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Industry Report: Financing

FICA: The Portuguese Audiovisual Funds


- 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.

FICA: The Portuguese Audiovisual Funds

Working in animation since 1987, Luis da Matta Almeida, is CEO, Producer and Director of Zeppelin Filmes Lda., an animation company based in Portugal.
He has produced many films and series, which won 72 international awards, including the Cartoon D’Or 2000, and he has sold them in most countries of the world. He is a Cartoon Board Member, Vice-President of the Portuguese Animation Producers’ Association and President of Portuguese Animation House.

When was the Fundo de Investimento para o Cinema e Audiovisual (FICA) created?

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FICA is a capital investment Fund constituted as a special Fund for cinematographic and audiovisual investment. FICA invests, requiring return on that investment. The Fund assumes the nature of a private collective investment scheme established contractually between its participants.
The Fund initiated its activity on 23 July 2007, which was when the first Assembly of Participants took place and designated ESAF – Espírito Santo Fundos de Investimento Imobiliário, as the Fund’s Management Entity and BES – Banco Espírito Santo, as its depository.

Which are the objectives of FICA?
The Fund aims to invest in cinematographic, audiovisual, and multiplatform works with the purpose of promoting and developing cinematographic and audiovisual arts in Portugal.
The Fund advocates interventions geared towards strengthening the sustainability of cinematographic and audiovisual activities, strengthening the creative and competitive capacity of small and mid-size companies. The Fund maximises the return on investment for the Fund’s Participants through profit sharing in the projects in which it invests and through valuation of the capital participations in the Companies in which it invests.

Is it possible to submit applications with foreign co-productions? Are these co-productions subject to any percentage?
Yes. There is no pre-defined percentage for co-productions. The Assembly of Participants deliberates on a case by case basis, keeping in mind the weight of the national elements involved in the project.

Which is the duration of the Fund?
The Fund has a duration of seven years, counted as of the beginning of its activity. The first five years correspond to an investment phase and the remaining two years to a disinvestment phase.

Who are FICA’s shareholders?
Currently, there are five participants: IAPMEI – Instituto de Apoio às Pequenas e Médias Empresas e ao Investimento, represented at the Assemblies of Participants by ICA - Instituto do Cinema e Audiovisual (Institute for Cinema and Audiovisuals), which holds 40% of the Fund’s capital; ZON Multimédia, Serviços de Telecomunicações e Multimédia, S GPS, S.A. , with a 30% participation in the Fund’s capital; S IC – Sociedade Independente de Comunicação, S.A. which holds 12% of the Fund’s capital; T VI – Televisão Independente, S.A. , with a 12% participation in the Fund’s capital; RTP – Radiotelevisão Portuguesa, which holds 6% of the Fund’s capital.

How much is the Fund’s capital?
Currently, the Fund has a capital of €83 million.

How does the Fund operate practically?
The Fund’s investments may be direct (between 60% to 80% of the Fund’s budget) or indirect (between 40% and 60% of the Fund’s budget).
There are direct investments to cinematographic and audiovisual productions and indirect investments, materialized through the Fund’s participation in audiovisual companies, sharing risks and offering benefits beyond funding. The Fund’s indirect investments, are based on multi-annual production plans to develop corporate strategies.

Which works are eligible for the Fund?
The Fund’s policy is based on diversification. The works can be feature films; television documentaries; fiction or animation television series or documentary series; TV films. The breakdown of the Fund’s investments by the different types of productions and activities should observe the following proportions:
a) Television or multiplatform works 45% to 50%, to be distributed as follows:
i) A nimation — 10% to 15%;
ii) Documentaries — 10% to 15%;
iii) Fiction S eries — 60% to 70%;
iv) T V films — 10% to 15%;

b) Cinematographic works 50% to 55%, to be distributed as follows:
i) Fiction — 80% to 90%;
ii) A nimation — 10% to 20%.

Which are the requisites the candidates must have to benefit from the FICA Fund?
First of all the beneficiary companies must be registered in the Register of Cinematographic and Audiovisual Companies, kept by ICA and be independent production companies. The companies must be small or mid-size companies and must have complied with their respective obligations towards the Fund or ICA, and be in good standing with the tax authorities or social security.
There are some limitations. First of all companies or group of companies, cannot receive more than one third of the annual indirect investments. Secondly, the projects, in any category, cannot benefit from more than 10% of the Fund’s annual budget. No company or group of companies that are in a relationship may benefit from amounts of more than 20% of the Fund’s investment during a particular year or above 15% of those investments in two consecutive years.
There is no pre-defined type of project that is preferred. The analysis is carried out project by project. The evaluation is made following a technical- artistic perspective, as well as from an appropriate financial investment plan.

How does the Fund recoup the investment?
The funding granted by the Fund is recovered through its participation in the operating income of the works, proportional to its investment, as well as through the valuation of other assets linked to indirect investments.

Which are the deadlines to submit applications? It is possible to submit applications during the first five years of the Fund’s duration. The applications must be presented at the ordinary Assemblies of Participants, at least thirty days prior to the date of the assemblies that take place generally every two months.

Cartoon Master Munich, Germany, June 2008

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