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Strategic Asset Allocation for a Fantasy IP House

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Executive Summary Strategic Asset Allocation  |  Investment Committee

Fund both ends of the risk curve.
Exit the middle.

Long-term growth for the House comes from pairing pre-sold franchise scale with cheap adaptation optionality. The $30–120M mid-budget band is where capital earns least and risk concentrates.

01
Objective
Compounding value over a 5-year horizon, judged on risk-adjusted return per dollar deployed, not on slate revenue.
02
Thesis
Durable value is bimodal. Tentpoles underwrite predictable baselines; small bets carry breakout upside. Assets priced between the two have neither efficiency nor global reach.
03
Allocation
55% franchise core, 30% emerging and experimental, 15% niche and catalog. Catalog is held as the cash engine that funds the cycle.
04
Governance
Three stage gates, scenario bands instead of point forecasts, and a hard stop rule: no project proceeds unless it survives the base case.
Recommended allocation
Barbell split, 2026–2030 plan
Franchise corePre-sold tentpoles, sequels, rights stack 55%
Emerging & experimentalLow-cost originals, option on the next franchise 30%
Niche & catalogEvergreen licensing and backlist cash flow 15%
Illustrative portfolio parameters prepared for committee discussion; not a market forecast or allocation mandate.
Confidential  |  Prepared for the Investment Committee  |  Source: market benchmarks per page footnotes 01
The Strategic Context Strategic Asset Allocation  |  Investment Committee

The 2026 market prices three different assets, not one slate

Multiples now separate by archetype and by rights-stack depth. Buyers triangulate three methods rather than averaging one, and each method answers a different question about how an asset earns.

REVENUE MULTIPLE, × TRAILING REVENUE 0x 4x 8x 12x Early-stage transmedia studio 1–4x Established graphic novel publisher 3–8x EBITDA MULTIPLE, × NORMALIZED EBITDA 0x 6x 12x 18x 24x Established publisher 6–12x Pre-sold adaptation franchise 10–20x+
Triangulate; do not average
DCF values contracted streams at an 8–16% discount rate. Comparable transactions price what the market clears at today. Option models price what a deal might unlock.
Adaptation is an option, not an event
Major streaming deals are modelled on probability weights of roughly 5–25%, adjusted by agency representation and genre trend signals rather than assumed as certain.
The middle is being repriced down
Projects in the $30–120M range are increasingly sidelined: they lack the cost efficiency of the low end and the global reach that justifies tentpole scale.
Where value is created: content-audience fit with proven demand per fan, depth of the rights stack across publishing, gaming and merchandising, and creator or agency attachability, which materially raises the odds an adaptation closes.
Source: ArticlesInvest, media IP valuation multiples (2026); Billions.live, valuing graphic novel IP (2026); Co-OpGP Studio, film & TV investment frameworks 02
The Investment Thesis Strategic Asset Allocation  |  Investment Committee

Long-term growth is bimodal. Capital allocated to the middle buys neither protection nor upside.

THE ENDS ARE FUNDABLE
Pre-sold franchises clear at 10–20x+ EBITDA because minimum guarantees and merchandising potential underwrite the base case before release. At the other end, $1–15M projects pair a bounded downside with genuine breakout potential.
THE MIDDLE IS NOT
Projects in the $30–120M band are sidelined across the market. Their economics are tough and their global appeal insufficient: too expensive to fail quietly, too small to guarantee reach.
OPTIONALITY COMPOUNDS
A basket of low-cost originals is a standing option on the next franchise, held at a fraction of the cost of acquiring one in the market. Option models price those adaptation events at probability weights of roughly 5–25%.
The barbell is not risk appetite. It is the only structure in which every dollar is doing one clear job.
EXPECTED RISK-ADJUSTED RETURN BY PROJECT SCALE
AVOIDED MIDDLE $30–120M $1–15M $30–120M $150M+ Relative risk-adjusted return Project budget Low cost, breakout upside Pre-sold scale, predictable baseline Schematic; curve positions relative, not projected returns.
Source: Co-OpGP Studio, portfolio-based approaches to film & TV investment; strategic decision frameworks; Billions.live (2026) 03
Framework Overview Strategic Asset Allocation  |  Investment Committee

