Industry Report: Financing
Options and strategies from a financial perspective for the audiovisual professionals
"Innocente", the first collaboratively funded film to be recognised at the Oscars, proves that crowdfunding has now found its place in the film industry. A financing method that has already tapped into the French market.
The British Film Commission (BFC) welcomed the publication of the UK production statistics for 2012 which show continued healthy levels of production complementing the investment being made in the production sector.
With 279 films, the production of registered films reached its highest ever level, with an increase of seven films compared to 2011. This growth has come about thanks to international coproductions (+9 films), with French-only films decreasing from 152 in 2011 to 150 in 2012.
It allows Belgian registered companies investing in the production of European audiovisual works to benefit from a deduction of their taxable income worth 150% of the amount invested, up to 50% of their tax liabilities or 750k euro per year
Unlike other European countries, France has two different producer’s tax relief schemes (Credit d’Impôt and Credit d’Impôt International), which means that the money for national and foreign productions comes from different pots, securing a constant financing source for the domestic cinema production
Fiction struck back and US scripted formats took Europe by storm, becoming international hits within a few months. Today, local fiction strikes back, and co-productions increasingly appear to be the best way to offer high-quality series destined to be broadcast in as many countries as possible.
Following notification of the financing guidelines by the Commission of the European Union, Austria’s Federal Minister of Economics, Reinhold Mitterlehner, gave the green light to the new incentive model 'Film Location Austria' (FISA – Filmstandort Austria).
The dossier presents in detail the film incentives and opportunities offered in Malta. It explains who can apply, which kinds of productions or producers are eligible for support and which are the qualifying expenditures. Potential beneficiaries and maximum aid allowed are described as well.
Back in the mid-1990s, the Czech Republic sealed a reputation as a film-friendly venue , but its luster faded when other European countries introduced rebate schemes, while the Czechs didn't.With a new rebate program in effect since June, local crews and service providers are hoping foreign filmmakers will be back.
Around 20 years ago the regional government fixed the aim of bringing NRW to the forefront of the European cinema industry. In this time the Filmstiftung North Rhine-Westphalia has supported more than 1400 films with a budget totalling over Euro 480m
Paco Rodriguez explained the process of making a business plan and the elements it should contain to attract investors. Only films with a budget of over 10M€ are able to travel internationally, but are very difficult to amortise.
Juliane Schulze presented the study financed by the Media Programme on the role of the banks in film financing. The difficulty for private investors to invest in the audiovisual industry is that film production is primarily project and fee-based businesses rather than company-based businesses, the kind of investment private funds prefer.
Even if public funds are declining in Europe, they remain the most important source of funding for producers. Michaela Haberlander from the FFF in Bayern presented the German public regional funding system.
Juliane Schulze explains how production finance is affecting the way producers fund their film. On one side the State subsidies are more and more limited. On the other side, the distribution paradigm is also changing. Berlin-based company peacefulfish, in partnership with Cineuropa.org, developed an investment network called Mediadeals.
A great help to international co-productions is offered by collection accounts management companies.The CAM is the impartial receipt, administration and disbursement of an audiovisual production's worldwide revenues by a neutral and trusted third party.This strategy allows the producers to concentrate on their core activities by outsourcing administrative burden.
The public film funding structure of a country is linked to the structure and organization of the State. It is especially true in the case of Germany, where the task of supporting the cinema industry is equally shared by the national and the regional Governments.
Information about the different funding schemes offered by ICAA for short films, feature films, script development, distribution of European works, for the attendance to international festivals, the launching of film festivals in Spain and the preservation of original negatives.
The study highlights the preferential tax treatment given to film production companies by state governments. According to the report movie production incentives (MPIs) – such as film tax credits, cash rebates, grants and select tax exemptions – fail to spur economic growth or raise tax revenue.
The aim of this study is to provide a current overview of the film banking landscape in Europe with a specific emphasis on making recommendations to the MEDIA Programme for actions that they can take to increase the access to bank loans for production companies.
If it was hard for the European cinema to be able to completely finance the movie budgets in the past, what will happen in these times of global financial insecurity? This article tries to answer this question by explaining the historical and current role of bridging and gap financing.
The news rules for development were disscussed during the movie seminar. Tax Shelter and Tax Credit are the new Italian measures presented on 28 October 2008 in Rome at the Teatro Studio dell’Auditorium Parco della Musica. With the help of the Ministry of Culture, this event was the first of three meetings of the General State of Italian Cinema, held during the International Film Festival in Rome.
Luis de Matta Almeida, Director of Zeppelin Filmes Lda., gives us a brief overview on the activity of FICA, the Portuguese Audiovisual Fund. He explains when it was created, what are the objectives and which works are eligible for the Fund.
Interview with Manuel Cristobal, producer of several short films. He gives an overview on the Spanish audiovisual funds, focusing especially on the main changes that occured in the Spanish audiovisual landscape over the last few years. Hi also talks about the role of TVE, the national television.
Leon Perahia, the General Manager of Dupuis Audiovisuel, explains how the company manages to finance its projects by obtaining assistance in several territories. He also gives an overview on the possible sources of aid available in France, Belgium and Luxembourg.
