In this week’s column, California Sports Lawyer® CEO and Managing Attorney Jeremy M. Evans examines how fan investment is moving audience participation to the beginning of film financing and creating new opportunities for filmmakers, investors, and entertainment newcomers.
Fan investment can lower the barrier to entry for creating entertainment, potentially allowing creators to reach audiences and attract financing without first securing representation. Representation can then add value once the creator is inside the proverbial room.
You can read the full column below. (Past columns can be found, here).
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Legion M has a novel business model. Through its investment offerings, fans can purchase stock in the company, invest in its Film Fund, or invest directly in individual films when those opportunities are available. These offerings allow fans to support financially the entertainment they want to see developed, produced, and distributed.
The opportunity is reminiscent of Green Bay Packers fans purchasing shares in the franchise. Packers shares are actual common stock, but they do not pay dividends and are generally purchased as an expression of support rather than for financial return. Legion M investments, by comparison, may provide a financial return but also carry the risk of loss. Certain direct film investments may include benefits such as having the investor’s name attached to the credits. In some ways, the model allows fans to participate in the physical production and distribution of entertainment, just as someone might use generative artificial intelligence to create content.
Traditionally, films are financed through a combination of studios, equity investors, lenders, distributors, tax incentives, and corporate partners. Some A-list actors invest in their own films and series or in projects they believe will be successful with audiences and/or tell a story that they are passionate about. Depending on the offering, Legion M investors may invest in the company, an individual production, or the distribution of completed films. This allows Legion M to seek audience support before a project is created or, through the Film Fund, before a completed film is distributed.
Legion M partnered with Ketchup Entertainment to support the theatrical release of Coyote vs. Acme, which had earned an estimated $47.8 million domestically through September 13, 2026. The Film Fund allocation for the movie sold out in less than 48 hours. This form of fan investment differs from donation-based or reward-based crowdfunding because fans contribute capital with the possibility of receiving a financial return, but they also accept the possibility of losing their investment. Under the Legion M Film Fund, investors purchase an interest in the release of finished films. Investors receive a portion of sales revenue until they recover their principal and a predetermined return, subject to the offering terms and investment risk.
The audience becoming a part of the business through financing is important because it allows fans to feel further connected to the film or television project. It also allows people outside the entertainment industry to invest. Fans can become ambassadors for a project because they have both an emotional and financial interest in its success.
Fan investors should be aware that an investment does not guarantee success. An investment also does not provide creative control unless the offering or another agreement expressly grants that authority. Audit, recoupment, and payment provisions are important because distributors, lenders, production and marketing expenses, and other participants may be paid first. The definitions of revenue and profits, along with the payment waterfall, may be among the most important contractual provisions in Hollywood film financing.
This audience-focused film financing model complements traditional film financing and is unlikely to replace it at this point. Studios, producers, and others involved in audience fundraising must explain investment risks clearly and comply with applicable securities laws and offering requirements. Securities laws, disclosures, and clearly written contractual terms are needed when audiences are asked to invest. A larger investor base may also create administrative and communication obligations even when investors do not receive creative control.
The audience has always financed entertainment through tickets, subscriptions, advertising attention, and purchases. Fan investment moves some of that financial participation to the beginning of the process, creating opportunities for filmmakers and audiences. Alternative financing can also give startups and entertainment newcomers another opportunity to succeed. It can lower the barrier to entry, which should be applauded, for creating entertainment, potentially allowing creators to reach audiences and attract financing without first securing representation. Representation can then add value once the creator is inside the proverbial room.
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About Jeremy M. Evans:
Jeremy M. Evans is the CEO and Managing Attorney at California Sports Lawyer®, representing companies, creators, and talent in dealmaking matters across entertainment, media, sports, and intellectual property. An award-winning attorney and industry leader, Evans is based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.
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