Dallas Jenkins, the director, and Chief Creative Officer of The Chosen, a very popular evangelical Christian multi-season series about Jesus and his disciples, is using the show's huge popularity to redo his deal with his production backers. The Chosen claims to be the largest crowdfunded media project of all time - all episodes in at least Season 1 were originally funded by the audience. But so far there seems to be little light on its actual returns for its crowd funders.
Jenkins' company, The Chosen, LLC, signed a new Content License agreement on Oct. 18, with Angel Studios, the Mormon production company that advised Jenkins on his crowdfunding efforts, and the latter filed updates with the S.E.C.
Based on information available from both Angel Studios and The Chosen, LLC, it looks like what used to be a 60% / 40% deal, in favor of Angel Studios, is now a 40% / 60% deal in favor of The Chosen. But there are a huge number of caveats and marketing cost exemptions.
To be clear, I am not an entertainment lawyer, so take this analysis with a grain of salt. One thing is for sure - the new deal is much more complicated than the prior agreement before The Chosen became so popular. Moreover, the Chosen app now seems to be under the umbrella of The Angel in online stores.
The Chosen finished Season 2 last year and is now getting ready to release the full season 3. In fact, the first 2 episodes of Season 3 are now playing in movie theaters.
The Chosen Return on Investment (ROI)
So far, the Chosen company has not said what its crowdfunding investors have made - at least on its website. In addition, the Angel Studio parent company apparently went through bankruptcy and has now emerged from it. It's not clear from their website how the original crowdfunding investors actually made out as well.
But one thing is for sure. Both companies are making good money. Even though they are privately controlled, both have to file annual documents with the SEC.
For example, in 2021, The Chosen made revenue of $49 million and a net income of $25.9 million, based on its Form 1-K filing with the S.E.C. In addition, Angel Studios, Inc. made $122.79 million in net revenue and $17.12 million in net income, based on its 2021 1-K filing.
Amplifying Light on Returns
Investors in both companies' crowdfunding offerings might be wondering what their ROI has been. So far neither 1-K filing has indicated that any dividends were paid out to investors of their common units.
However, the companies may have paid out amounts as obligations or debt on their balance sheet, either in note form or as preferred units. A cursory read of both companies' financial statements does not indicate that this has happened yet. However, again, this is not a definitive statement, as their financial statements are very complicated.
In any case, neither company has highlighted the ROIs their crowd funders have made. For example, neither company's website has clearly stated what their crowd funders have received, either as a percent of principal amounts invested or as an ROI metric, on their respective funders' investments.
That certainly seems a little odd, especially for companies that claim to "amplify light." In fact, Angel Studios now seems to be heavily relying on traditional VC financing for its future seasons of The Chosen and other projects.
The Chosen's director, Dallas Jenkins, has said he plans on doing 7 full seasons of The Chosen series. So far, his investors, as well as Angel Studio investors, might be in the dark about what that may mean for them.
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Mark R. Hake, CFA, writes articles on national and local news, stocks, and market events at InvestorPlace.com, Barchart.com, Medium.com, and Newsbreak.com as well as TalkMarkets.
