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Compass Records

Bruner, Robert F.,...

Case

Compass Records

Bruner, Robert F.; Eades, Kenneth M.; Carr, Sean

F-1488 | Published September 12, 2005 | 12 pages Case

Collection: Darden School of Business

Product Details

The cofounder of Compass Records, a small, independent music-recording company, must decide whether to "produce and own" the next album of an up-and-coming folk musician or simply "license" her finished recording. This case presents information sufficient to build cash-flow forecasts for either investment alternative. Discounted cash flow (DCF) analysis reveals that licensing will be the more attractive alternative unless the student assesses the value of the options for follow-on albums included in the "produce-and-own" contract.

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