Phillip Covell

Phillip Covell
Chief Executive

Welcome to the 2018/19 proposal for an entirely NEW Global, Direct-to-Home Broadcast & Digital Media Network, with a focus on News markets with significant global demographics that are currently under-served and under-exploited. As a Startup, AVTN | NewsNet247 represents a completely NEW opportunity to invest in News Media. Two options for launch channel are offered:

AVTN – Aviation Television News, serving all Business and Consumer aspects of the Aviation Industry from Components to the Consumer Experience, offering commentary from multiple perspectives, and bridging the gap between Manufacturers, Service Providers and Consumers. With 3.8 billion global stakeholders this market is extremely strong with excellent demographics.

NewsNet247, offering a cross-sector market approach, featuring news in markets such as Aviation; Business; Entertainment; Financial & Investment Markets; Maritime, Shipping & Yachting; Oil, Gas & Energy; Technology; Transport; with the opportunity to explore other markets as opportunity and breaking news allow.

The Network will operate in a Global Entertainment & Media Market estimated to be worth US$2 trillion, utilising planned infrastructure for bureaus in London, New York, Singapore and the EU; with Amsterdam, Dublin and Tallinn under consideration for a locations form which to access the European Markets post-Brexit.

Global Broadcast reach to a prospective 541.3 million households worldwide is projected with a conversion to audience of approximately 0.8% or 4.43 million audience via comprehensive Satellite, Cable and IPTV services; IP Radio services to over 1 million listeners; and 1.37 million OTT service users.

Personnel and infrastructure for both AVTN and NewsNet247 is budgeted to be common and completely interchangeable for either prospective launch channel. Further interchangeability is introduced into planning of corporate structure and financial planning to provide further flexibility. Consideration of current Investment Market conditions has also been taken, and tiered budgets have been prepared to illustrate what is deliverable over a range of investment tiers and structures.

Each Investment Tier for AVTN and NewsNet247 is based on detailed, actionable budgets with, a flexible 15-24 month Pre-launch period for licensing, construction and recruitment, and 4 years of Transmission projections. The 2018/19 Revenue Models benefit from significantly improved Household Reach data acquired from satellite service providers. This has served to maintain management confidence in audience targets and income potential, with Deficit & Surplus calculations also subsequently improving. The business model continues to project strong financial results, and the growth in Aviation, News and Media markets also remains encouraging.

Project Strengths

  • Global presence supported by bureaus and facilities in London, New York, Singapore and the EU.
  • Accurate news and information of interest to all stakeholders for every channel market sector.
  • A wide-ranging audience of diverse ages and incomes attractive to marketers and advertisers.
  • Adequate allocation of infrastructure enabling future Channel, Network and Group growth.
  • Budget allocation to build a strong team experienced in Target Markets, Editorial Content, Broadcast and Business Management.
  • A Global reach multi-platform Broadcast capability and strategy (Satellite, Cable, IPTV, OTT).
  • A high level of automation, and contracted services reducing direct personnel costs, maintaining workforce flexibility and protecting against industrial action and acts of God, war or terrorism.
  • Ability to adapt and use project specifications to develop and launch any Broadcast or Media platform.

Funding Tiers & Options

The following tables illustrate the cost of each Budget Tier from a fully-funded position including the inclusion of projected broker’s fees for an IPO or ICO with allocation up to 12% of budget; followed by: a reduction of costs by the introduction of 100% leasing for the equipment assets; full costs without broker’s fees or leasing, in the event of stand-alone investment; Excluding fees, though retaining leasing; and finally the FAANG stocks option. All Options require additional Credit Facilities of £20m, though this is seen as entirely precautionary, and use of these facilities is not foreseen in current projections. Investment of at least 25% (up to 75% of the US subsidiary) is sought from the US in order to satisfy FCC licensing requirements.

