______________________________________________________

 

Business Plan and Financial Projections

Phoenician Industries, LLC

P.O. Box 20903, Sedona, Arizona 86341

P: 928.399.9393 / F: 928.284.4238

 

CONTENTS

 

 

Section 1:     A Brief Overview

 

 

Section 2:     The Business Plan

 

            Background

            A Model: Success as a Destination Theater

            IMAX Affiliate Relations Program

            Opportunity to Acquire Theater & Film Sponsors

           

 

Section 3:     The Location: Badaling

 

           

Section 4:     The Venue & Film

 

            The Venue

            The IMAX Experience

            The Great Wall Film

 

 

Section 5:     Risk Analysis

 

            Competitive Environment

            Competitive Advantages

            IMAX Success in China

 

 

Section 6:     Financial Plan

 

            Investment Highlights

            Sources and Uses of Cash

            Five-Year Financial Assumptions

            Pro Forma Statements & Notes to Financial Information

 

 

Section 7:     Operating Timeline

 

 

Section 8:     Exit Strategy

 

 

Section 9:     Appendix

 

            Management Team

Venue & Film Sponsorship Evaluation

            Project Factoids

A BRIEF OVERVIEW

 

 

 

Concept:          To develop a major entertainment venue at the Great Wall of China in cooperation with the Peoples Republic of China, IMAX Corporation and a major film producer.

 

                       

Project:            Development of a destination film theater and film for permanent showing at the Great Wall’s most visited location, the Badaling Gate.  Approximately a one-hour drive from central Beijing, this attraction is enjoyed by 5 million visitors annually, including heads of state and dignitaries from around the world.       

 

 

Opportunity:     Destination theaters are located in major tourist locations such as The Grand Canyon

and Niagara Falls, as well as cultural venues such as the Smithsonian Museum in Washington, DC.  Because destination films provide a more in depth story and picture than can be experienced in a short visit, a high percentage of visitors choose to enjoy a wide screen film of the location as a part of their experience.  As in the case of the film shown at the Grand Canyon IMAX, a destination film can have a continuous run for decades- something not otherwise imaginable in the film industry.  In addition, cross ownership of the theater and film can consolidate theater and distribution revenue to produce net revenue that general circulation films cannot achieve.

 

 

Investment:      $12,000,000 ($7M Film / $5M Theater, Land & Initial Operations)

 

                                   

ROI:                 Return of Capital in 3 years, approximately 75% annual return on project cost.        

 

 

Status:             Phoenician Industries has an exclusive development right agreement with the Badaling Tourism Development Authority, which is the State Company operating this facility.  The Chinese government is in support of the concept, in particular as a 2008 Olympics attraction.  Contacts with major sponsors for both the film and theater have been ongoing, and a major film producer has expressed interest in the film.  Funding requirements are described in the financial section.

 

 

BUSINESS PLAN

 

 

 

BACKGROUND

 

 

Phoenician Industries has executed a letter of intent with the Badaling Tourism Authority to locate an IMAX[1] theater at The Great Wall of China.  Located just outside of Beijing, Badaling is the most popular entrance to The Great Wall hosting over 5 million annual visitors.  A substantial number of the top grossing IMAX films in history are continuously shown at major tourist destination locations such as the Grand Canyon, the Smithsonian Institute National Air & Space Museum and Niagara Falls. 

 

The Company has been working with Destination Cinema, Inc. (www.destinationcinema.com) and IMAX Corporation (www.imax.com) to develop a business plan to replicate this highly successful and proven model.  In fact, with integrated revenue form syndication and distribution exceeding $300 million dollars, the film Grand Canyon: The Hidden Secrets, may be the most profitable movie ever made. 

 

A destination film at one of the world’s most recognized cultural monuments presents an exceptional and unique investment opportunity.  The Great Wall of China is universally acclaimed as a “must see” place in China, attracting more than 5 million annual visitors to our location.  It is difficult to visualize a more powerful location anywhere in the world for a destination theater that could rival The Great Wall of China.  In addition to its long life as an important film attraction that millions will view on-site, research indicates The Great Wall Film will also have an extremely wide international distribution appeal.

