hill Companies Inc. All rights reserved.
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