Michael Sippel

Senior Manager

"#BeMore with Green Hasson Janks."

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Michael Sippel

    Choosing Your Profit Participation Auditor

    Unlike compliance services, such as tax preparation or financial statement audits that represent more of a commodity service offering, profit participation audits represent a forensic consulting engagement. In most cases this requires extensive, specialized experience and can only be performed once. Therefore, as we learned from Indiana Jones and the Temple of Doom: “choose wisely” when picking your profit participation auditor. We recall several instances that highlight our concern with the […]

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      Is It Time To Audit Your Merchandising Licensees?

      Intellectual property owners are entitled to financial compensation in exchange for granting rights to licensees. As licensing deals grow, it is important to develop monitoring or audit programs to hold licensees accountable. What is merchandise licensing? Licensing exists in almost every product category that you see in retail stores. The intellectual property (IP) / Copyright owners and/or distributors (e.g., studios, creators, or brand owners, collectively “IP Owner” or “Licensors”) license […]

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        Who is Watching the Subdistributors?

        All major and mini studios utilize some form of subdistribution. In the foreign markets, a number of studios (mostly minis) only use subdistributors, and some minis use subdistributors in the domestic market as well. In many cases, the studios look for subdistribution relationships in certain territories based on various factors, such as financial (major studios may elect to go with a local subdistributor in smaller territories as opposed to setting up their own local branch), among others. The […]

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          Vertical Integration in the Entertainment Industry and its Impact on Profit Participations

          The definition of vertical integration is as follows: “The combination in one company of two or more stages of production normally operated by separate companies.” Many of us are familiar with “vertical integration” and see it on a regular basis – most recognizably in the areas of communications and technology. For example, phone companies (such as Apple and Verizon) virtually perform every function of the supply chain, e.g. research and development, manufacturing of the product, purchasing of […]

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            Choosing Your Profit Participation Auditor

            Unlike compliance services, such as tax preparation or financial statement audits that represent more of a commodity service offering, profit participation audits represent a forensic consulting engagement. In most cases this requires extensive, specialized experience and can only be performed once. Therefore, as we learned from Indiana Jones and the Temple of Doom: “choose wisely” when picking your profit participation auditor. We recall several instances that highlight our concern with the […]

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              Post Participation Review Best Practices

              Our film and television profit participation forensic reviews have a life of their own beyond the issuance of our report. Therefore, and based on popular demand, we wanted to share further information on what typically occurs beyond that point. Let’s imagine we have completed our review, and you have our final report in your hands. Now what? Submitting our Report: Based on contractual provision requirements, a client’s representative (most likely the attorney but at times, the agent or business […]

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                “Hasta La Vista” First Dollar Gross Deals

                During the last 10 to 20 years, “A-List” actors such as Arnold Schwarzenegger, who made famous the quote “Hasta La Vista Baby,” were consistently receiving “first dollar gross” (FDG) deals from most major studios. A FDG deal can be defined as all Revenues (with home video at the industry standard 20-percent royalty) less only “Off-The-Top” Expenses, which typically consist of Taxes, Dues, Residuals and Checking and Collections. As such, regardless of whether the picture was a “blockbuster” or a […]

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                  Breakevens: Breaking Down the Basics

                  For those of us involved in profit participation, either as talent (actors, directors, producers, creators and/or investors) or representatives thereof (lawyers, business managers, agents and/or auditors), the concept of “Breakeven(s)” is becoming ubiquitous at all major motion picture and television studios for profit participation reporting. You may be asking yourself, “What is a breakeven and, more importantly, why do I care?” If so, this article is meant for you. To put it is as simply as […]

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                    Crash Course in Profit Participation Tolling

                    Profit participation agreements generally include incontestability language, which only allows the profit participant to audit statements issued up to two or possibly three years prior to the date of the audit notification. On one hand, the rationale for this restriction may come from the challenge of storing documents, so the longer the tolling period, the longer the studio has to maintain the books and records supporting the profit participation statements, which can be costly and […]

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                      Brave New Media World: The Various Forms of New Media, Studio Reporting and Potential Concerns

                      EST, VOD, SVOD, FVOD, and ADSS… What do they mean, and why do we care? The ascent of new media markets – with the simultaneous decline of the hard goods home video industry – is evidence of a diversifying brave new media world. Understanding the nature of the emerging markets themselves and how the different studios report them is imperative for those who follow entertainment trends – as well as advocates on behalf of the actors, directors, producers, creators and investors of film and […]

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