Liza's Headband said: "itsjustmejonhotmailcom said: "Liza's Headband said: "Except that the weekly nut (fixed) isn't dollar-for-dollar equivalent to the weekly operating expenses (variable), which can fluctuate by a small -- OR LARGE -- margin depending on a number of factors including marketing & advertising spending campaigns, interest fees and/or payments on any loanstaken out on the production (if applicable), unexpected or "non-budgeted"expenses for sundry, etc."
That's not quite right as I understand it. While a week with more advertising than usual will affect cash flow for that week, most advertising expenses are amortized over a set period of time and so the weekly charges against the budget remain pretty consistent. And loans are paid back from profits, so those only get paid back on the weeks that there is a surplus."
Then you misunderstand. We're talking about two different things here but, please, feel free to educate me on an arenaI already work in."
I wasn't trying to be snarky and I'll give you the benefit of the doubt that you weren't either. I don't work in the industry, but I've invested in many shows. And I've made priority loans to two shows. In both cases - different shows with different lead producers - the language in the loan docs was that they were to be paid back only when the show was in profit. My attorney, a theatre attorney, told me that is the standard arrangement. My knowledge of the advertising budgets is limited and comes from seeing the budgets, sitting in on weekly ad meetings, and speaking with the GM's - but they aren't sharing everything with investors of course. I'm trying to share things here others might find interesting and to explain them to the best of my knowledge. Since you work in the industry you probably know a lot more than I do, I'd encourage you to help us all understand these things better, I think everyone here would find it interesting and appreciate your insights :)