 

Taking advantage of relatively low initial capital requirements and low operating expenses in China, The Great Wall Theater and Film will be a highly profitable revenue center several decades into the future.

 

 

A Model: Success as a Destination Theater

 

 

Destination Cinema, Inc. (DCI) owns and operates giant screen theaters in tourist locations throughout North America, having pioneered the destination film and theater concept in 1984.  One of the most successful producers of giant screen films, the company owns a film library specializing in destination topics and distributes giant screen films to theaters throughout the world.  By combining the roles of theater owner and film distributor, DCI holds a unique competitive advantage.

 

From a cost standpoint, a Hollywood film's budget, including marketing, can easily reach $80-$100+ million. In contrast, an average destination theater construction budget, film production budget and marketing budget is generally under $10 - $15 million total.  For a Hollywood film 45% - 55% of revenue is retained theaters, and distribution fees reduce the net revenue further. By owning the theater and the film, a destination theater retains keeps substantially all of the gross box office revenue.

 

National Geographic produces some of the large format films shown at the Destination Cinemas as well as other large format films and television productions distributed worldwide.  Recently, the Company has received insight from National Geographic regarding production of the Great Wall Film and this project.[2]

 

A sampling of DCI theaters and films includes:

 

Destination Cinema                       Film                                                              Opened            Gross Revenue

 

Grand Canyon IMAX                   Grand Canyon: Hidden Secrets                 1984                 $300+ Million

 

Niagara Falls IMAX                      Niagara: Miracles, Myths & Magic          1986                 $100+ Million

 

National Geographic                    Hearst Castle: Building the Dream             1996                 $  50+ Million

Theater at Hearst Castle

 

DCI also distributes many large format films, including Mysteries of Egypt, to large format theaters worldwide.  Since June of 1998, Mysteries of Egypt has grossed over $100 million, being shown at both foreign and domestic theaters.  Without the benefit of a destination theater located at the Egyptian Pyramids, approximately 20% of the box office revenue is lost to independent theater owners showing the film.[3]

 

 

IMAX Affiliate Relations Program

 

“The key to our Affiliate Relations initiative is to ensure that all IMAX theaters reach their potential in terms of top line attendance and bottom line results.  To this end, we are committed to working closely with all theaters worldwide so that, together, we can achieve this goal.  It’s a productive, two-way street and a partnership of value.”  - Richard Gelfond & Brad Wechsler, Co-CEOs, IMAX Corporation

 

The purpose of the IMAX Affiliate Relations Program is to make all IMAX Theaters in their worldwide network successful.  By affiliating with IMAX, we will join a worldwide network of 235 theaters that have a successful track record of entertaining 800 million consumers over 30 years. 

 

Affiliate support comes in many forms – tangible marketing tools, key research and IMAX-sponsored training seminars and conferences along with strategic advice and troubleshooting.  IMAX makes a commitment to its affiliates to ensure success.

 

By joining the IMAX affiliate network, we will also take advantage of the IMAX brand name, which has become synonymous with the highest quality in out-of-home family entertainment.

 

Consumers around the world identify IMAX with providing extraordinary and enlightening entertainment experiences.  Through consumer research provided by the Angus Reid Group, IMAX has learned that one of the incredible positives of an IMAX theater is when it is associated with institutional or cultural heritage as will be the position for the Great Wall of China IMAX Theater.

 

Some key consumer research shows that 90% of IMAX visitors are very satisfied with their experience and would recommend it to their friends, 75% of IMAX visitors consider a visit to an IMAX worth more than a conventional cinema and a majority of consumers are willing to pay a premium to visit an IMAX.

Opportunity to Acquire Theater & Film Sponsors

 

As a destination theater, The Great Wall IMAX will offer international corporations unique promotional programs through a best-in-class entertainment venue and a globally distributed film opportunity, each offering captive audiences of millions of consumers.

