Yellow Brick Mess. How the Legends of Oz: Dorothy's Return producers pulled off a "The Producers" like scam

[grim22]

This is an awesome read. The producers of the movie managed to entice people into investing by basically making stuff up completely. Click through for the actual presentation they gave to potential investors.

 

http://www.thewrap.com/legends-of-oz-box-office-flop-investors/

 

TheWrap investigates a movie that raised $100 million from private and often novice investors, and made just $9 million at the box office
 

Last month the animated movie “Legends of Oz: Dorothy's Return” became one of the biggest computer graphic box office flops of all time, and was yanked from most theaters almost immediately.

Last weekend, it made just $36,408.

But according to an investigation by TheWrap, the movie's producers and fundraisers fared far better than the film's investors, who may have collectively lost up to $100 million, while the producers and fundraisers earned tens of millions of dollars, according to SEC filings.

Alpine Productions, which produced the film, told investors that the film could have massive returns, according to one of those investors, court documents and investment documents obtained by TheWrap. Instead, it grossed $8.8 million worldwide on what the producers told investors was a $70 million production budget.
 

In the presentation, they projected anywhere from $720 million to $2.04 billion gross revenue on film content alone (theatrical, home video and cable), and for the franchise, which included merchandising and sequels, to have a return on investment from 324 percent on the low end to a high of 1,180 percent.
 

Only in a small margin at the bottom of the final page of the presentation's projection section was there any acknowledgment of the riskiness of the venture, and the individuals close to the project told TheWrap that many investors had little grasp of the risk that they were taking, statements backed by court documents.
 

According to the cease and desist from Washington State, “at least one Washington investor received profit projections forecasting a minimum return on investment of 162 percent,” and “also received materials featuring the covers of DVDs of highly successful animated films such as ‘Toy Story,’ ‘Finding Nemo,’ and ‘The Incredibles.'”
 

This story is repeated in many other court orders and legal filings, including in the states of Texas,Alabama, and California, where Alpine was found to be violating a 2009 cease and desist in 2011. The state filings note that the securities were unregistered, as were the salespeople.
 

Centineo, however, says that he was very clear with the people he was pitching that they could lose their entire investments, and that projections were based on a formula that he declined to specify

 

 

  ECOZ Presentation

 

Edited June 25, 2014 by grim22

[Ezen Baklattan]

Geez, what a mess this film turned out to be. The producers really did try to make it seem as though they would run it to the ground. A virtual world, really!? 

[BK007]

lol.

 

You must be pretty daft to invest in something without doing any homework. $2B? lol.

 

But, I'm all for Oz's production company going bankrupt and producers being jailed. The less Enron scammers there are out there, the better.

[BK007]

Yikes. If that was the presentation that they used...I mean, you kinda deserve to lose your money if you're going to believe that. What does World of Warcraft have to do with Oz? What does anything in that presentation really have to do with the movie they are selling?

[grim22]

Yikes. If that was the presentation that they used...I mean, you kinda deserve to lose your money if you're going to believe that. What does World of Warcraft have to do with Oz? What does anything in that presentation really have to do with the movie they are selling?

 

It is a work of beauty though. A lot of words and figures which mean nothing.

[AniNate]

 

  ECOZ Presentation

 

That presentation would've gotten a C- in high school.

[Impact]

Springtime for the Wicked Witch of the West!

[Jim Shorts]

Prana Studios, which did the animation, is a legit company though, having done all the Tinkerbelle movies for Disney.  

[Fancyarcher]

Anyone read the comments on that page? Some of them are actually from people who worked on the film and are trying to save their asses.

 

LMAO!

Edited June 25, 2014 by Fancyarcher

[Accursed Arachnid!™]

Unfortunately, this is not exactly atypical of Hollywood accounting. Forest Gump made 677m WW on a 55m production budget, yet Paramount says they lost money so they didn't have to pay the writer of the novel:

 

 

http://filmschoolrejects.com/features/6-things-the-film-industry-doesnt-want-you-to-know-about.php

 

 

Winston Groom, the writer of Forrest Gump was told that the film based on his work wasn’t profitable. Of course, he got the last laugh when they came to him asking if they could turn the sequel, Gump and Co. into a film as well, and he reportedly told them, “I cannot, in good conscience, allow money to be wasted on a failure.” In other words, “Go fuck yourself.” 

[DAR]

720 mil to 2.04 bil. Just a tad off

[filmlover]

Did they ever really think that this had potential to do over 2 billion dollars?! If so, I'll have whatever it is they're having.

[Accursed Arachnid!™]

720 mil to 2.04 bil. Just a tad off

 

 

I'm sorry, but if a millionaire fell for that...

 

[baumer]

I don't feel sorry for the investors at all.  If they invested money on the film based on that presentation, which is a well done one imo, then they deserved to lose money.  Any one of us here can tell you that film is fickle.  There are no guarantees.  How can a film about a man in a hockey mask killing people be a massive property while a special effects extravaganza from the makers of The Matrix starring John Goodman, be a complete bomb?  Point is you just don't know.  All they had to do is research other films that didn't quite cut it,l like Final Fantasy.  Yes, ECOZ didn't market the film well.  But the investors still should have known it was a huge risk.

[Accursed Arachnid!™]

A pirate movie starring Geena Davis and Matthew Modine by the director of Die Hard 2...what could go wrong with that?

 

Answer: Everything.

[Accursed Arachnid!™]

Although when the summer scheduled Titanic was delayed, news stories all focused on what could be wrong with the then record 200m production. So, I guess you never do know when one hits the movie lottery...

 

Edited June 26, 2014 by Accursed Arachnid!™

[baumer]

Although when the summer scheduled Titanic was delayed, news stories all focused on what could be wrong with the then record 200m production. So, I guess you never do know when one hits the movie lottery...

 

 

But that's the thing, you just don't know.  Anyone who believes their million dollar investment in a film is easy ROI, then they deserve to lose that money in the first place.

[Water Bottle]

Unfortunately, this is not exactly atypical of Hollywood accounting. Forest Gump made 677m WW on a 55m production budget, yet Paramount says they lost money so they didn't have to pay the writer of the novel:

 

 

http://filmschoolrejects.com/features/6-things-the-film-industry-doesnt-want-you-to-know-about.php

 

That's a bit different though in that's the studio (distributor) rather than the production company (the producer). I can't speak to a production company's accounting but Hollywood accounting is generally exclusively applied to studios in my experience of learning about it.

 

Prana Studios, which did the animation, is a legit company though, having done all the Tinkerbelle movies for Disney.  

 

I don't think anybody is doubting that the people these producers hired are legit. Only the producers themselves.

[Accursed Arachnid!™]

That's a bit different though in that's the studio (distributor) rather than the production company (the producer). I can't speak to a production company's accounting but Hollywood accounting is generally exclusively applied to studios in my experience of learning about it.

 

 

 

I said Hollywood accounting, not studio accounting. Producers are probably more prone to shady dealings than studios. I think the problem is my using "Hollywood accounting" as a broad term to describe corruption in Hollywood.

 

[Gopher]

They projected MINIMUM 200 million dollars domestic. And a MAXIMUM of 600 MILLION DOLLARS domestic. They must have thought their investors were just total morons.