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Valuation of Classic Fictional Character

Background

A highly recognizable fictional character with a long-term presence in books, film, and theme parks had generated billions of dollars in merchandising and other revenue. A large entertainment company utilized the character for many decades, after which a dispute involving copyrights, trademarks, and license agreements relating to the character arose.


Our Analysis

Intensity conducted a valuation of the fictional character in the marketplace. Intensity valued intellectual property rights in a variety of commercialization contexts including direct-to-retail licensing, product licensing, film rights, home video rights, theme park admissions, and theme park merchandising, among others. Intensity calculated the portion of revenues attributable to the character through these diverse revenue streams.

Intensity also evaluated a number of economic benchmarks to inform on marketplace value. Examples of such evaluations included acquisitions of other character brands and the financial performance of fictional characters with similar magnitudes of consumer awareness and popularity.

As part of its work, Intensity performed an analysis of reported merchandising revenues and corresponding royalties. Additionally, Intensity evaluated unearned royalties in the form of advances and loans on anticipated future royalty streams, as well as how company-specific accounting practices related to royalty reporting under the license agreement. Furthermore, Intensity provided a quantitative analysis of the economic reasonableness of a proposed interpretation of certain contract language in a license agreement relating to the character.