Tier

Options

Fully Funded

Including Fees*

Introducing Leasing

Excluding Fees,

No Leasing

Excluding  Fees,

Inc. Leasing

FAANG

Tier #1

£198m

£178m

£172m

£155m

£150m

Tier #2

£172m

£158m

£150m

£136m

£126m

Tier #3

£154m

£145m

£134m

£126m

£112m

* Fees represent projected fees incurred in the raising of capital investment via Brokers.
Additional £20m Credit Facility required.

The FAANG stocks option was developed exclusively with investment by a major global technology corporation in mind, and requires the parent company to be in position to deliver a sizeable distribution network, and prospective audience reach by household of not less than 4.43 million watching audience globally per week. Therefore, while these options contain a budget for encoding and OTT distribution, they do not include any allocation to servicing Direct-to-Home satellite (DTH), Cable or IPTV distribution networks.

Illustrative Financial Projections

There now follows, summarised illustrative financial projections for Budget Tiers 1, 2 & 3 upon which detailed projections have been modelled. They set out the proposed flexible Pre-Launch period of 15-24 months, and 4 years of projected transmission costs and revenues. The Illustrative Financial Projections have been extracted from Part V of this Document and should be read in conjunction with the detailed assumptions contained therein. They are not intended to be forecasts and should not be relied upon as such.

The following tables represent the maximum funding Options for Tiers 1, 2 & 3 with 100% of assets retained by the Network and Broker’s Fees paid on achieving the required equity investment; or in the case of an ICO selling the required number of coins. Ofcom Fees are singled out over other licences due to the profit based element of charges. Consolidated Management Accounts for alternative variations including: leasing; no Brokers’ fees incurred; and FAANG backed investment are available in Part V of the Proposal.

London – EU – New York – Singapore Bureaus

Tier #1 • Trading Year

Year 1 End

Construction

Year 2 End

TX #1

Year 3 End

TX #2

Year 4 End

TX #3

Year 5 End

TX #4

£ 000’s

£ 000’s £ 000’s £ 000’s

£ 000’s

Turnover

134,328 275,758 297,689

314,495

Profit before Tax, Exceptional items*, NOL & Ofcom Fees

(104,315)

(24,571) 90,434 104,480

121,118

NOL (Net Operating Loss Brought Forward)

(111,989) (29,632)

(14,172)

Profit after Tax, Depreciation, Exceptional Items* & Ofcom Fees

(131,223)

(24,571) 17,122 53,452

78,003

Capital Expenditure

(44,053)

(153) (3,706) (3,836)

(3,913)

Exceptional Items

(26,907)

* The Exceptional Items in the 1st Year figures relate to the costs associated with Project Development and raising Equity Finance

London – EU – New York Bureaus

Tier #2 • Trading Year

Year 1 End

Construction

Year 2 End

TX #1

Year 3 End

TX #2

Year 4 End

TX #3

Year 5 End

TX #4

£ 000’s

£ 000’s £ 000’s £ 000’s

£ 000’s

Turnover

134,328 275,758 297,689

314,495

Profit before Tax, Exceptional items*, NOL & Ofcom Fees

(81,813)

(13,853) 104,129 117,209

130,078

NOL (Net Operating Loss Brought Forward)

(95,816) (23,636)

Profit after Tax, Depreciation, Exceptional Items* & Ofcom Fees

(105,600)

(13,853) 34,986 62,819

89,642

Capital Expenditure

(31,122)

(115) (2,765) (2,861)

(3,119)

Exceptional Items

(23,787)

* The Exceptional Items in the 1st Year figures relate to the costs associated with Project Development and raising Equity Finance

London & EU Bureaus

Tier #3 • Trading Year

Year 1 End

Construction

Year 2 End

TX #1

Year 3 End

TX #2

Year 4 End

TX #3

Year 5 End

TX #4

£ 000’s

£ 000’s £ 000’s £ 000’s

£ 000’s

Turnover

134,328 275,758 297,689

314,495

Profit before Tax, Exceptional items*, NOL & Ofcom Fees

(66,025)

(5,512) 112,942 122,373

133,975

NOL (Net Operating Loss Brought Forward)

 (5,459) (76,058) (17,565)

Profit after Tax, Depreciation, Exceptional Items* & Ofcom Fees

(87,652)

(11,071) 64,268 73,538

96,582

Capital Expenditure

(21,379)

(82) (2,643) (5,310)

(5,519)

Exceptional Items

(21,627)

* The Exceptional Items in the 1st Year figures relate to the costs associated with Project Development and raising Equity Finance

The FAANG Option

Consideration has been given to development of the project within the Content strategy of a major Technology Corporation in order to develop audiovisual content offerings to include News. The Project may be delivered as defined in this proposal or tailored to the requirements of the parent company.

