Arundel Partners: Sequel Rights
Arundel Partners
1. Why do the principals of Arundel Partners think they can make money buying movie sequel rights?
2. Why do the partners want to buy a portfolio of rights in advance rather than negotiating film-byfilm to buy them?
3. Estimate the per-film value of a portfolio of sequel rights such as Arundel proposes to buy [Hint: There are several ways to do this and some part of exhibits 6-9 and the appendix will be useful]
4. What problems and disagreements would you expect Arundel and a major studio to encounter is the course of a relationship like that described in the case? What contractual terms and provisions should Arundel insist on?
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Answer 1
The principals of Arundel Partners thought they could make money purchasing movie sequel rights since they were focused on successful films. In particular, the decision to buy sequel rights for a specific movie was made after the first few weeks of the film in theaters (Teichner & Fellow, 1992). Arundel Partners was only interested in movies that fared well in theaters since they knew that producing a second continuation film would be profitable.
Answer 2
Arundel Partners was interested in buying a portfolio of rights in advance rather than negotiating movie-by-movie since the former maximized their financial potential. Besides, the company wanted to buy sequel rights for a specific period, usually one to two years. Besides, in 1992, large movie production studios did not explicitly assign values to movies during production since it was a risky business full of uncertainties to predict the