Two deliberate bets at the extremes, one zone we decline to enter

FRANCHISE CORE 55%
Tentpole scale on pre-sold demand
SCALE FLOOR
Films $150M+; series $15M+ per episode
RETURN LOGIC
Predictable baseline underwritten by established IP
VALUE SIGNATURE
10–20x+ EBITDA when adaptation is pre-sold
Job: stability, reach and the cash that funds the rest of the portfolio.
AVOIDED MIDDLE
$30–120M
Mid-budget economics are unforgiving and global appeal is insufficient.
We hold zero target exposure here. Any mid-budget proposal must clear a franchise scale floor or be re-scoped to $15M or below.
EMERGING & EXPERIMENTAL 30%
Small bets on the next franchise
SCALE CEILING
Films $1–15M; series $1–5M per episode
RETURN LOGIC
Bounded downside against genuine breakout potential
VALUE SIGNATURE
1–4x revenue until audience demand is proven
Job: long-term growth and IP mining at minimal cost of failure.
THE CORE FUNDS THE BETS
Catalog and franchise cash flow finance the origination slate without new external capital at the portfolio level.
THE BETS FEED THE CORE
A proven low-cost property is re-underwritten as the next tentpole, priced in-house rather than bought at market.
NEITHER END IS FINANCED ON HOPE
Every commitment must survive its base case; no project is funded on upside alone.
Source: Co-OpGP Studio, portfolio-based approaches to film & TV investment (barbell strategy, avoided middle); ArticlesInvest (2026) 04
Portfolio Segmentation Strategic Asset Allocation  |  Investment Committee

Every asset sits in one of three buckets, and each bucket has its own underwriting standard

Blockbuster / Franchise
55%  of target capital
Emerging / Experimental
30%  of target capital
Niche / Catalog
15%  of target capital
DEFINITION Large-scale IP with proven audience demand and a deep rights stack across publishing, gaming and merchandising. Low-cost original IP: $1–15M features or $1–5M per episode of series, deliberately scoped below the mid-budget band. Evergreen backlist titles and niche properties with steady licensing demand and low incremental cost.
ROLE Core stability and cash generation; anchors the slate and carries reach. Long-term growth and IP mining; a standing option on the next franchise. Evergreen cash flow that funds origination and smooths an uneven release calendar.
VALUE DRIVER Pre-sold adaptation and merchandise potential; clears at 10–20x+ EBITDA. Bounded downside against breakout potential; valued at 1–4x revenue until demand is proven. Licensing and merchandising annuities with few new production dollars required.
PROGRESS EVIDENCE Minimum guarantees and pre-sales secured before production begins. Demand per fan that extends beyond the first release into a second season or edition. License renewal rate and breadth across distribution channels.
CUT TRIGGER Base case only clears if an adaptation premium is assumed. Two consecutive releases fail the audience-fit test. Renewal rate falls or revenue concentrates in a single channel.
Segmentation sets the underwriting standard, not the org chart. Capital share is a target range reviewed at each stage gate; shares are illustrative planning parameters for committee discussion.
Source: Co-OpGP Studio, translating PE/VC practice to film & TV investment; Strategy for Industry, creative-arts portfolio management; ArticlesInvest (2026) 05
Valuation & Risk Strategic Asset Allocation  |  Investment Committee

Scenarios replace point forecasts, and capital is released only where the base case survives

VALUE BAND BY SCENARIO, NOT A SINGLE NUMBER
Relative value FINANCEABILITY THRESHOLD Downside contracted rights only Base low-end adaptation, no merchandising premium Upside adaptation and merchandising upside Schematic. Band positions are illustrative, not projected values.
01 Build the band, not the number
Downside, base and upside cases are constructed for every asset. The committee sees the range and the assumptions behind each case, never a single-point forecast.
02 Apply the survival rule
A project is financeable only if the base case clears the threshold without credit for adaptation or merchandising. Failure of the base case is a stop, not a negotiation.
03 Price the option separately
Adaptation is a real option, not an event. Major streaming deals carry probability weights of roughly 5–25%, adjusted upward where an agency or established creator is attached and where the genre trend is running with us.
DISCOUNT RATE APPLIED
8–16%
Reserved for contracted and predictable streams. Uncontracted upside is never discounted as if it were certain.
Source: Co-OpGP Studio, strategic decision frameworks in film & TV investment; USA Business Times, selling creative IP (2026); Cinemas.top, NPV and risk models for blockbusters 06
The Waterfall Model Strategic Asset Allocation  |  Investment Committee

Gross receipts are not the return. The order of payouts decides it.

