## Thursday, February 4, 2010

### Lots of noughts

Editor's Note: Nought is Olde English for not a thing, or nothing, or zero. As in: "There are lots of noughts in this blog."

I like visual images. Pictures. Movies. But I'm not really a movie FAN. It was with great amazement that I read this morning about the asking prices for "movie libraries." Another announcement said Michael Dell and two partners have purchased and donated a fantastic and enormous library of prints. There were  numbers attached, so I knew that elementary math could be applied to the newspaper stories!

Here we go:

Disney Miramax Film Library - 700 titles for \$700,000,000

MGM Film Library up for sale - 4000 titles for \$2,000,000,000

Dell buys Magnum Collection - 200,000 prints for estimated \$100,000,000

Wow! That's a lot of dollars! How about a cost analysis?

700,000,000 (seven hundred million) divided by 700 (seven hundred) = \$1,000,000 per movie.

2,000,000,000 (two billion) divided by 4000 (four thousand) = \$500,000 per movie.

100,000,000 (one hundred million) divided by 200,000 (two hundred thousand) = \$500 per print

How much can you earn with a film library?

Estimates place the earning power of the Miramax Library at between \$50,000,000 (fifty million) and \$100,000,000 (one hundred million) per year. Some have speculated upwards of \$300,000,000 (three hundred million) but others scoff at that suggestion. We'll ignore it.
• If we assume I could make \$50 million a year on the Miramax films, could I earn that much if I put \$700 million in the bank or stock or real estate market? That's 1/14th of the principal each year, or 7%.
• If we assume I could make \$100 million a year on the Miramax films, could I earn that much if I put \$700 million in the bank or stock or real estate market? That's 1/7th of the principal each year, or 14%.
Hummm. Err. Harrumph. Could we have a lower price please?

Before I parted with my hundreds of millions, I'd want to know more details about what this collection earns. And what's happening with downloads, and peer sharing of video files, and declining sales of DVDs, and digital recording off television, and so on.

Rupert Murdoch already said No to both collections. That should say something about the prices.

Thankfully, these movie library prices are six to nine noughts (1,000,000 to 1,000,000,000) out of my price range, so I won't be losing any sleep over a sale.

But I might go to the University of Texas someday and see some of those prints. Here's a sample from the Magnum Library, showing a bunch of folks floating down a river in 1953.

Interesting Side Note:
Miramax was named in honor of Miriam and Max Weinstein by their sons Bob and Harvey Weinstein. AnsMar, the parent company of Excel Math, is named in honor of Anson and Marian, the parents of our founder Janice Raymond.