Tier #1 • Trading Year (FAANG)

Year 1 End

Construction

Year 2 End

TX #1

Year 3 End

TX #2

Year 4 End

TX #3

Year 5 End

TX #4

£ 000’s

£ 000’s £ 000’s £ 000’s

£ 000’s

Turnover

134,904 271,736 304,350

321,533

Profit before Tax, Exceptional items*, NOL & Ofcom Fees

(96,417)

7,150 116,876 142,147

159,558

NOL (Net Operating Loss Brought Forward)

 (13,296) (70,101) (9,609)

(11,670)

Profit after Tax, Depreciation, Exceptional Items* & Ofcom Fees

(97,164)

(6,441) 47,185 100,261

111,313

Capital Expenditure

(44,053)

(153) (3,706) (3,836)

(3,913)

Exceptional Items

(747)

* The Exceptional Items in the 1st Year figures relate to the costs associated with Project Development and raising Equity Finance

Tier #1 • Cost per User (excluding Advertising Revenue)

Tech Corp

Annual Users

Year 1

/ Construction

Year 2

/ TX #1

Year 3

/ TX #2

Year 4

/ TX #3

Year 5

/ TX #4

Costs £97,164,135 £127,753,889 £154,859,400 £162,202,886

£161,975,137

 Last Published User Volume 

Google

3,500,000,000

£0.03 £0.04 £0.04 £0.05

£0.05

Facebook

2,200,000,000

£0.04 £0.06 £0.07 £0.07

£0.07

Android

(Phones / Tablets)

2,000,000,000

£0.05 £0.06 £0.08 £0.08

£0.08

Apple iOS

(Phones / Tablets)

1,300,000,000

£0.07 £0.10 £0.12 £0.12

£0.12

Amazon

310,000,000

£0.31 £0.41 £0.50 £0.52

£0.52

Netflix

117,580,000

£0.83 £1.09 £1.32 £1.38

£1.38

Roku

38,900,000

£2.50 £3.28 £3.98 £4.17

£4.16

Google Chromecast

36,900,000

£2.63 £3.46 £4.20 £4.40

£4.39

Amazon Fire TV

35,800,000

£2.71 £3.57 £4.33 £4.53

£4.52

Amazon

Prime US

26,000,000

£3.74 £4.91 £5.96 £6.24

£6.23

Apple TV

25,000,000

£3.89 £5.11 £6.19 £6.49

£6.48

* Figures exclude Satellite, Cable and IPTV Broadcast Coverage. All User Volumes Based on available data.

Use of Proceeds from the Initial Investment

The initial required investment and financial facilities received by the Network, net of expenses, is intended to be used to: (i) establish infrastructure worldwide; (ii) employ staff; (iii) acquire broadcast equipment; (iv) pay broadcasting licences; and (v) pay satellite and other transmission fees, as defined in each Budget Tier. All proceeds of forthcoming funding are receivable by the Network net of expenses, and are intended to be used as laid out in the consolidated budgets within this document. Additional credit facilities of £20 million are also required, though there is no expectation of a need to utilise the facility in current projections.

Timetable

From the point of achieving full-funding a flexible pre-launch period of 15 to 24 months for licensing, construction and recruitment is planned. The flexibility is prepared on the basis of maximum required budget, and is principally to account for flexibility required in the licensing period, though expectation is for a window to lunch in the region of 15 months. From the point of launch the projections reflect on expectations for the first four years of transmission, and their projected revenues.

Budget Considerations

The Project Budget Considerations are addressed here.

Executive Summary Download here.

 

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