 

Professional sports franchises have had enormous success offering corporations an opportunity to be associated with unique venues (stadiums & arenas) and properties (teams).  The Great Wall IMAX offers corporations the opportunity to be associated with the world’s number one cultural monument.

 

The Great Wall Theater offers corporations a unique venue (theater) as well as a unique property (film) to deliver their marketing messages to an audience rivaling most sports franchises.  The Great Wall IMAX offers many of the same signage and venue marketing and promotional opportunities offered at stadiums and arenas while also offering two distinct advantages: a captive audience and exclusivity.

 

When advertising at a stadium or arena, corporations must compete with the action on the field, floor, track, etc as well as the action in the stands.  These advertisers are hoping to cut through the enormous amount of noise, distractions and clutter taking place at each event.  The Great Wall IMAX Theater provides a captive audience immersed in a dark and quiet pre-film theater – the perfect opportunity to deliver targeted marketing messages (pre-film commercials) in an environment free of noise and clutter.

 

Since most professional sports franchises have enormous annual budgets, they must acquire a multitude of marketing and sponsorship clients causing an environment where most advertisers are lost in the shuffle.  The Great Wall IMAX offers an opportunity for marketing exclusivity, ensuring a substantial return on an advertiser’s marketing investment and marketing objectives.

 

Among the many opportunities offered to corporations are:

 

·         On-Site Exposure – Theater naming rights, key venue signage, concourse displays, point of purchase displays, retail opportunities, co-branded materials and collateral

·         Comprehensive Media Package – Extensive online exposure, tourism industry co-op advertising, global PR effort, print and broadcast advertising schedule

·         Hospitality & Facility Usage – on-site promotions, presentations and demonstrations

·         Extended Usage & Visibility During 2008 Beijing Olympics

·         Film Sponsorships – pre-film commercial shown to all theater attendees, worldwide film distribution, product placement in film (when applicable), presenting sponsor of film

·         Official Status & Exclusivity – Complete exclusivity (except for our food & beverage provider), theater name usage rights in all corporate communications

 

Using industry standard evaluations provided by IEG, Incorporated (www.sponsorship.com), we have been able to establish a value in the range of $920,000 per year for exclusive sponsorship opportunities involving The Great Wall Theater and The Great Wall film.

 

Our limited current efforts have received a warm response from several potential theater and film sponsors as well as potential pouring rights partners and film producers.

 

Please view the Venue & Film Sponsorship Evaluation sheet in the appendix section of this document. 

 

THE LOCATION: BADALING

 

 

The Great Wall of China is universally acclaimed as the world’s number one cultural monument.  Located just outside of Beijing, Badaling is China’s most popular entrance for the Great Wall, hosting in excess of 5 million visitors each year. 

 

Since the founding of The People’s Republic of China in 1949, Badaling has welcomed more than 120 million visitors, including 360 heads of countries and governments.

 

Beijing has a population exceeding 13 million and also attracts more than 120 million tourists each year.  A new 43-mile expressway connects Beijing to Badaling offering easy access by a 60-minute drive, bus or train ride.  Construction of a high-speed magnet train is being proposed to reduce the journey to less than 10 minutes, thereby increasing the number of visitors to Badaling.

 

This locale will also provide The Great Wall IMAX Theater immense exposure during the 2008 Beijing Olympics.  More than 4.4 million visitors are expected to the Beijing area for the Olympics.  It is safe to assume that a substantial majority of these visitors will visit The Great Wall while in China.

 

Plus, the Badaling Tourism Authority is also planning to distinguish this location by hosting various sporting and public events.  Present facilities to secure tourist satisfaction include a tram to the top of the Great Wall, restaurants, shops and The Great Wall Museum.  Plans are also underway for additional tourist and cultural venues.

