What is the entertainment industry's? The "betting agreement" in the entertainment industry is what it is. That is, the military order, such as the end of 2018 to sign, commitment to their own in 2019 can make 100 million for the company, if the end of 2019 settlement time, the star did not earn to the beginning of the commitment of 100 million, then the remaining 20 million stars have to make up for it out of their own pockets. Because the company in the year, in order to help the star to reach the performance promised at the beginning of the year, gave a lot of resources and help, and finally the company is to realize a profit and share the money to its own shareholders, can not because the star is not capable of letting the company lose money. Of course if the star does not fulfill the performance target in that year, it means that the resources and investment on this star will be less in the coming year, or the existing resources on the star will be allocated to other artists of the same company.
The betting agreement is a concept introduced from abroad, if the meaning according to the direct translation should be ? Valuation adjustment mechanism? I don't know how it was first translated into betting agreement, probably because the name is too graphic, so it has been used until now.
Because in the acquisition of enterprises, there is always a lot of uncertainty in the future, then as investors always hope that the future risk is as low as possible, can not now hear the founder said the sky is full of silly investment money into the future how everything is unknown, so investors hope that there are some practical measures to safeguard their own rights and interests in the future, even if it can not be completely safeguarded, but at least can reduce some of the risks. The first thing you need to do is to get a good deal on a new product or service.
For example, if I am now an investor, there is a dairy company that wants me to invest in them, and their founders have made a beautiful PPT and depicted the future prospects of the company as a golden road. I said that could be, since the prospects of your business is so good, then I can invest, but you must be in the next five years, the compound annual growth rate can not be less than 50%, or you have to transfer your shares to me at a low price, otherwise I do not dare to invest. They said OK, and five years later the profit growth of this dairy company was as high as 90%. So everybody was happy. The name of the dairy is Mengniu.
At this time there was another restaurant chain looking for me to invest, this restaurant business history is very powerful, eight consecutive years of profitability in one year sales reached 1 billion. Then its founder promised me that I will soon have to go public, you are now investing in me that is the original shares, the listing of that how many times! I look can ah, if you can really listed that business is absolutely cost-effective, I give 200 million for your 10% stake, but I have to say goodbye to you, if it is not listed within the agreed time, you must be in accordance with the agreed price of the stock to buy back. This catering enterprise patted his chest and said no problem. As a result, a few years later, the agreed time came to an end, and this chain of catering enterprises still did not go public, and there was not even any hope of going public. Moreover, with the changes in the national macro-policy, the business was also in the doldrums, and so they had to buy back the shares that I had spent money on at that time in accordance with the original agreement. As a result, they didn't have so much money, and finally they could only sell the remaining shares in their hands to pay off their debts, and eventually lost the controlling interest of the enterprise. This enterprise is called South Beauty.