Paige Clothing Company (Paige) helped form Apparel Media LLC, a company that will conduct e-commerce sales for Paige through a dedicated internet site. Two outside investors contributed $50,000 in start-up capital to Apparel Media as the sole owners of the company. Apparel Media’s governing contract stipulates the following:

• Paige is to be Apparel Media’s sole client, and Paige must approve any expenditures by Apparel Media.
• Apparel Media will receive a fee of 5 percent of all sales revenue generated through its e-commerce internet site up to a maximum fee of $30,000 per year. The maximum fee will increase by 4 percent per year.
• Paige and Apparel Media will pay 50 percent of the costs to maintain the internet site. However, if Apparel Media’s fees are insufficient to cover its 50 percent share of the costs, Paige will reimburse Apparel Media for the loss.

Explain whether Apparel Media qualifies as a variable interest entity. Explain whether Paige should consolidate Apparel Media.