 

In comparison to the Grand Canyon, which attracts 4+ million visitors each year, Badaling attracts over 5 million annual visitors.  A parallel can be made between the success of the Grand Canyon IMAX and Film and the potential success of the Great Wall of China Theater and Film.  In the near future, Badaling is also anticipating increases in the number of annual visitors of approximately 5% - 8% as more international tourists are visiting China and as new facilities and attractions are introduced to the area.

 

 

 




  THE GREAT WALL OF CHINA IMAX THEATER & FILM

 

 

The Venue

 

The Great Wall IMAX Theater will create a uniquely memorable experience for its visitors by the very nature of the beautiful state-of-the-art venue in which the Great Wall film will be shown.  Because IMAX films are shown on such an enormous screen, the buildings must be an exceptional, monolithic architectural experience.   

 

The Great Wall IMAX will be no exception.  This 600-seat theater will showcase architectural enhancements and structural features designed to pay tribute to the cultural heritage of the Great Wall.

 

IMAX is a very special adventure that starts outside the building and then continues inside.  This specially designed venue will provide visitor-friendly amenities in the form of:

 

The Welcome Zone – an open and inviting lobby that features interactive kiosks, retail opportunities, food and beverage sales and other consumer-oriented areas to provide visitors a complete experience while maximizing theater revenue.

 

The Illumination Zone – a lunch and relaxation area where visitors can enjoy extended visiting time inside the theater either before or after viewing the Great Wall film.

 

The Immersion Zone – the enormous auditorium where visitors will enjoy the Great Wall film.

 

The IMAX Experience

 

IMAX motion picture systems are the finest film systems in the world.  Images of unsurpassed size, clarity and impact, enhanced by a superb specially designed six-channel, multi-speaker sound system are projected onto giant rectangular screens providing audiences with truly memorable experiences.

 

The giant screen is absolutely immense in comparison to a traditional theater screens.  The IMAX screen is also perforated with thousands of tiny holes to allow the sound to flow through unimpeded.  Specially designed auditoriums with steeply pitched seating provide all viewers with perfect, full views. 

 

The extraordinary Great Wall Film presented at The Great Wall Theater will serve as a means by which visitors achieve an understanding of the world’s number one cultural monument.  What will happen in The Great Wall Theater will be so realistic that no one will leave untouched.

 

The Great Wall Film

 

The Great Wall is embedded in the very soul of China.  This will be a story of a people’s preserving spirit, monumental achievement, struggle and beauty all wrapped in the history of a great civilization.

 

The story will be driven by high visual imagery and an original sound track.  The musical score will be able to stand on its own in classical and traditional music themes and will deliver the sublime beauty of The Great Wall in its facets – seasons, weather, sun/moon rises, motion control, time lapses and more.  Full color beauty shots with strict attention to methods will deliver a diversity of spectacular images.

 

The Great Wall Film will be a documentary recounting one of the greatest cultural stories of world civilization with seamless continuity and beauty.

 

 

RISK ANALYSIS

 

The risks related to developing this project essentially mirror those undertaken to do business in China. Production of the Great Wall Film in China will involve no more risk than film production and marketing most anywhere in the world.  The theater component of the project involves legal and permitting matters; however, substantial capital will not be invested until construction has begun, with all licenses and construction permits in place. 

 

While corporate structure and permitting agreements can be complicated, the experience of most western firms entering the China market has been positive.  IMAX theaters and films are now enjoying success in China, with ticket price points that provide attractive margins.

 

Competitive Environment

 

The Great Wall IMAX Theater will enjoy status as a destination theater, providing a unique environment virtually free of competition.  Currently there is a smaller, stand-up only theater at Badaling using the obsolete technology of “Circle Vision.”  There is no promotion for the film, and admission is free.  This theater would be closed upon the opening of The Great Wall IMAX. 

 

The only discernible competition would come in the form of new tourist venues being constructed at Badaling that would compete for visitors with limited time schedules. Nevertheless, it is unlikely any other attraction will overshadow interest in visiting the Great Wall.

