National Lampoon Continues Its Long Slide into Obscurity

National Lampoon Inc. (NLN), continuing its cultural mission to educate and entertain today's youth, is buying AllModelZone.com from Web design shop Alle Von Technologies LLC for an undisclosed sum. AllModelZone, which launched in 2002, is a social network for people in the modeling industry, letting aspiring and professional models, photographers, agency folks and miscellaneous hangers-on connect online. National Lampoon also says it will use its new acquisition to help cast an upcoming film, called "National Lampoon's Legend of Awesomest Maximus, starring Ben Kingsley, Helen Mirren and Dame Judi Dench as Maximus.

National Lampoon, the storied comedy shop that in the 1970s and 1980s produced a magazine, radio show and feature films including Animal House, has stagnated in recent years. Under James Jimirro, a former Walt Disney Co. (DIS) exec who took control of the company in 1990, the company changed its name to J2 Communications Inc. and generated revenues, among other ways, by lending the National Lampoon name to such classics as Van Wilder. J2 was delisted from Nasdaq's small-cap market in 2002.

In 2003, a group of investors led by Indianapolis real estate mogul Daniel Laikin bought J2 for $5 million and changed its name to National Lampoon Inc. and began to produce original content (actor Tim Mathesen, who played Eric 'Otter' Stratton in Animal House, became a co-owner of National Lampoon Magazine in the late '80s and helped run the company for a time as a unit of J2). Laiken brought in people such as Doug Bennett, the former president of Macmillan USA and head of online publishing venture iuniverse.com to run the company and, especially, capitalize on the Internet boom. It hasn't worked.

Since then, National Lampoon has made a number of acquisitions, beginning with a 2003 deal to buy a bankrupt television network called Burly Bear Networks Inc. for $600,000. Its more recent purchases include a 2007 deal for Drunk University and, doubling down on the boozy frat set, CollegeHangover.com ("CollegeHangover has been a strong partner in our Drunk University Network....," Laikin said in statement in announcing the deal in January), along with February purchases of promotional company Comedy Express Inc. and sports site RivalFish.

Despite such efforts, National Lampoon's balance sheet is about as funny as Van Wilder 2: The Rise of Tai. In June it reported third-quarter earnings of $98,000 on revenues of $2.6 million, hardly the sort of numbers that signify success for a company whose films once shook the box office. Earlier this year the American Stock Exchange, where National Lampoon's shares trade, warned the media firm that its stock no longer meets listing requirements (the company is trying to regain compliance).

Was it over when the Germans bombed Pearl Harbor? You bet.

Comments

[Carter:]

Its always funny to me when people write articles and they think that if they put a bunch of history about the company and a few numbers that they sound intelligent...when in reality they have not done much if any due dilligence on the company.
Fact is National Lampoon was mismanaged in the 90's and it took a long time to get the company going back in the right direction.
However, National Lampoon is at an inflection point. The internet business is growing fast and current comscore numbers have monthly unique users over 6M with monthly page views over 100M (that is before acquisitions). These are impressive numbers and if you look at comp valuations (look up break.com and collegehumor.com) where those sites sold stakes putting the companies in the $50M valuation range.
The film business where this author said National Lampoon "once shook the box office" is actually poised to be stronger than ever. Fact is that National Lampoon only saw royalties from those past movies (Animal House, Vacation, and Van Wilder) where today the company is also doing its own in house productions where they have a large % ownership of the titles. They are able to get most of these movies financed from outside investors while at the same time pre-selling the foreign rights and the domestic TV rights for most if not more than the overall budgets of these movies. Basically taking little to no risk while keeping the lucrative DVD upside to themselves.
They are going into production on their 3rd in-house movie...so the results are really only starting to be recognized, but this was a big factor in last quarters operating profit.
The balance sheet definitely needs to improve, but it is misleading. Most of the debt is associated with the movies being produced where the debt is associated with the film and not National Lampoon. NLN also was able to clean up its corporate structure raising over $900k when preferred shareholders converted stock at a 28% premium to the market...
In the last conference call the CEO talked about a likely settlement with Warner Brothers in regards to unpaid royalties on the Vacation movies. At the end of 2006 NLN had a similar settlement with Universal regarding Animal house that was $3.75M. Since there are 3 Vacation movies this settlement will likely be more than the one from Animal House. It is possible they could get a settlement worth more than half of their current market cap! (not that that would be hard at this ridiculous valuation)
In conclusion, my question is...Who hasn't heard of National Lampoon? The brand name has huge brand recognition...if the company continues in the right direction there is really no reason why National Lampoon couldn't be producing their own feature films. There is no reason the next Old School, Superbad, or Pineapple Express couldn't come from National Lampoon...
Keep an eye on this company...

2008 Aug 20 03:49 PM

[User 273681:]

Hold onto your seats: Christopher Meloni has just wrapped his directorial debut with NL's DIRTY MOVIE, which is causing the most buzz for a comedy since ANIMAL HOUSE. Expect HUGE, I said HUGE earnings for the company from this one. It was written and produced by Alan Donnes, who wrote and produced THE NATIONAL LAMPOON RADIO HOUR, which just happened to have been good enough to be the #1 downloaded radio show on Audible.com as well as a hit in syndication and on both XM and SIRIUS. Wisely, NL has inked a deal to keep Donnes producing fo them. Write it down: NATIONAL LAMPOON'S DIRTY MOVIE. You heard it here first!

2008 Oct 02 11:05 AM

[MistyGentil:]

Unreal ! Seems all National Lampoon is good for any more is screwing people and companies over ! Hell I guess what can you expect you have Dan Lakin x ceo of National Lampoon who is facing stock fraud Sec charges criminal ! You have the New CEO Tim Durham who well he just wont pay any of National Lampoons bills ! This is a company and 2 guys in business I would stay fare away from. I belong to a web site that has been massively screwed over by National Lampoon, Dan Lakin and Tim Durham. If any one is interested in yet another case of being screwed by National Lampoon Check it out ! Allmodelzone.com !

Mar 05 09:05 AM