email print share on Facebook share on Twitter share on LinkedIn share on reddit pin on Pinterest

CANNES 2017 Industry

Exploring the various strategies employed in the European financing environment

by 

- CANNES 2017: The participants in a round-table discussion co-organised by the CNC met on 22 May to discuss the financial instruments used to support independent production and distribution companies

Exploring the various strategies employed in the European financing environment
Philippe Reynaert (left) and Pierre-Emmanuel Lecerf during the discussion (© CNC)

The lively discussion co-organised by the CNC during the Cannes Film Festival on 22 May, which included remarks by Giuseppe Abbamonte (director MEDIA and Data, DG Connect, European Commission) and Bogdan Wenta (Member of the European Parliament), who briefly explained EU policy for the cultural and creative sectors, provided a helpful overview of the various strategies employed in the European financing environment. Predictably, this environment is experiencing increasing difficulties in raising funds, as current changes (such as the growing influence of digital platforms) are slowly shaking up the traditional business models.

(The article continues below - Commercial information)

Still, as Pierre-Emmanuel Lecerf (director of Financial and Legal, CNC), who also moderated the event, helpfully outlined, the variety of financial instruments can still be divided into three categories: traditional banking instruments, private investments, and public initiatives. The first one was explained by Roger Havenith (deputy chief executive officer, European Investment Fund) and Florence Aviles (deputy director Loans for Image Production, IFCIC), who described the role of IFCIC, a specialised lending institution tasked by both the Ministry of Culture and Communication and the Ministry of Finance with contributing to the development of the culture industry in France by making it easier for companies in the sector to obtain bank financing.

“When a bank lends money to the producer or the distributor, it has the ability to come to IFCIC and benefit from 50%-70% risk sharing,” she added. “This way, they don’t lose everything and can take more risks.” Moreover, she stressed the importance of enhancing awareness of the particular characteristics of the film industry. “If you go to a bank on the corner of the street, they will not understand your business – it doesn’t work. It’s a problem because film financing is very specific. So there is a need for specialised banks that understand the film business. Otherwise, they will just be too scared.” 

As most independent producers don’t work on previously established franchises, and are therefore unable to capitalise on a trend and predict revenues, the help they are looking for often goes beyond mere financial input. They also prove… surprisingly forgiving. “Just because a filmmaker makes really very small films, it doesn’t mean he won’t make a great one. Or if his film is a success, it doesn’t mean the next one will be successful as well – it will just get too expensive,” explained Alexis Dantec (director general of COFINOVA). “In finance, people sometimes prefer to look into the past in order to see the future,” he added. “For me, it’s completely insane.”

Meanwhile, Philippe Reynaert (director of Wallimage and managing director of Wallimage Entreprises Belgium) gave a colourful explanation of the “Walloon Double Dip” concept. “It means that the same amount of money spent in the southern part of Belgium is eligible for both the Tax Shelter and Wallimage alike,” he said while talking to Cineuropa after the discussion. “Look at it this way: Wallimage on average covers 25% of your expenses, while the Tax Shelter can take care of up to 41% when you meet all of the conditions. So the best-case scenario is that 66% of your audiovisual expenses can be cut out of your financing plan! We call it the ‘Walloon Double Dip’ because it’s like getting one portion of Walloon fries and then dipping them both in mayonnaise and ketchup,” he added playfully.

From development loans to guarantee facilities, and even non-financial forms of support, independent producers and distributors can find different solutions that are best suited for their projects. However, there is still a lot to be done. “Why does a producer drive a Ferrari instead of taking the underground? He would have to pay cash,” joked Reynaert, touching on one of the biggest problems that independent producers have to face – especially at the development stage. “We need cash, but not to drive Ferraris,” added Thomas Saignes (head of International Business Affairs, The IRIS Group). “We need cash to stay agile. We need it to get leverage: to protect our rights, our creative package and the interest of the producer. And we need it in order to last long. Growth in the film sector can be steady, but it's slow and takes time." While new problems seemingly arise every day, at least some of them can be addressed with a smile. 

(The article continues below - Commercial information)

Did you enjoy reading this article? Please subscribe to our newsletter to receive more stories like this directly in your inbox.

Privacy Policy