Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 123

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               In making his income projections, Mr. Wagner considered the            
          age of the EBD film titles in choosing between the higher mean              
          and lower median gross units shipped from the AMR data:                     
          “Typically, this step in the process would have been performed              
          using the mean.  However, the SMH titles were older; and                    
          therefore; the number of gross shipments was determined to be               
          lower than the mean indication from the AMR data.”  On this                 
          basis, Mr. Wagner used the median gross units shipped and median            
          wholesale prices per unit that the AMR data suggested.                      
          Nonetheless, it appears that most, if not all, of the 270 film              
          titles in the AMR data were recently produced.  For this reason,            
          we are not persuaded that choosing the median over the mean gross           
          units shipped and wholesale prices per unit from the AMR data               
          properly accounts for the age of the EBD film titles.  Instead,             
          the age of the EBD film titles suggests that the gross units                
          shipped and wholesale prices per unit for those film titles would           
          be at the lower end of the spectrum of the AMR data.  Insofar as            
          Mr. Wagner relies on the median data, he has overstated his                 
          projections.                                                                
               Although Mr. Wagner did not assume any theatrical releases             
          (e.g., releases to movie theaters) in his expert report, in his             
          rebuttal report he points to certain data indicating that 16 of             
          the EBD film titles were theatrically released in the U.S.                  
          domestic market and 22 of the film titles were theatrically                 






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