Question
Chameleon Network is a producer and distributor of motion picture films. It specializes in action adventure films popular with males, mostly in the teen and
Chameleon Network is a producer and distributor of motion picture films. It specializes in action adventure films popular with males, mostly in the teen and young adult market. While it has only been in business for seven years, it has produced several moneymaking hits as well as many more minor "B" films that are shown on cable networks and through the Internet. Chameleon Network has recently completed the production of five new films. This set of five films contains one film (Ultimate Adventures) that marketing research indicates will be a top box office hit. The other four (UA II, UA III, UA IV, UA V) are "filler" films that will be bundled with the hit and licensed to theaters for exhibition. To receive access to the hit, theaters must agree to show all films a minimum number of times. In July 2018, Chameleon Network entered into an exclusive contract with Spotlight Theaters, Inc. (Spotlight), a large theater chain with approximately 490 theaters across the United States. This contract provided in part as follows: Agreement: Spotlight is granted the right, license, and permission to display the five films listed herein during the contract period. In consideration of this contract, Chameleon Network will receive: 1. A contract (arrangement) fee of $6,000,000, payable $3,000,000 upon contract signature and $3,000,000 on September 1, 2018. 2. $600 for each film showing in each location. Contract period: The contract period shall be the six months commencing on September 1, 2018. Limitation on screenings: Spotlight agrees to show Ultimate Adventures no more than 42 times per theater and the four accompanying films (UA II, UA III, UA IV and UA V) no fewer than 18 times each per theater. Exclusivity: Spotlight shall have exclusive screening rights during the contract period. Chameleon Network acknowledges that an integral inducement in consideration of the contract is Spotlights interest in being the sole source, without competition from other theaters in the market, during the contract period. At the signing of the contract, Spotlight paid $3,000,000 of the $6,000,000. Spotlight sent checks to Chameleon Network for $3,000,000 on September 1, 2018, and $6,489,000 on January 20, 2019, along with an audited statement detailing the number of showings as of December 31, 2018. The following is a summary of that information: Film Number of Showings Amount Due Ultimate Adventures 8,490 $5,094,000 UA II-V 2,325 1,395,000 10,815 $6,489,000 In March 2019, Chameleon Network received a demand notice from Spotlight that all monies previously paid were to be returned or they would file a lawsuit. In their letter, they enclosed a newspaper clipping from a movie theater in Toronto, Canada that was advertising the set of five films for showing the second week of February 2019.
A)what is the value of the budget for 6 months?
B)what was the earnings(revenue) for 4months? (until December 2018)
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