 

Competitive Advantages

 

The foremost advantage held by the Great Wall IMAX Theater is its location.  With a location at the main entrance to the Great Wall of China, Badaling offers a current attendance exceeding 5 million annual visitors.  These visitors are there for the specific reason of touring the Great Wall and learning about the Great Wall and its history.  Visitors will seek to enhance their experience by visiting the Great Wall IMAX and enjoying the Great Wall film.

 

By joining the IMAX affiliate program, Phoenician Industries has an advantage of an international film distribution network of 235 theaters worldwide.  This network allows an opportunity to maximize box office revenue for the Great Wall film.

 

IMAX Success in China

 

On February 9, 2005 IMAX Corporation announced that it signed agreements for the completion of two additional theaters, one in Beijing and one in Guangdong, bringing the total number of IMAX theaters to be open in the People’s Republic of China by 2008 to 24.  This makes China one of the fastest growing IMAX markets in its 35-year history.

 

These new theaters reflect IMAX's continued success in executing its international growth strategy, as well as the universal appeal of The IMAX experience, especially in China.

 

According to Leng Xiaoming, Deputy Mayor of Dongguan City, “IMAX theaters have become an integral part of science centers, museums and cultural centers around the world.  We are excited to be able to provide our future visitors with powerful and unique educational experiences that transcend culture, language and even politics.  IMAX has already proven successful at the Shanghai Science and Technology Museum where hundreds of thousands of Chinese have been inspired by the IMAX Experience.” 


  FINANCIAL PLAN

 

 

Investment Highlights

 

With a base capitalization of $12 million[4], the company will generate a net operating profit of $9,123,621 by the end of Year 2.  Net operating profit will total over $49 million over the 5-year period following the opening of the Great Wall Theater. The project will return its capital costs within three years and continue to produce exceptionally high returns on project cost, potentially for decades to come. 

 

Upon completion of the theater, the only ongoing costs are maintenance and operational expenses.  The Great Wall film will produce continuous revenue, apart from the expense of film prints.

 

The model for the Great Wall Theater is Grand Canyon IMAX Theater and film, which opened in 1984 with an investment of approximately $5 million. Despite revenues to date exceeding $300 million, it is expected that this film will be running well into the future.  .   

 

Capital Requirement

 

The Company will require $12 million in additional capital to construct The Great Wall IMAX Theater and to produce The Great Wall Film.

 

Sources & Uses of Cash

 

           

SOURCES OF CASH

Pre-Opening

Year 1

Year 2

Year 3

Year 4

Year 5

Equity Funding

$12,000,000

$0

$0

$0

$0

$0

Theater Ticket Sales

N/A

$6,000,000

$6,600,000

$7,260,000

$7,986,000

$8,784,600

Food & Beverage Sales

N/A

$900,000

$990,000

$1,089,000

$1,197,900

$1,317,690

Retail Sales

N/A

$1,500,000

$1,650,000

$1,815,000

$1,996,500

$2,196,150

Venue & Film Sponsorship

N/A

$920,000

$966,000

$1,014,300

$1,065,015

$1,118,266

Worldwide Film Distribution

N/A

$2,054,364

$2,157,082

$2,264,936

$2,378,183

$2,497,092

 

 

 

 

 

 

 

 

 

USES OF CASH

Pre-Opening

Year 1

Year 2

Year 3

Year 4

Year 5

Capital Expenditures

$10,250,000

$0

$0

$0

$0

$0

Operating Expenses

$635,000

$584,000

$630,600

$681,630

$737,522

$798,749

Additional Variable Exp

$0

$1,908,000

$2,095,200

$2,301,120

$2,527,632

$2,776,795

General & Administrative

$30,000

$471,487

$513,662

$559,805

$610,301

$665,573

Cash Surplus[5]

$1,085,000

$9,495,877

$18,619,497

$28,520,178

$39,268,322

$50,941,004

 

 

 

Notes to Financial Information

 

 

Capital Funding

 

1.       Initial capital funding - $12,000,000

 

 

