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Its misleading to suggest that KPE are responsible for the costs of the merchandising. There are no costs to KPE for this. That’s not only covered adequately by the RNS, but it’s also been covered in the various investor events.
Equally (as KNIGEL points out) I would expect that the profit figure for lvcg for future events will be revealed in the forthcoming brokers note too, based upon what was delivered at Frankfurt.
"DC clearly said the event made a profit - which apparently is rare for a first time concert/festival and the a reconciliation is taking place but is being delayed due to the number of (I believe he said) cross party invoices."
How can you categorically say you have made a profit if you haven't added together all your expenses from all sources?
Even if a profit has been made, how much? It is rare to make a profit from a first time concert/event. In fact it's rare to make any profit from a concert or event with most money made from merchandising alone. What I didn't hear DC state is what sort of ball park figure we are talking about with regards profit. It could be 10p for all we know. It's still profit but not the figure floating about in your head.
"Exactly KNIGEL. There’s been a clear statement that the event is profitable,"
So what is it? Figures bandied about are turnover; how much is taken at the gate; how many tickets sold and how much was produced from licensed goods but not how much did it produce after expenses have been removed regardless of source. I have asked a simple question and the answer is missing. Why? Reconciliation is part of the answer but not the whole answer. You can still get a ball park figure based on known figures with a percentage removed for incomplete accounts.
"2 Mar 22
Highlights
· Sale of merchandising at the KPOP.Flex concert and fan fest taking place in Frankfurt on 14 and 15th May 2022
· Minimum guarantee due to the Licensor from the Licencee
· Use of KPOP.FLEX and FLEXEY names and associated logos to develop, manufacture, advertise and *****sell certain approved goods****** granted by LVCG to Nylon Merchandising Limited
· 75% of Net profit from the sale of all merchandise at the festival, online and off-site is payable to LVCG with 25% payable to the Licensee
· Intellectual property (IP) for the merchandise remains with LVCG"
Nowhere in there states clearly that ALL costs from merchandising fall on a third party, only a portion of items sold under license. All it states there is that any licensed products sold at the festival incur a 75% licensing commission with a minimum revenue guarantee from the licensee.
I've ran several festivals/concerts and can give you a ball park profit figure before the event has even opened. Every eventist can. If you don't know your overheads and sales you may as well give your money away to every person you meet in the street
Exactly KNIGEL. There’s been a clear statement that the event is profitable, so it’s it just supposition or hearsay. Its also important to break down the revenue streams, because for KPE they don’t all break down in the same way.
Take merchandising. There’s no investors capital being risked as they have an experienced partner in to deliver. Unusually they got a minimum revenue guarantee from the partner and all the risk of delivery and overstocking etc rests with the partner. There was a clear statement that the minimum revenue guarantee figure was met. So for that element, costs = zero and revenue = £350,000. In future they will also get revenue from allowing the artists merchandising to be sold. They won’t be taking any risk on producing that or overstocking either.
2 Mar 22
Highlights
· Sale of merchandising at the KPOP.Flex concert and fan fest taking place in Frankfurt on 14 and 15th May 2022
· Minimum guarantee due to the Licensor from the Licencee
· Use of KPOP.FLEX and FLEXEY names and associated logos to develop, manufacture, advertise and sell certain approved goods granted by LVCG to Nylon Merchandising Limited
· 75% of Net profit from the sale of all merchandise at the festival, online and off-site is payable to LVCG with 25% payable to the Licensee
· Intellectual property (IP) for the merchandise remains with LVCG
Did you listen to the presentation? DC clearly said the event made a profit - which apparently is rare for a first time concert/festival and the a reconciliation is taking place but is being delayed due to the number of (I believe he said) cross party invoices. The final figures and the LVCG share is due to be confirmed by next month - so you should get at least some of your answers then - depending on how detailed the RNS is or whether it is disclosed in the first half accounts
Profit equals turnover minus expenses. Knowing the revenue is worthless without knowing the complete expenses and holding any kind of event is expense hungry with an awful lot of hidden costs. Until you know those figures then suggesting something to be profitable is just hearsay and supposition.
Merchandising on new events often produce no profit, as generally they produce more than they sell so end up with dead stock, believing they will make millions and end up losing millions.
Breaking down potential income streams is again pointless unless you can also break down expenses to go with them. I asked for a profit figure for a reason. A person/company who hides behind a revenue figure generally are hiding something and if they can shout from the hill tops how much they took they should equally be shouting out how much it cost them.
Don’t forget DC mentioned that they might have to pay more for some of the premium artists - hence why sponsorship is essential and getting a better streaming deal with the artists - and perhaps a higher ticket price. I reckon it will be profit equal to a six figure sum this year - hopefully seven figures in 2023..
Still waiting to find out, but there is already information in various RNS on that already if you take account of the various revenue streams and what’s been said. (I’ve not done any conversion between € $ or £.). But I personally doubt if it will be broken down into these streams as doing so is likely to be commercially confidential.
Ticket revenue. 65000 tickets at an average of €86. Gives €5.6 million. You have to take off the financing costs which we know is $1.75m for day 1, but we don’t know what the costs were for day 2, but likely to be less as we were told the breakeven for day 2 was lower. We know that Frankfurt 23 will be less contribution from KPE to the costs.
