Set a Minimum Sale Price After Audience Loss and Reinvestment
Company: Capital One
Role: Data Analyst
Category: Analytics & Experimentation
Difficulty: medium
Interview Round: Technical Screen
# Set a Minimum Sale Price After Audience Loss and Reinvestment
A streaming business is considering selling The Analyst and using the opportunity to pursue Shark Bank. Before deciding, explain what information is needed to value the sale: the value of keeping the existing show, the audience that would be lost, and the contribution of the alternative investment.
You then receive a revised scenario for the relevant two-year comparison. Keeping The Analyst contributes zero. Selling it causes the business to lose 1.5 million viewers, with an economic value of \$32 per lost viewer. The alternative show contributes \$22 million in total over the comparison period. Treat these quantities as comparable economic values and assume the \$22 million does not already subtract the lost-viewer value. Ignore taxes, transaction costs and discounting for the calculation.
Find the minimum sale price that leaves the business no worse off than keeping the show. A buyer offers \$60 million: would you recommend selling under these assumptions? Explain how you would verify that the lost-viewer value and alternative-show contribution are not counted twice. The zero-value retention baseline is the revised scenario; do not substitute a profit estimate from a different scenario.
### What a Strong Answer Covers
- A consistent keep-versus-sell comparison with audience loss and reinvestment value.
- The break-even sale price and incremental value at the offered price.
- Conditions under which the simplified recommendation could change, including rights, costs and uncertainty.
### Follow-up Questions
- How would a nonzero value from keeping the show change the price floor?
- What would change if the alternative-show profit already included the audience loss?
Overview: Calculate a show’s minimum sale price using lost audience value and reinvestment profit, then assess a 60-million-dollar offer.
Community answers
Answer by Nest
I'd compare the value of keeping The Analyst against selling it and reinvesting in Shark Bank, accounting for lost viewers and the alternative show's contribution.
Under the revised assumptions, lost audience value is 1.5M × $32 = $48M. Shark Bank contributes $22M, so the minimum sale price is $26M ($48M − $22M).
At a $60M offer, selling creates $34M in incremental value, so I'd recommend proceeding.
I'd verify that the $22M contribution excludes lost-viewer costs to avoid double-counting. If keeping The Analyst had positive value, I'd add that to the minimum sale price. If Shark Bank's contribution already included the audience loss, I wouldn't subtract the $48M again.
Finally, I'd validate the assumptions around viewer retention, content rights, transaction costs, and Shark Bank's expected performance before making the final decision.
