Boulevard of 77-Page SEC Filings

On March 25th of last year I volunteered as an extra in Nimrods, the Green Day-produced feature film that came out last month. The filming was at the Palladium in Los Angeles. That morning I stood in line for an hour or so with other extras before being shepherded to a bunch of white tables where I listened to a few super-fans soberly belt out the hits.

Afterward I got to watch Green Day repeatedly perform a couple recent singles while the actors and camera crew did their thing. During break they sent us back outside. It was very hot that day and the sandwich they gave me was terrible.

So I left early and drove back to Orange County.

The movie—about a teenage band driving cross-country under the illusion that they're opening for Green Day on New Year's Eve—grossed $910,110 in its opening weekend in over a thousand theaters, $899 per. As my wife put it, it's "a passable watch," which was much better than we had expected.

The day before I saw the movie I received an Instagram ad from a company called Legion M, which co-distributed the film, along with Inaugural Entertainment. Legion M sells "community" and fan perks in exchange for money they use to make and/or distribute films. It uses crowd-funding to create LLCs and issue shares to fans.

When I first read the ad, I was, I admit, shocked but not surprised.

Green Day isn't shy about selling. They licensed action figures, Funko Pops, and a videogame. A deal with 7-11. Stickers. A dog bowl. A mask of their bassist's face. A Broadway musical, of course. And they even premiered their own YouTube channel, Green Day TV.

I assumed the Legion M offer means you buy partial ownership of the film itself and receive residuals over time. A movie like this is only going to make its budget back via streaming, I figure.

When I looked at some of the fine print, though, what it actually means is that you invest in a vehicle that holds a part of the distribution budget. Basically Legion M is selling risky, illiquid securities to foster community with other Green Day fans. But why was I being asked to help cover distribution for this film?

From what I gather, if you gamble $108.50, at minimum, on their distribution budget, you can make $6.50 in profit: a $100 ticket, plus an 8.5% "financing charge," against returns capped at 115%, which Legion M hopes to pay out within twelve months. Nimrods just did $899 a theater. As of Sept. 16, the box office is less than $1.3M.

Legion M stated that they deliver "emotional ROI" to the fans who participate in their crowd-funding rounds. Page 4 of Legion M's 77-page October 5, 2021 Offering Memorandum reads:

While financial success is the primary goal for Legion M, there is more to life than money. In addition to financial return, we strive to give our investors an emotional return for owning shares of our Company.

Crowdfunding for independent movies is normal, but this isn't an indie. The film is co-owned by the studio arm of Live Nation Entertainment, the world's largest live-entertainment company.

Legion M, Inaugural Entertainment, and Live Nation Studios did not respond to requests for comment.

To give you a sense of Green Day's draw, the U.S. leg of their Hella Mega Tour, which they headlined with Weezer and Fall Out Boy in 2021, grossed $67.3M. And Live Nation Entertainment booked $25.2B in revenue last year.

One of Legion M's investment theses is that crowdfunding is part of Hollywood's future. I agree. A lot is changing in the development and creation of movies, and the economics are increasingly difficult. So to get niche content made, sometimes you need to turn to fans to make rent. Make it up in streaming. Blah blah blah. I get it. I am with you.

But not this movie, not this band. Green Day prints money. They can afford their own film distribution. They don't need a handout.

TL;DR: Despite volunteering as an extra, I do not appear in the Green Day movie.