Related Party Transactions

9 Months Ended

Sep. 30, 2021

Related Party Transactions

Related Party Transactions

Note 4. Related Party Transactions

The Company has various agreements with MVS, a Mexican media and television conglomerate, which has directors and stockholders in common with the Company as follows:

● MVS provides Cinelatino with satellite and support services including origination, uplinking and satellite delivery of two feeds of Cinelatino’s channel (for U.S. and Latin America), master control and monitoring, dubbing, subtitling and closed captioning, and other support services. Expenses incurred under this agreement are included in cost of revenues in the accompanying Condensed Consolidated Statements of Operations. Total expenses incurred were $0.7 million and $0.6 million for the three months ended September 30, 2021 and 2020, respectively. Total expenses incurred were $2.0 million and $1.9 million for the nine months ended September 30, 2021 and 2020, respectively. Amounts due to MVS pursuant to the agreement amounted to $0.5 million and $0.6 million at September 30, 2021 and December 31, 2020, respectively.

● Dish Mexico (d/b/a Comercializadora de Frecuencias Satelitales, S. de R.L. de C.V.), an MVS affiliate that operates a subscription satellite television service throughout Mexico and distributes Cinelatino as part of its service. Total revenue recognized was $0.2 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively. Total revenue recognized was $0.7 million and $0.8 million for the nine months ended September 30, 2021 and 2020, respectively. Amounts due from Dish Mexico amounted to $0.1 million and $0.3 million at September 30, 2021 and December 31, 2020, respectively.

● MVS has the non-exclusive right to duplicate, distribute and exhibit Cinelatino’s service via cable, satellite or by any other means in Mexico. Cinelatino receives revenues net of MVS’s distribution fee, which is equal to 13.5% of all license fees collected from third party distributors managed but not owned by MVS. Total revenues recognized were $0.2 million for each of the three months ended September 30, 2021 and 2020. Total revenues recognized were $0.6 million and $0.7 million for the nine months ended September 30, 2021 and 2020, respectively. Amounts due from MVS pursuant to this agreement amounted to $0.2 million and $0.4 million at September 30, 2021 and December 31, 2020, respectively.

Pantaya has an agreement with Univision Communications, Inc. (“UCI”), which has directors in common with the Company (who may hold a material financial interest in UCI), for the purchase of advertising on UCI’s television and radio properties. Expenses under this agreement are included in selling, general and administrative expenses in the accompanying Condensed Consolidated Statement of Operations. Total expenses incurred were $0.3 million and $0.8 million for the three and nine months ended September 30, 2021. Amounts due to UCI pursuant to this agreement totaled $0.2 million at September 30, 2021. At September 30, 2021, the Company has a remaining commitment of $5.0 million, which is included in Note 14, “Commitments” of Notes to Condensed Consolidated Financial Statements.

The Company entered into an amended and restated consulting agreement with James M. McNamara, a member of the Company’s board of directors, on August 13, 2019, to provide the development, production and maintenance of programming, affiliate relations, identification and negotiation of carriage opportunities, and the development, identification and negotiation of new business initiatives including sponsorship, new channels, direct-to-consumer programs and other interactive initiatives. Total expenses incurred under this agreement are included in selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations and amounted to $0.1 million for each of the three months ended September 30, 2021 and 2020, and $0.3 million for each of the nine months ended September 30, 2021 and 2020. No amounts were due to this related party at September 30, 2021 and December 31, 2020.