Capital Expenditures

 

1.       Land - $250,000

2.       Theater Construction - $1.5 million

3.       Theater Fixtures & Equipment - $1.5 million (assuming a 2D film)

4.       Production of Great Wall Film - $7.0 million (assuming a 2D film)

 

 

Revenue Assumptions

 

The Company will assume an annual Great Wall Theater attendance of 1,000,000 consumers based upon the following formula: 5,000,000 total visitors at Badaling, 20% capture rate = 1,000,000 tickets (600-seat capacity x 360 days/year x 8 shows/day = 1,728,000 full capacity; 1,000,000 tickets sold = 58% capacity).

 

1.       Theater Ticket Sales – An opening ticket price of $6.00 is budgeted, with planned increases at an average of 10% each year (based on increases in both ticket price & attendance)

2.       Food & Beverage Sales – Food and beverage sales can be projected at 15% of ticket sales based on current Asian market experience.

3.       Retail Sales – Retail sales of $1.50 per attendee are assumed, with 10% annual growth

4.       Venue & Film Sponsorship – Based upon a sponsorship evaluation using an industry standard formula provided by IEG, Incorporated, the project will generate initial venue and film sponsorship revenue of $920,000 with a 5% annual growth rate

5.       Worldwide Film Distribution – Based upon industry data, the film will generate an average of $2,054,364 each year over a 5-year period, using the following formula: 131 film leases over 5 years = 26 film leases/year x 65,845 tickets sold/lease x $6/ticket = $10,271,820/year x 20% (our take) = $2,054,364/year with a 5% annual ticket price increase

 

Operating Expenses Assumptions

 

1.       Initial Marketing Campaign – Initial marketing, advertising and promotion expenses are budgeted at $500,000

2.       Ongoing Marketing Expense – Budgeted at 5% of theater ticket sales revenue

3.       Community Relations & PR – $50,000 up front and an ongoing budget of 2% of total theater ticket sales revenue

4.       Theater & Film Collateral – $50,000 up front and an ongoing budget of 2% of theater ticket sales – includes programs, tickets, brochures, posters, promotional items, etc 

5.       Website Development - $20,000 up front expense

6.       Website Maintenance - $5,000 up front and ongoing budget of $1000 per month

7.       Activation of Sponsorship – 10% of sponsorship income will be used to “activate” the sponsorship by producing custom signage, custom media campaigns, on-site promotions and provide audience tracking to ensure the sponsor will achieve maximum ROI

 

 

Additional Variable Expenses

 

1.       Food & Beverage Expenses – Budgeted to be 28% of total food and beverage sold

2.       Retail Goods Expense – Budgeted to be 60% of total retail goods sold

3.       IMAX Affiliate Fee – 7% of theater ticket sales revenue (assuming we affiliate with IMAX)

4.       Anticipated Badaling Rent, Participation, etc.– Budgeted as 5% of theater ticket sales

5.       Reprinting of the Great Wall Film – Budgeted as an annual expense of $36,000

 

 

General & Administrative Expenses

 

1.       Theater General Manager - $24,000 annual salary with annual increase of 5%

2.       Theater Assistant Managers – Total of $16,000 annual salary with annual increase of 5%

3.       Hourly Labor – 12hrs/day x 30 days/month x 10 employees/day x $3/hr = $10,000/mo

4.       Maintenance of Fixtures & Equipment (accounts for physical depreciation) – 0.5% of theater revenue (Tickets, F&B & Retail)

5.       Security & Utilities – $30,000 up front and an ongoing budget of 0.5% of theater revenue

6.       Miscellaneous Operating Expenses – 2% of total company revenue

 

 

 

 

(SEE ACCOMPANYING FINANCIAL STATEMENTS HERE)

 

 

 

  OPERATING TIMELINE

 

 

 

The Company has an informal association with IMAX Corporation and a development agreement with The Badaling Tourism Authority.  This business plan initiates with month 1 as the time period when financing is in place and all theater construction and film production can begin simultaneously.