Serge de Poucques, Producer at Nexus Factory presented the Belgian tax shelter. The Belgian tax shelter has been conceived to encourage taxable companies to invest in audiovisual production. Companies can deduct until 150% of the investment. The investment can take the form of loan (maximum 40%) or equity (maximum 60%). The obligation for the producer is to spend a minimum 150% of the equity share in Belgium (within 18 months from the signature of the agreement).
Caroline Cor, Project Manager at the CNC, presented the evolutions of animation film financing in France. She demonstrated that the feature films’ financing structure had been changing during the last 5 years: more co-productions, more self investment from producers, less involvement of broadcasters. The French Government therefore decided to launch the tax credit to help French producers to find alternative ways of financing.
Christine Berg, Project Director at the FFA presented the German tax incentive system. The German tax incentive has an annual funding sum of €60 million for three years for German feature films. The fund is conceived as an automatic funding taking the form of a grant. Until now 99 projects have been supported (14 documentaries, 80 feature films and 5 animation films).
Thierry Baujard, CEO of peacefulfish, explained how production finance is affecting the way producers finance their films. On one side the State subsidies are more and more limited. On the other side, the distribution paradigm is also changing. There is a strong competition between theatre releases and Internet and VOD services, less MG in distribution and sales, decrease of TV advertising efficiency and a lack of sustainable business models in non linear distribution.
The article presents an interview with Petter Lindblad, producer and line producer of Copenhagen Bombay Productions, working manly on low-budget animation feature films. He talks about the advantages of working with low budgets and the way the company is organised. Dividing the budget and dealing with the financing are explained as well.
The report shows the situation of micro budget films (£50k - £250k) in the UK over the past five years. It is possible to see how this sector has found its niche in the UK, although the arena is still dominated by big Hollywood studio releases. The micro budget movies are beginning to usurp the position of the ‘calling card’, long held by the traditional short film format.
The article presents an interview with Katriel Schory, Director of the Israeli Film Fund. The interview consists of two parts. The first one is about new Israeli films as Waltz with Bashir and The Band’s Visit. The second part focuses on the Euro-Mediterranean Audiovisual programme.
The article presents an interview with Renaud Chan, Marketing, Animation Movie & Generic Movie Director at Studio 37, a new co-production company created by Orange. He explains the reasons that led to the creation of Studio 37 and its involvement in animation. He also talks about Les Lascars, the full-length film co-produced by his company.
Interview with Roch Lener, President of Millimages, one of the leading European animation companies. He explains what have been Millimages’ projects in the new media. He also states how no one so far has found a stable economic model for the exploitation of programmes on the new platforms.
Camille Deleaus is account manager for Fortis Mediacom Finance. She gives advice on European film financing, co-productions and tax incentives. In this article she presentes tax Shelters and tax Credit Schemes in France, Luxembourg, Ireland, Belgium, Hungary, Germany and the United Kingdom.
The article presents an interview with Christian Davin, founder of the production company Alphanim and President of the French Syndicate of Animation Producers (SPFA). He explains what is the role of SPFA in the aid system in France and how it works.
The article presents an interview with Jean-Baptiste Babin, Head of Co-productions for Backup Films, a Paris-based Film Financing agency. He explains what is a good financing strategy and shows a standard financing structure for a film. He also gives the definition of the pure equity money.
The German Federal Film Fund was introduced in 2005 and since then the €180 million program had a remarkable effect on the German film industry. It helped revitalize cultural confidence in a country that lost much of its talent and infrastructure during the Nazi era. Bernd Neumann, Minister for Culture, hopes to extend the program beyond its initial three-year run.
This dossier explains the importance of state aid for films as well as its legal basis. In 2001 the European Commission published conditions for the application of Article 87(3)(d), which are described in the article. It also shows the UK film tax incentive and the German Film Fund as different solutions. Finally, an extended outlook is presented and question of territorial conditions are raised.
The tax shelters system for audiovisual investments in Ireland in 2006. It shows that production companies may raise funds depending on a film budget and explains why most of the funds come from individual investors. Conditions of eligibility are described as well.
The “Davos” of cinema, gathered European professionals, experts and guest speakers in five panels of the “World Forum on Strategy and Finance for Cinema”, to exchange analyses, questions and expertise. Main issues were, among others, the digital revolution and shifting economic models, financial and technological changes and solutions for the future of cinema.
The tax shelters set up in Luxembourg and the role of the audiovisual investment certificates (CIAV), which were introduced in 1988. The amount of the certificates is in fact fixed in accordance with the eligibility criteria and within the limit of the stated production costs and expenses incurred in Luxembourg. As a result, the promotion of the audiovisual sector has allowed for a significant number of large projects to be filmed in this small country.
Belgium, this small patchwork of a country, has been present on the international cinema scene for a few years now. Is this only the result of good circumstances? By no means. For thirty years, public authorities have been very committed to initiating incentive policies, and this humble work on the infrastructures has eventually had positive ramifications.