Forum - View topicPR: Navarre Corporation Reports Financial Results for First Quarter of Fiscal Year 2011
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_V_
 Posts: 619 |
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This news release no longer includes "FUNimation" information because legally they're counted separate from Navarre now; fair enough. But what can we glean from this?
....Navarre paid $125 million for FUNimation in 2005 (and that was in 2005 money) Retailers I've e-mailed (who wish to remain anonymous) estimate FUNimation's current worth at only $25 million, and question if Navarre will actually be able to find a buyer in this market, and at the prices they need to sustain their losses. Beyond the simple cost of purchase, Navarre kept pumping money into FUNimation to keep it afloat as other companies collapsed. FUNimation didn't have some special strategy for dominating the market, just that they stayed afloat when others sank; increasing share of a shrinking market. and Navarre's current debt is in the $25 million range, and only working off something like 3 million of those a year. ...I think there's going to reach a point when Navarre starts seeing FUNimation as a white elephant. Particularly, while I"m glad FUNimation picked up so much stuff at Anime Expo, and announced both Summer Wars *and* Rebuild of Evangelion 2.22 at Otakon.... ....how can they *possibly* afford to get *this much* stuff? I was just relistening to the ANNcast from last December when the Geneon marketing head was talking about the anime boom, and it seems....eerily reminiscent of how during the boom years, ADV and Geneon would license *everything*, even at a short-term loss, in the hopes that A-the titles would make all the money back, and B-....licensing EVERYTHING was a strategy meant to deny rival companies access to resources; to starve them out. the idea was that if you spend all of your money licensing *everything* it will drive the competition out of business, and then in a competitor-free environment you are free to make up the losses you took licensing that much stuff. But that didn't work in the 2003-2004 boom years....how can FUNimation make it work *now*, when demand is lower? A lot of these old Geneon rescues, while nice....well, how can they generate that much demand? Look, stuff like Hetalia, Black Butler, Hellsing, Summer Wars, Eva 2.22....yes, those are popular. But then again, in the boom years, we were all saying "how can ADV fail, they've got Eva!" or "How can Geneon fail? They've got Hellsing!" Well the worry is that they may have paid too much for some of these licenses. I'm *not* predicting the "collapse of FUNimation" that's absurd. But what I'm warning is....I don't think FUNimation can keep up this level of expansion in this marketplace, particularly when they're for sale by a parent company that kind of wants a return on the money they kept investing into FUNimation. I do think FUNimation will be "the dominant company" for years to come....but I worry that they're overexpanding again, possibly paying too much for some licenses ( NTV forcing another Eva theatrical run down their throats will not help), and that....the playing field might "level off" a bit in the next year or two. |
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Shichimi
 Posts: 349 |
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I kind of understood that to be the reason why FUNi are moving into coproductions based on popular western IPs, and also developing a social networking site. An attempt to expand their customer base, style of thing.
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dragonrider_cody
Posts: 2541 |
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Hey, I remember reading a lot of those comments. I also remember reading that Bandai would always be fine because they had Gundam. 
I honestly think Funimation is worth more than $25 million, but I don't think they are worth anywhere near the $125 million that Navarre paid for them a few years back. They may have around a 50% market share, but you also have to factor in that the R1 anime market is about half the size it was 5-6 years ago. Market cap wise, they are probably worth significantly less than ADV was in it's heyday of the early and mid 2000's. Of course, one has to remember that the market is still fairly bad, retail is still struggling, and DVD sales are continuing to decline. Funimation is unlikely to experience any amount of profitable growth for sometime. Navarre will likely have trouble finding someone who is willing to pay what they want. I'm still curious as to who would be interested in Funimation, especially since Navarre hasn't mentioned being contacted by any suitors. Even though they wouldn't announce who was looking at them, during earnings reports companies will usually indicate how many if any parties are looking at a division that is up for sell. So far, they've been completely silent on the issue. I realize some people are looking for a big company like Viacom, News Corp, or Warner to pick them up, but I believe that is extremely unlikely. Funimation really has nothing at all to offer an entertainment company that size. Everything they do, a major studio could easily do themselves. They bring less money in per year than one large box office will do in the run of a few weeks. Not to mention if they were acquired by a company with a large in house studio, they would likely merge a lot of Funimation's operations in house, basically making them little more than a home video label (think Manga in the US.) |
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Shiroi Hane
Encyclopedia Editor
 Posts: 7584 Location: Wales |
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For a start, I believe these days there are less of the, to quote Hugh David on the death of ADV UK, "unrealistic licensor expectations and ridiculous minimum guarantee fees", and there are less bidding wars. I could swear that rather than "pumping money in" FUNimation was reported to be one of Navarre's better performing operations. Also, "How can FUNimation fail? Thay have DBZ!". |
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Tempest
 I Run this place.ANN Publisher  Posts: 10463 Location: Do not message me for support. |
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Retailers ? Seriously ? Retailers ? I love anime retailers. A few of them are good friends. They know their businesses. But unless the retailers you e-mailed happen to have experience in business valuation, a masters degree in finance, or... Right, you get the point. Anyways, $25M is the most laughable valuation I've heard in ages. -t |
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hissatsu01
 Posts: 963 Location: NYC |
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Boooorrrrriiiiinnnnngggg. U gots yer fancy book lernin', I gots mah gut. And mah gut sez 25M. Now whos you gunna believe? |
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