 

Theater:           Tasks that need to be completed prior to month 1 are completing the financial plan, corporate formation, selecting the specific building site, building design, the acquisition of any necessary building permits, complete development agreement with Chinese authorities, finalize design of the theater, select construction firm and schedule film production with film producer.

 

Film:                Following the completion of these tasks, the construction of the theater and the production of the film can take place simultaneously over a 12 to 15-month period. 

 

With financing in place and pre-construction tasks complete by 2007, Opening Day at The Great Wall of China IMAX Theater should be prior to the 2008 Beijing Olympics.

 

 

 

 

  EXIT STRATEGY

 

 

 

The Project will generate substantial positive cash flow in early operations, and can be developed without debt, using equity investment and sponsorship underwriting.  The revenue potential will be several hundred million dollars over a period of more than 20 years.  Since investment capital will be returned early, motivation for an early exit from the project may not be a critical factor.  However options to liquidate the investment would be many, including most of the major international entertainment companies, corporate sponsor organizations and international investment funds.  Typically, media and entertainment properties are priced for sale at a range of approximately 4-8 times net earnings. 

 

 

 

SUMMARY

 

 

                                                           

The project will occupy an exclusive piece of real estate at the world’s number one cultural monument.   The venture will be an extremely high profile business opportunity in the Chinese market, and potentially the “flagship” of sponsorship opportunities in China.  The synergy of a destination film and theater is unique. A destination film can be only moderately successful in the distribution market place, yet generate large and continuing revenues for decades on site. However it is anticipated in this case that the Great Wall Film will be successful on a stand alone basis, which (depending on cross ownerships) can provide the theater with a paid for film. The rate of return on investment is exceptional, with recovery of capital cost in less than 3 years. Unlike most business investments and ventures in China, the Great Wall IMAX will offer its investors both a high level of recognition and credibility in the China marketplace.

 

 

 

 

 

 

  APPENDIX A: MANAGEMENT TEAM

 

 

 

Management Team

 

Phoenician Industries, LLC is an Arizona Limited Liability Corporation experienced in international real estate, Internet technology and entertainment media.  The principals of Phoenician Industries have been involved in entertainment and documentary productions with Sony Entertainment, PBS and others and have successfully developed over 5 million square feet of real estate in the United States, United Kingdom, Mexico and Ukraine.

 

 

Richard Shaw

 

 

Richard Shaw has diversified, international business experiences across several industries, including retail, most types of real estate, finance, privatization, marina development, entertainment property development, consulting and related legal work. Richard has served as head of a public tax-exempt financing agency, and director of a state agency in Arizona. His consulting experience includes ventures involving US and foreign privatization, corporate governance and training Former Soviet Union business consultants for Harvard University/USAID. Richard’s strengths include developing legal and business solutions focusing on issues inside complex legal, business and political environments.  His business experience has been that of a founder or co-founder in several start-up companies, with substantial international and 3rd world experience.  Richard’s direct real estate development experience exceeds 5 million square feet of income property.  His transactional and financing experience exceed 1 billion USD. Richard is a member of the California Bar Association, and is also active in alumni affairs of Arizona State University and Harvard University. As a side note, he employs conversational fluency in Spanish, and a rudimentary usage of Russian.

 

 

Brian Pilsl

 

 

Brian Pilsl formed Great Wall Media, LLC for the purpose of developing and marketing sponsorship packages for the Great Wall IMAX Theater and Film.  He has also been instrumental in developing the business plan and marketing effort aimed at acquiring potential partners in the form of financiers and film producers.  He brings over 10 years of entrepreneurial, business development, direct advertising and sports sponsorship experience.  Brian has successfully developed and marketed 2 previous business plans that have garnered over $2 million in initial capital infusions.  In addition to his responsibilities with Great Wall Media, LLC and Phoenician Industries, Brian also heads Golfers Direct, LLC (www.golfersdirect.net).  Golfers Direct is an outdoor advertising company with over 8,000 sites in Arizona, California, Hawaii and Nevada.  Brian was born in Kansas City, Missouri and received his Bachelor Degree in Economic Management with a minor in Business Administration from Kansas State University. 

