GHJ’s methodical approach realized significant return for an investor in theatrical titles.

HIGHLIGHTS

1. Developed a tailored approach to provide the best cost-benefit to the client
2. Conducted on-site reviews to verify the accuracy of foreign reporting
3. Achieved a significant multiple on audit fees 

BACKGROUND 

A prominent client with interest in a slate of theatrical titles distributed by a studio sought GHJ's expertise for a comprehensive profit participation review. The objective was to ensure the distributor's adherence to the intricate agreements and to address potential discrepancies, given the high stakes and the possibility of a significant financial settlement.

GHJ'S APPROACH 

GHJ’s Profit Participation Services (PPS) Practice executed a methodical approach to tackle the complex review:

• Title Segmentation and Review: The titles were categorized into three distinct groups based on performance which determined GHJ’s approach. The PPS team conducted a full-net review of the highest-grossing titles to ensure accuracy in reported figures. For the middle-tier titles, GHJ performed an expense-focused review to assess cost allocations, while for the lower tier of titles, GHJ performed other limited procedures. This segmentation approach balanced the potential benefit with the anticipated costs, yielding the best cost-benefit to the client. 
• Foreign Fieldwork Analysis: As part of the scope, GHJ performed a detailed analysis of foreign financial activities with on-site visits to three foreign locations. These visits were crucial for validating the accuracy of international reporting. Depending on the findings, where applicable, GHJ looked for any recurring issues, which may apply to other foreign locations.

Throughout this process, continuous communication with the client and the studio was maintained to address any issues promptly and keep the project on track.

RESULTS 

GHJ's meticulous review process and adaptive strategies resulted in an impressive settlement which was higher than the client’s expectations. This significant financial return demonstrated the effectiveness of GHJ’s approach and provided the client with a substantial return on their fees.

These results demonstrate GHJ’s commitment to addressing complex challenges and achieving significant outcomes for clients in the entertainment industry.