THE NIGERIAN ENTERTAINMENT BUSINESS: ‘Professionalize the Hustle’ – PART 2

THE NIGERIAN ENTERTAINMENT BUSINESS: ‘Professionalize the Hustle’ – PART 2

You can read the “PART 1” here

Accountants

Accountants are professional number crunchers. For a business, and in particular a business seeking investment, an accountant’s skill is in tracing transactions, be they debits or credits, in cash or kind, and whether actually disbursed or received. All these transactions, and modes of transaction, must necessarily be recorded as entries  in a business’ ledger-book, profit and loss account, and in some cases balance sheet.

 

Additionally, with the widely documented shortfall in Federal Government revenue for the foreseeable future, internally generated revenue will increasingly be the focus of the government and a huge part of that focus is on tax revenue. Thus, the necessity of tax accountants (and lawyers) will be increasingly become more apparent.

This is also where a skilled accountant becomes an indispensable part of any organisation, be it full-time (ie in-house) and/or periodically with external accountants. In the case of auditors, namely, independent and government licensed (forensic) accountants, these professionals are by law required to inspect and report on the financial statements presented by all companies before their shareholders annually. These financial statements are also by law required to filed at the Corporate Affairs Commission, which will not accept any unaudited statements for filing.

 

In working with an accountant that understands a particular business or industry a company is able to work with the accountant to better understand the dynamics of his/her business. By having well kept books of account a business, and by extension an investor, is able to deduce some key information at a glance such as the strengths and weaknesses, areas of improvement/regression, and from where cash flow issues may or may not be arising.

 

ANNUAL FILING(S) AND RETURNS

Filing of annual returns and other regulatory obligations are becoming increasingly difficult to avoid for our mostly informal entertainment industry businesses and practitioners. As it now stands in Nigeria, companies that do not file or have not filed tax returns may have restrictions placed on them by the CAC that prevent such companies from a number of activities such as changing directors and altering share capital.

These may not sound important, but for Nigerian entertainment businesses, these restrictions can have very adverse effects when investment opportunities arise. Opportunities by way of: equity, i.e. shares, which may necessitate an increase in share capital and/or adding a representative of the investor to the Board of Directors; or debt, i.e. government/commercial loans application for which is increasingly predicated on eligibility criteria, with said criteria including audited accounts, minimum share capital requirements, and tax returns.

Furthermore, given the possibilities for the industry to attract investment by way of the capital markets, it is even more imperative that entertainment businesses get their preverbal houses in order in light of the even more stringent rules for companies sourcing investment from the capital markets. As it stands, aside from a handful of companies, there are no stakeholders in the Nigerian entertainment sector that would be eligible for any major capital investment; and it is only from such sources that the level of capital required to enable businesses to properly harness the profit-potentials of this huge market.

Government initiatives in the form of grants and soft loans have not been  particularly successful given substantially low take-up of same, in the most part due to a lot of the reasons cited above. Those very few companies that have managed to gain access to some of the available grants/loans (due primarily to their connections) are isolated, unconnected businesses that individually cannot make the necessary impact or provide the required stimulus to jumpstart the anticipated golden era of the industry.

 

Successful investors understand that the investment game is a gamble, and that there is always risk involved; after all, no pain, no gain. However, the common factors that most influence investment decisions bother on market opportunity,  risk assessment,  and stability of the proposed investment. Entertainment business owners need to look beyond immediate gratification and start to understand the fundamentals of how their respective businesses need to work in the modern, globalised world; and if they are incapable of gaining this understanding internally they must source suitably experienced professionals to advise them.

 

CONCLUSION

Nigerian entertainment businesses must begin to record, collate, and present all their transactions, with regard to both income and expenditure. This data can then be audited by a professional third party that will verify same. Until this becomes the rule and not the exception, our industry will continue in the same cumbersome fashion with individual and isolated success stories who will not even be able to fully maximise the leverage they gain with their success.

 

Creating and distributing content is not the issue; the real issue is the monetisation and formalisation, and professionalisation of said creation and distribution in order for entertainment businesses and the industry as a whole to attract more investment; foreign and domestic, equity or debt, private equity or capital market funds. Said investment, if managed and applied prudently would drive more growth, which would in turn attract more investment, and so on.

 

Thus, Nigerian entertainment businesses in this new year must ensure they professionalise their operations by documenting all their transactions, both figuratively in the form of books of accounts, and legally in the form of contracts, receipts, purchase orders, invoices, credit notes and other transactional documentation. The accounts and the said documentation can then be verified by an independent auditor which would then give them the necessary credibility to seek, secure, and retain investment. We have no choice but to take our respective businesses seriously and apply the necessary discipline and professionalism to attract more capital to the entertainment sector and the wider economy as a whole.