Merchandising. We know that the minimum revenue guarantee to KPE (£350,000?) was met, but difficult to work out what total revenue was based upon. The various merchandise sellers will have taken their cut including profit for them too, so likely a decent revenue figure. Not bad from a standing start, creating the brand, and only organic advertising. Likely to be more at future events, especially if they start selling the band merchandising.
Streaming. Broke even. With the plans for more notice on the streaming, to do their own filming, do that closer to the event, include special behind the scenes footage/events and to include more of each artist as well as the potential for live streaming, this could be a very significant revenue stream in the future.
Sponsorship. None so far as the festival was inside timings for annual budgets as well as advertisers would have been taking a punt on how successful it would be. We know they are in discussion with multiple brands for next years concerts so this could be another significant revenue stream.
Then there is the €200,000 management fee and anything they got from running the Korea fest over the weekend.
So we already know that they are tuning up the format to be more profitable for LVCG in the future. Will be interesting to understand what they are negotiating for future events too, perhaps an all up deal with SBS for the series of festivals being planned?
"but the reality is that the first kpopfest has proved that there is a market for this and that its profitable."
How profitable was it?
Excellent post MB10 - it’s not just this thread - so many threads now have one or two very active posters with either a grudge or issue with a company were they don’t hold any shares or ever say the reason why they post! I find it hard enough to find the time to post on the shares I hold let alone double the time posting on shares I will never invest in. Also it’s clear some get angry about their investment decisions and take it out on the companies - yet if they get so emotional re their bad choices then I suggest they leave it to an expert or invest in safer unit trusts!!
For people that are not interested, the trolls sure do an awful lot of gobbling off. Indeed they comment incessantly. Latest is acknowledging that KPOP is a worldwide phenomenon and an area that is due to grow globally, but that a $20 billion company like Live Nation dosen’t need LVCG to help them exploit the market. Yet that’s exactly what is happening. The $20 billion pound company is in a deal with LVCG to exploit the KPOP festivals being established. And anyone looking at the history of Live Nation will see that they grow by aquisition. Plenty of examples out there. Chimes with comments that LVCG are building a highly attractive asset to be sold.
The question is what are LVCG contributing? Well for starters they designed the concept of the KPOP fest, bringing KPOP acts that ordinarily themselves would not gain enough traction to fill a big stadium, into a format that can fill a stadium. LVCG have also put together the consortium that provides the stadium, the merchandising, the filming and selling the tickets (and yes that includes the $20 billion Live Nation) and it was LVCG that put the KPOP bands and the consortium together to bring the kpopfest into being. And it was LVCG that negotiated with SBS to provide the supply of KPOP acts for the festival, which includes a mix of big names and start up KPOP acts. So LVCG own the rights to the format, the sponsorship, the marketing etc for the future and are now engaged in tuning this model up (so LVCG make more profit) and rolling this out worldwide (2 concerts for 2022 secured already).
Meanwhile exactly the same trolls have gone from saying that KPOP is a niche thing where’s there no money to be made, that LVCG will never do a KPOP festival, to saying that it will be cancelled, to saying that even if it goes ahead they will only get an handful of tickets sold and then saying that they won’t repeat the success…. Anyone might think they had an agenda, but the reality is that the first kpopfest has proved that there is a market for this and that its profitable.
Plus it’s not dilution on a monthly basis - at least tell the truth (even if it has been too often for shareholder comfort and surely it has to end soon?)
It’s not as if he is sitting in his backside - three visits to S Korea in a month and I recall him saying he was going over there again this month - various news has been delayed but is still due next month. All I can say to posters so negative - I would no longer stay invested in a share were I can’t see any positives - I would sell and move on… plus most small cap shares are on their knees atm remember!!!
News is positive for the industries lvcg are involved in. Clearly lucrative, growth areas. Unfortunately for all concerned here none of that has translated to anything positive for lvcg to date, in terms of making any money.
But these negatives are already priced in. Chairman sentiment clearly baked into the SP. South Africa not happening next year priced in IMO as it isn't confirmed on the calendar. Also RE results from Frankfurt, the market isn't expecting much at all from here either IMO, i.e. insignificant profit.
All catalysts that could surprise on the upside IMO. As is StartART, where shareholders that were brought inside saw enough to uturn and back the acquisition.
He has it all to do but I think he knows that, and not as if the SP is flying and massively overvalued at the minute is it.
I do not understand. If the news for this company is to positive, why does the sp keep falling? We all know some of the reasons. 1) No one in the stock market trusts DC. 2) The shareholders see the value of their holdings being diluted on a monthly basis. 3) Investor presenations are a farse, showing an old man with little or no get up and go. 4) The broker keeps delaying his recommendation. All of which bodes ill.
No matter how good a company or its prospects, if it has a failing Chairman and board, nothing will save it.
https://seoulspace.com/top-20-kpop-entertainment-companies-best-of-2022/
K-pop is still bigger than ever. It is growing every day, not just in Asia but all around the world. Furthermore, Kpop Entertainment companies are reporting all-time high profits, and K-pop groups are getting global exposure. Therefore, Korea’s main asset still continues to be K-Pop as Kpop Entertainment companies continue to find new talent. Now, most of these KPop companies/agencies are looking to expand outside of Korea and into other Asian markets as well as North America and Europe.