 

 

  APPENDIX B: SPONSORSHIP EVALUATION

 

 

Before signing any sponsorship, best practice companies will have a third-party evaluation of the property being considered.  The term property here refers to the IMAX Theater & Film as a single sponsorship “property”.  To measure the rights and benefits offered in a sponsorship package, the evaluation accounts for both Intangible Benefits and Tangible Benefits as detailed below.

 

 

INTANGIBLE ASSET

DESCRIPTION

Prestige of Property

3 out of 4 consumers feel that a visit to an IMAX theater is worth more than a conventional cinema.  In fact, the majority would pay a $2 premium and 33% would pay a $3 premium.

Recognizablity & Awareness

State-of-the-art venue will be located at the main entrance to The Great Wall of China, hosting more than 5 million annual visitors.  Also will co-brand with IMAX, which has experienced great success in China.

Audience Loyalty

90% of IMAX visitors are extremely or very satisfied with their experience and 89% of IMAX visitors would recommend IMAX theaters and films.

Audience tracking will detail ROI for the sponsor

Category Exclusivity

Complete venue, not just category, exclusivity

(except for our food/beverage provider)

Protection from Ambush

Audience is completely immersed in the experience provided by our sponsor – there are no a’ la Carte benefits to be sold.

Degree of Sponsor Clutter

Clutter is almost non-existent except for minimal benefits provided to our food/beverage provider.

Ability to Activate

Turnkey promotions can be co-developed to allow sponsors to engage the audience.  With only one sponsor as our partner, we can be flexible and move quickly to ensure maximum activation and success

Complete Creative Customization

During pre-construction phase, Sponsor’s creative team can provide input regarding interior design and layout of theater to provide optimum activation opportunities.

Media Coverage Potential

Location alone will provide media & PR coverage in addition to our annual advertising budget.  Also will negotiate trade with our beverage partner to associate with their marketing and distribution efforts.

Established Track Record

Full reporting will be provided to sponsor to use to establish short-term and long-term ROI.

Potential for Cause Marketing

Chance to align sponsor with the renovations of The Great Wall of China

 

TANGIBLE ASSET

REACH

AMOUNT

TOTAL ANNUAL VALUE

ID on Tickets

(with coupon on back)

1,000,000

$.0025-$.05

$26,250

ID on Program Book

500,000

$.0025-$.05

$13,125

ID/Content Integration on Property Website

(tickets also sold online)

500,000

$.0025-$.05

$13,125

Venue Signage

(both static & electronic)

1,000,000

$.0025-$.05

$26,250

Name/Signage on Venue Exterior

5,000,000

$.0025-$.05

$131,250

30-Second Pre-Film Commercial

1,000,000

TV Rate Card

$50,000 (estimated)

Title Sponsorship/Placement in Film

(Venue)

1,000,000

$.0025-$.05

$26,250

Title Sponsorship/Placement in Film

(Worldwide Distribution)

1,700,000

$.0025-$.05

$44,625

Product Sampling

500,000

$.04-$.15

$47,500

ID on Property Media Buy

$300,000

10%

$30,000

 

 

 

            Average Value of Tangible Benefits:                     $ 400,000

 

            Average Value of Intangible Benefits:                   $ 520,000          (1.3x the tangible benefits)

 

            Total Average Annual Sponsorship Value:      $ 920,000

 

  APPENDIX C: PROJECT FACTOIDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


(click numbers below to link to info)

[1] IMAX licensing agreement is pending

[2] IMAX, DCI & National Geographic have provided insight and assistance; no formal agreements are in place

[3] Opportunities may exist for a theater development at the Egyptian Pyramids

[4] Base capitalization needs could increase if a decision is made to produce a 3D film

[5] Does not account for dividends paid to Company investors or taxes