Talking of illusory media revenues, there was some gloom at the Media and Money conference about the chances of hedge funds and other investors being able to make decent returns on equity investments in Hollywood films.
One panel was full of warning noises about the returns that will be made by hedge funds that have rushed to Hollywood in the past two or three years. They have mostly placed money into "slate deals" of up to 25 films packaged by studios for outside investors. I have written sceptically about this before.
Chip Seelig of Dune Capital, which has invested in films produced by Fox Filmed Entertainment, was pessimistic about many equity investors being able to achieve a 20 per cent equity return, which Dune regards as the hurdle rate.
"There is a constant supply of capital coming to the market that takes sub-optimal returns so I think it will continue to be difficult," he said. In other words, Hollywood still suffers from star-struck investors coming to town and having their money taken from them by old hands.
