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Radical Publishing Becomes Radical Studios, Values Itself At $84,000,000 (BleediLeaks)

Published Mon, 31 Jan 2011 15:10:38 -0600

Last updated Tue, 01 Feb 2011 06:08:42 -0600

I recently had the good fortune to find a confidential document regarding the financial plans and predictions for Radical Publishing from September 2010.

Good fortune for me, that is. Not Radical, who made a number of legal threats to stop me from writing anything about the document and accusations about its origin. I happened to find the document (now removed) via that wonderful invention Google. Still we talked it out, and I agreed to pull one very commercially sensitive fact. But there's plenty more to chew on…

Radical Publishing spends huge amounts of money creating very highly rendered comic books, paying its creators more than Marvel and DC do for the comics they create, putting up a massive stand at San Diego and hosting spectacular parties. Yet its presence on the comics shelf is minor and the announced films haven't moved into production yet. How does it do it? Investment.

The September 2010 document details the move from Radical Publishing and its film arm Radical Pictures to become Radical Studios, taking in new businesses that cover TV, stage, digital, games, social networks, music, East Asia, toys and more. This massive expansion is based on the idea of taking their creations and exploiting them in every media and every market going, create a very holistic approach to publishing, which remains at it's core. It even had a diagram.

Radical Studios is currently 100% owned by Blatant Entertainment, Inc., although this percentage of ownership was planned to be reduced by the proposed sale of a fifth of Radical. That amount listed to be raised was $21 million in investment, in 70 units of $300,000 each, investment to be completed by the end of February 2011, and including the investment, valuing Radical Studios at $84,000,000 in total. Mid-City Investment Holdings holds a 19% ownership in Blatant Entertainment for having invested $12,800,000. Other owners in Blatant Entertainment include Barry Levine on 31%, Jesse Berger on 30%, Matthew Berger on 6% and JKS Investment on 5%.

I have no knowledge as to how successful this investment plan has been, or if plans changed since September.

And, at the time of publication, the company only had $600,000 in the bank with a deficit of just under $10 million, 24 employees and projected operational expenditure at $12 million a year for 2011. But it also lays out all the current film projects… and that's where the money will be. And, in September 2010, the company saw income increasing from $12 million in 2011 to $233.35 million by 2016.

These properties include Oblivion, with director Joseph Kosinski (TRON: Legacy) attached to direct and Academy Award winning writer William Monahan (The Departed) writing the screenplay, Earp: Saints for Sinners, with director Sam Raimi (Spider-Man trilogy) attached to direct, Hotwire, with co-producing services by John Davis (Predator, I, Robot) and screenwriter Andrew Will (Homeland), Aladdin, with sole producing services by Radical, based on a screenplay financed by Radical and Freedom Formula: Ghost of the Wasteland, with film director Bryan Singer (X-Men, Superman Returns) and his production shingle Bad Hat Harry Productions producing, based on a screenplay by Mike Finch (Predators), respectively.

But Radical was also intending to significantly exploit e-publishing as Radical Interactive, with Nokia, Comixology, Panelfly and Scribd as Radical Interactive. Indeed it planned an iPhone game with Moyo Studios, Shrapnel, which was, as promised in the document, released in the last quarter of 2010. Radical was also using Interconnected Worldwide and M80 to exploit social networking to promote their brands, with planned console games to come.

As of September 2010, Radical employed 24 employees, 5 were in Radical Studios management and support staff, 5 in Radical Pictures' feature film development and production, 3 in Radical Music and 11 in Radical Publishing but the document states that another 12 hires are expected for their Interactive and Television departments.

Radical Asia is heavily involved here, not only exploiting the Far East market, but translating Radical content into other languages, for both print and digital sales.

