Customers & Industries: LStar Capital

Even Spiderman Appreciates a Competitive Advantage -- @RISK Helps in Film Financing

  • Industry: Banking/Finance, Entertainment/Sports/Media
  • Product(s): @RISK
  • Application: Risk Quantification in Film Financing

Summary

Benjamin Waisbren, President and a shareholder of LSC Film Corporation, uses @RISK to analyze uncertainty behind financing major Hollywood films. The software helped finalize the funding and production of such blockbusters as Spiderman 2.

@RISK played a very significant part in my work on that deal. ...[B]ecause of @RISK, we did not hire any outside advisor or consultant. Our closing costs were about 20 million dollars lower than other deals.
Benjamin Waisbren, President, LSC Film Corporation

Using @RISK in negotiations ofr films and firms

The next time you settle in at the Cineplex to watch the latest Hollywood blockbuster, you may have @RISK to thank in part for its production.

Movies such as SpiderMan 2, The Interview, and 22 Jump Street have all benefitted from @RISK’s quantitative risk analysis—thanks to Benjamin Waisbren. Waisbren, a partner at the law firm Winston & Strawn, is also the President and a shareholder of LSC Film Corporation, which funds major film productions--such as V for Vendetta, Blood Diamond, and 300. In his role as a film financier, Waisbren uses @RISK in all his negotiations.

Waisbren, who worked in structured finance earlier in his career, discovered the software after the financial crash of 2008, which had left him and many of his colleagues adrift. “Honestly, it really changed my life,” says Waisbren. “I dug into the technology, and was able to develop a world class film financing firm.”

Last year, Waisbren relied on @RISK to navigate a $200 million co-financing deal with Sony. The deal gave Waisbren’s team, LStar Capital, a stake in nearly all of Sony’s movies. Waisbren says the success was in part thanks to Palisade’s risk analysis software: “I am happy to say that @RISK played a very significant part in my work on that deal,” he says. “I did the modeling behind it, and because of @RISK, we did not hire any outside advisor or consultant.” Additionally, because of the risk modeling tool, “our closing costs were about 20 million dollars lower than other deals.” After closing the agreement, Waisbren was then asked to be manager of the new film fund for LStar Capital.

Since then, Waisbren has continued to use @RISK to do statistical analysis on risk quantification volatility of motion picture businesses. For example, the software has helped him to make uncannily accurate predictions around how much a film will make on its opening day or weekend—or, it can help him predict how much money a film production will burn through in a certain number of months.

Waisbren, who also works in law, has also introduced @RISK to his firm and their clients, who are equally impressed with the sophisticated modelling capability presented by the software. “More people should be trained in how to use this tool in this industry,” he says, explaining that @RISK could hugely benefit law firms where complex deals are being negotiated.

Waisbren concludes with a final thought: “I’m really grateful for this product—it has provided a substantial competitive advantage in this business,” he says. “I’m a huge believer in this tool.”

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