“Valuation Adjustment Mechanism” in the Film Capitalization —A Case Study of the Movie “Lost in Russia”

Abstract

During the current investment boom, any Intellectual Property, especially of film, is one of the long-lasting destinations that capital pursues. As a result, the new model in the film capitalization, a high-priced bet agreement between the producer and the distributor, appeared in the capital market. This model exists some characteristics as high valuation and high risk, once encountered force majeure; they will make the whole film capital market vulnerable. This paper takes “Lost in Russia” as an example, through the analysis of VAM in the process of film capitalization, further explores the operability and risk of film capitalization.