ILLUSTRATIVE REVENUE WATERFALL, % OF GROSS RECEIPTS
100% Gross receipts −15% Distribution fees −20% Prints & advertising −25% Debt service −10% Talent participation 30% Net to equity Every bar is a claim on the same revenue stream, ranked by seniority. Illustrative structure; percentages are placeholders for committee calibration, not a project forecast.
Off the top first
Distribution fees and prints & advertising are recovered before any participant is paid. A project can be a commercial success and still return little to equity.
Debt ahead of equity, always
Debt service sits ahead of every equity and profit position. Leverage raised to close a financing gap reduces the share of the upside that reaches the portfolio.
Talent participation changes the shape
Participation deals convert cash that would otherwise reach equity into a different payout profile. We model the waterfall, not the headline number.
A deal that looks strong on gross receipts can miss the equity hurdle once the waterfall is applied. Every asset in the portfolio is scored on the cash that reaches equity.
Source: Co-OpGP Studio, strategic decision frameworks in film & TV investment (waterfall modelling); Cinemas.top, applying NPV and risk models to blockbusters 07
Implementation Roadmap Strategic Asset Allocation  |  Investment Committee

Three phases, two gates: capital follows evidence, not the calendar

MONTHS 0–12
Establish the standard
Audit rights-stack depth on every active asset: publishing, gaming, merchandising.
Stand up the scenario-band model and the waterfall template as the single house standard.
Re-scope or exit existing commitments inside the $30–120M band.
GATE 1
Every active asset carries a base case that clears the threshold without adaptation credit.
MONTHS 12–24
Build the origination engine
Launch the emerging slate: $1–15M features and $1–5M per episode series.
Secure agency representation and creator attachments on the strongest properties.
Promote proven low-cost properties into the franchise development pipeline.
GATE 2
At least one emerging property shows demand extending beyond its first release.
MONTHS 24–48
Scale the core, monetise optionality
Move tentpole projects into production with pre-sales and minimum guarantees secured.
Extend licensing and merchandising across catalog and franchise properties.
Exercise adaptation options where probability weights have moved up on new evidence.
GATE 3
Portfolio clears its risk-adjusted hurdle; allocation shares are reviewed against evidence.
Release rule: no phase-two commitment is released until Gate 1 is cleared, and no phase-three capital until Gate 2. Phases and gates are the plan proposed here for committee approval, not observed market practice.
Sequencing and gate criteria are planning proposals for committee decision; phase durations are indicative. 08
Key Risks & Mitigants Strategic Asset Allocation  |  Investment Committee

Six structural risks, each with a named control before the first dollar moves

PORTFOLIO RISK MAP · LIKELIHOOD VS. IMPACT
PRIORITY ZONE · MITIGATE ACTIVELY ACCEPT & MONITOR 1 2 4 3 6 5 LIKELIHOOD IMPACT
RISK CONTROL
1 AI-driven content commoditisation compresses IP multiples; 3–6 turns of compression observed in music catalogs. Base cases carry no adaptation credit; catalog holdings are tested on evergreen demand; residual-value assumptions re-tested at every gate.
2 Adaptation option failure: the streaming or studio deal does not close. Adaptation is modelled as an option with 5–25% probability weights and never credited in the base case.
3 Fragmented rights stack across publishing, gaming and merchandising. Full rights coverage is a gate criterion before commitment, not a post-close clean-up exercise.
4 Creator and agency attachment does not materialise on priority properties. Attachment is treated as an explicit valuation signal; adaptation upside is underwritten only where attachment exists.
5 Mid-budget cost inflation erodes margin on projects that are neither cheap nor global. Zero target exposure to the $30–120M band; hard scoping floor at $15M for non-franchise projects.
6 Portfolio concentration in a single property or distribution channel. Single-property exposure is capped; catalog renewal rate and channel breadth are standing portfolio KPIs.
Watch item, not a modelled input: quantitative evidence on how AI-generated content affects the long-term terminal value of non-music fantasy IP is still emergent. We monitor the multiple signal rather than extrapolate it into the plan.
Source: Chartlex, music catalog valuation guide (2026); Billions.live, valuing graphic novel IP (2026); Co-OpGP Studio, portfolio-based approaches to film & TV investment 09
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