[Image Source via NotjustOk.com ]

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Fawehinmi Oyinkansola Esq.

Fawehinmi Oyinkansola aka The FozaDoza is synonymous to energy and passion. With keen interest in the entertainment and legal industrIes, Foza has been able to create a niche in both industries for herself. She obtained her LL.B and a Diploma in Security studies from the prestigious Babcock University Ilisan Remo, Ogun State. She was called to the Nigerian Bar in 2014.

She started out in the entertainment industry as Business manager for a school group called Pro Inc which became the favourite go to hip hop group in school. This spurred her passion for talent management and she has worked as a road manager at Monarc Talent Agency (an affiliate of Aristokrat Records), G- WorldWide Entertainment as business manager and currently is the General Manager at a 360 management company (Incubation Factory).

Her clientele spans across the music, film and telecommunications industries where she has effectively brokered license, distribution and endorsement deals. She has an impressive personal and professional relationships with all her clients which ensures she creates a comfortable working relationship. She leads the music and film divisions of the firm.

Foza is a vocal and passionate change agent, a non conformist and an adventurous risk taker. These traits have made her a known face as well as speaker on the most prestigious entertainment conferences stage. She strongly believes in integrity and is driven by family and legacy building. She has received numerous awards in relations to leadership and social activities.

Foza enjoys her live band music sessions, and a gathering of talented artiste anytime. She is the life of every party and has an excellent social skill.

Olumide Mustapha Esq.

Olumide Mustapha is a technology and entertainment attorney both in Nigeria and the UK. As an undergraduate he was a student of Sociology and economics at the University of Reading in the UK before embarking on his legal career by first qualifying – with Distinction – as a Solicitor from the College of Law UK, (and then practising for a period), with a particular focus on International Commercial Law,
Tax and Intellectual Property. Having been also called to the Nigerian Bar with Honours Olumide has since continued to focus on the areas of media, entertainment and technology law.

Olumide, in applying his vast legal and business knowledge in these sectors, has successfully initiated, negotiated and pushed through numerous transactions to the commercial benefit of clients. He has advised two of the “Big Three” global music labels on their planned entry into, and commercial strategy for, the Nigerian market; negotiated significant licensing agreements with a number of major Nollywood production houses and advertising agencies on behalf of a major music publishing company; consulted for one of the country’s biggest copyright collective management organisations; and worked with numerous technology start-ups in securing funding and scaling their businesses. Olumide is also the Chair of the Music Publishers Association of Nigeria.

On the back of such experience Olumide has also built over time a formidable network of contacts that allows his clients to enjoy a full suite of legal and business advisory services that include the ability to source funds, conveniently acquire/produce/licence valuable content, in addition to ensuring specialised due
diligence is carried out on all transactions and that good governance is practiced at all times; all with a keen understanding of the relevant market dynamics and client’s specific commercial objectives. Moreover, he has significant experience in litigation and has a lot of expertise in utilising the Nigerian court system to ensure client’s rights are protected and enforced at all times.

Never being one to shy away from sharing his professional thoughts, opinions, and analyses, Olumide is regularly featured in various media to provide his views and analysis on the legal and business issues surrounding the Nigerian entertainment and technology industries. Such media outlets include Channels TV, TVC, NigeriaInfo FM, Business Day, The Guardian, Techpoint Africa, and the African
Venture Capital Newsletter amongst others.

Olumide’s aim is to use his years of experience and expertise in international commercial and intellectual property law related matters, and strong network of contacts – both foreign and domestic – to contribute to the legal development of Nigerian enterprise structures and governance, and general business practice; thereby pushing the country closer towards fulfilling its socio-economic potential.

Iredumare Ojengbede Opeyemi

A graduate of Obafemi Awolowo University Nigeria (LLB) and University of Strathclyde, Glasgow (LLM) is a legal practitioner in Nigeria with over six years of experience in intellectual property, telecommunication and cyberspace Law.

He is a cyberspace, media and entertainment researcher with keen interest in Music, Film and Television, digital rights and personal data protection, intellectual property protection, creative financing, Media Advocacy and information literacy on the digital space. A cultured, informed and disciplined legal practitioner, who prides himself as a strategic solution executor, an expert in identifying root challenges and creating specific market/territory based solutions to cyberspace and digital challenges. He is always constantly seeking growth opportunities and self-improvement initiatives as a team player working in and for goal-oriented organizations.

Iredumare has spent the last two years facilitating multimillion naira deals for his clients across catalog licensing, catalog acquisition, intellectual property estate valuation as well as developing music business models for various value chain members in the African creative industry. Iredumare enjoys reading and having solution driven conversations with like minds.