Radical Asia, Pte. Ltd. is a subsidiary, Singapore-based business unit in partnership with Potato Production Group and Chinese information broker Matlock Stone. Radical Asia is focused on providing local strategy, foreign publishing rights brokerage, targeted intellectual property creation for the Asian markets, translation services and digital and new media strategies to expand Radical's brand throughout the region

Radical Toyz, has difficulty with spelling, but is trying to be a lot cannier if they do get a movie off the ground.

Radical Toyz is currently under contract with Atlas Merchandise for manufacturing and distributing toys, limited edition statuettes, apparel and other products. As such, Radical has established a precedent to reserve rights in its Feature Film Agreements for its specific product offerings.

Radical Television is also trying to be canny;

Radical Television will simultaneously be exploring opportunities with international co-production partners who can establish lead distribution in foreign territories, thus enhancing the deal structure for U.S. cable and network deals. This strategy gives Radical Television more control and ownership of its properties, following the model used by The Office and Ugly Betty, which are both examples of scripted formats that first established themselves in foreign territories and then went to network television in the U.S.

As is Radical Music.

In June 2010, Radical entered into an executive employment agreement with Steve Lindsey in the position of President of Radical Music, Inc., a wholly owned subsidiary of Radical. Under the executive employment agreement, Mr. Lindsey will be the executive who is primarily responsible for building the Radical Music brand name and generating revenue streams through music licensing and developing talent for entertainment media. In this regard, Mr. Lindsey's primary focus is on building Radical Music's publishing catalog for exploitation across motion pictures, film trailers, network and cable television, commercials, video games, radio and other entertainment media as well as entering into agreements with emerging songwriters and composers to acquire rights in and to musical compositions written and/or composed by such songwriters and composers for incorporation into Radical's catalog for licensing across all media.

It doesn't stop there. Radical Theatrical is developing a stage version of their Mata Hari project.

Radical has been developing numerous intellectual properties as potential theatrical productions in coordination with Tiwary Entertainment Group ("TEG") and CEO Vivek Tiwary… Radical's management has been working closely with Creative Artist Agency theatrical agent Corinne Hayoun to set meetings with playwrights, directors and producers to help streamline the process and identify the proper aesthetic approach to the property.

They also declared a desire to pursue a very specific Broadway musical, which I have agreed not to name while they pursue the rights. It would make for worldwide headlines if they get it, though.

Radical does also list the high risk factors to investing in Radical, with some harsh realities spelled out.

For at least the next two years, Radical's business, operating results and financial condition will be largely dependent upon the success of the Company's first film production and products related to that film production. Under the Feature Film Agreements, even if a film is critically acclaimed and an extraordinary box office success, Radical compensation would be very small compared to that of the motion picture studio. Further, it is possible that Radical would not achieve any significant revenue at all.

The services of such freelance artists will remain non-exclusive to Radical until a period of time that Radical's production requirements justify an exclusive contract with such artists. Additionally, there is no assurance that such freelance artists will abandon other clients to fully support Radical's production needs, or have the capabilities to support Radical's growth.

During the term of each Feature Film Agreement, the rights relative to each licensed Radical intellectual property will be available exclusively to said motion picture studio for all forms of theatrical motion picture production, all forms of television, all forms of home video and theme parks and attractions…

However, due to the termination provisions of each Feature Film Agreement, the intellectual property licensed to such motion picture studio will remain exclusive to each studio for at least 18 months and possibly thereafter.

Radical is not able to re-use any of the characters or elements of any of the feature films or related products that are not specifically reserved by Radical, and which are being developed under each Feature Film Agreement, without a license or grant of rights from said motion picture studio.

Of course, none of these, and many other risks laid out, are particularly unique to Radical. And if it has so many fingers in so many pies being flung at the wall, some of it is bound to stick.

And of course this is all old information. There is no news as to how successful this investment attempt was, nor what other investment the company may have received since. All we have is a snapshot of a company five months ago, planning to undergo a major change. And five months is a long time in comics, let alone movies, TV, digital, toyz and Broadway productions.

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