Personal Reflection: Entertainment Business Finance

Over the course of the last month, I studied entertainment business finance and I wanted to take the time to discuss some of my key takeaways from this experience. In this class, I have learned that financing is an essential aspect of the entertainment industry, as it enables the creation, production, and distribution of content such as films, television shows, music, and other forms of entertainment. Without financing, the industry would struggle to produce new content and support the talented individuals who inspire us through their beautifully creative works.

One reason why finance is so important, specifically in the entertainment industry, is that producing and promoting entertainment content is unbelievably expensive. For example, the development and release of an album requires significant investments in talent, equipment, and marketing. Sometimes, these expenses exceed millions of dollars with no guarantee of a return, and for these reasons, it is critical to understand and apply sound financial practices to mitigate risk and influence the probability of a successful project.

In the entertainment business master's program, my class discussed the importance of financial statements, and how to use these statements to analyze and track financial health. More specifically, I practiced using liquidity, leverage, efficiency, and profitability ratios to better understand the differences between the live music industry and the recorded music industry. My class also discussed the time value of money and practiced our abilities to compare various contracts from a financial perspective. In addition to TVM, I also practiced my project breakeven calculations as these calculations are essential to any project that I may take on. Finally, I conducted research and completed a model pro forma financial statement for my event promotion company, Loading.doc (the pro forma will be available below for reference). Completing this pro forma financial statement gave me experiential insight into revenue forecasting, financial decision making, and finally industry benchmarking.

Wittler_EBF_ProForma_Finished_022023.xls

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