Note 7. Equity Method Investments

The Company makes investments that support its underlying business strategy and enable it to enter new markets. The carrying values of the Company’s equity method investments are typically consistent with its ownership in the underlying net assets of the investees, with the exception of Canal 1 and Pantaya, as described in detail below. Certain of the Company’s equity investments are variable interest entities, for which the Company is not the primary beneficiary.

On November 3, 2016, we acquired a 25% interest in Pantaya, a newly formed joint venture with Lionsgate, to launch a Spanish-language OTT movie service. The service launched on August 1, 2017. The investment is deemed a variable interest entity (“VIE”) that is accounted for under the equity method. As of December 31, 2019, we have funded $8.5 million in capital contributions to Pantaya. We record the income or loss on investment on a one quarter lag. As of March 31, 2019, our applicable pro rata share of the inception-to-date losses exceeded our contractual funding commitment of $10 million. As such, our cumulative share of the losses is limited to $10 million and no additional losses were recorded following the three months ended March 31, 2019. For the years ended December 31, 2019 and 2018, we recorded $0.3 million and $6.9 million, respectively in loss on equity method investments in the accompanying consolidated statements of operations. In accordance with U.S. GAAP, since we are committed to provide future capital contributions to Pantaya, we also present as a liability in the accompanying consolidated balance sheets the net balance recorded for our share of Pantaya’s losses in excess of the amount funded into Pantaya, which was $1.5 million and $5.0 million at December 31, 2019 and 2018, respectively. At December 31, 2019 and 2018, we had a receivable balance of $3.9 million and $2.0 million, respectively, and is included in accounts receivable and other assets in the accompanying consolidated balance sheets.

On November 30, 2016, we, in partnership with Colombian content producers, Radio Television Interamericana S.A., Compania de Medios de Informacion S.A.S. and NTC Nacional de Television y Comunicaciones S.A., were awarded a ten (10) year renewable television broadcast concession license for Canal 1 in Colombia. The partnership began operating Canal 1 on May 1, 2017. On February 7, 2018, Colombian regulatory authorities approved an increase in our ownership in the joint venture from 20% to 40%. In July 2019, the Colombian government enacted legislation resulting in the extension of the concession license for Canal 1 for an additional ten years for no additional consideration. The concession is now due to expire on April 30, 2037 and is renewable for an additional 20-year period. The joint venture is deemed a VIE that is accounted for under the equity method. As of December 31, 2019, we have funded $111.7 million in capital contributions to Canal 1. The Canal 1 joint venture losses-to-date have exceeded the capital contributions of the common equity partners and in accordance with equity method accounting, losses in excess of the common equity have been recorded against the next layer of the capital structure, in this case, preferred equity. The Company is currently the sole preferred equity holder in Canal 1 and therefore, the Company has recorded nearly 100% of the losses of the joint venture. We record the income or loss on investment on a one quarter lag. For years ended December 31, 2019 and 2018, we recorded $30.2 million and $28.3 million in loss on equity method investment, net of a preferred return on capital funded, in the accompanying consolidated statements of operations, respectively. The net balance recorded in equity method investments related to the Canal 1 joint venture was $44.2 million and $46.7 million at December 31, 2019 and 2018, respectively, and is included in equity method investments in the accompanying consolidated balance sheets. At December 31, 2019 and 2018, we had a receivable balance of $2.0 million and $1.4 million, respectively, and is included in other assets in the accompanying consolidated balance sheets.

On April 28, 2017, we acquired a 25.5% interest in REMEZCLA, a digital media company targeting English speaking and bilingual U.S. Hispanic millennials through innovative content, for $5.0 million. We record the income or loss on investment on a one quarter lag. For the year ended December 31, 2019, we recorded $0.5 million in gain on equity method investment inclusive of preferred return on capital funded, in the accompanying consolidated statement of operations. For the year ended December 31, 2018, we recorded $0.1 million in loss on equity method investment, inclusive of preferred return on capital funded, in the accompanying consolidated statement of operations. The net balance recorded in equity method investments was $5.5 million and $5.0 million at December 31, 2019 and 2018, respectively, and is included in the accompanying consolidated balance sheets. We have no additional commitment to fund the operations of the venture.

On November 26, 2018, Snap Media acquired a 50% interest in Snap JV, LLC (“Snap JV”) (we own 75% of Snap Media), a newly formed joint venture with Mar Vista Entertainment, LLC (“MarVista”), to co-produce original movies and series. The investment is deemed a VIE that is accounted for under the equity method. As of December 31, 2019, we have funded $0.3 million into Snap JV. We record the income or loss on investment on a one quarter lag. For the years ended December 31, 2019 and 2018, we have recorded $0.3 million and $0 million, respectively, in loss on equity method investments in the accompanying consolidated statements of operations. The net balance recorded in equity method investments related to Snap JV was $0.0 million and $0 million at December 31, 2019 and 2018, respectively, and is included in equity method investments in the accompanying consolidated balance sheets.

The Company records the income or loss on investment on a one quarter lag. Summary unaudited financial data for our equity investments as of and for the twelve months ended September 30, 2019 are included below (amounts in thousands):


	Equity
	Investees
Current assets	$	34,719
Non-current assets		29,507
Current liabilities		74,917
Non-current liabilities		41,296
Redeemable stock and non-controlling interests		(392)
Net revenue		37,380
Operating loss		(37,623)
Net loss	$	(58,057)