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Film finance


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Film finance

  1. 1. Film Financing Different Ways in which films can be financed, and how to link them to your Case Studies
  2. 2. Film Financing <ul><li>The Producer (eg. Studio or Production Company) must secure funding for the Production of the film before filming </li></ul><ul><li>The problem with this is that it is hard to predict how much (if any) money a film will make </li></ul><ul><li>Furthermore, there are various legal and procedural problems in securing rights to a film property – it’s a complicated business! </li></ul>
  3. 3. Government Grants <ul><li>Grants are some provided by Government Schemes designed to encourage Creativity and develop new talent </li></ul><ul><li>A Film Production can benefit a Country in a number of ways: </li></ul><ul><li>Employment Opportunities </li></ul><ul><li>Development of National Culture </li></ul><ul><li>Advertising a Location to an International Audience </li></ul>
  4. 4. Government Grants <ul><li>The UK Film Council offers subsidies to filmmakers in the UK meeting certain criteria </li></ul><ul><li>The National Lottery also offers subsidies and Grants to UK-based filmmakers </li></ul><ul><li>The Escapist (2007), Parallel Films was funded by the UK Film Council, National Lottery and Irish Film Council </li></ul>
  5. 5. Tax Schemes <ul><li>As mentioned before, there are benefits to a Country in having a Major Film Release shot on their shores </li></ul><ul><li>The UK introduced the Producer’s Tax Credit in 2007 to help entice Film Producers to the UK </li></ul><ul><li>The Producer’s Tax Credit offers a direct Cash Subsidy to Producers choosing to shoot in the UK </li></ul><ul><li>This has helped to bring large-scale productions like The Dark Knight (2008) to the UK </li></ul>
  6. 6. Tax Shelters <ul><li>Tax Shelters in the UK allow those who invest in UK Films to pay less Tax, provided the film is shot in Britain and employs a fair proportion of British Actors and Crew </li></ul><ul><li>As a result of this, many American Films choose to shoot at British Studios such as Pinewood and Shepperton </li></ul><ul><li>This also helped to attract large-scale US productions to the UK </li></ul><ul><li>The UK Tax Shelter for Film Investment was discontinued in 2007 </li></ul>
  7. 7. Pre-Sales <ul><li>Pre-Sales involves the Producer selling the right to distribute the film before it is made – this is the most common method of Film Financing </li></ul><ul><li>In order to secure their investment, Distributors (usually Major studios like Universal) will expect certain elements that are likely to guarantee success </li></ul><ul><li>These may include ‘Marquee’ names (Stars) or some kind of change to a film to make it more Commercially Tenable </li></ul><ul><li>If a ‘Star’ leaves the film for any reason, this would often result in the funding for a film being pulled, as with Terry Gilliam’s The Man Who Killed Don Quixote (2002) </li></ul>
  8. 8. Pre-Sales <ul><li>Pre-Sales are usually done by territory ; e.g. Europe, Australia, etc. </li></ul><ul><li>Pre-Sales can also be made of DVD or TV Distribution Rights </li></ul><ul><li>This is especially likely to be the case if the Movie Studio distributing the film is part of the same Conglomerate as a TV Station </li></ul><ul><li>This is an example of Horizontal Integration </li></ul>
  9. 9. Working Title Films <ul><li>Tim Bevan and Eric Fellner (Working Title Co-Chairmen) have said for a long part of their history ‘90% of the time [was] spent trying to secure financing’ </li></ul><ul><li>Working Title Films funds their films primarily through Pre-Sales , which is made much easier as they are part of the same Conglomerate as their distributor, Universal Pictures </li></ul>
  10. 10. Working Title Films <ul><li>Working Title Films are also able to secure Pre-Sales because their films contain many ‘Commercially Sound’ elements: </li></ul><ul><li>Popular, Mainstream Genres (Rom-Com) </li></ul><ul><li>Big-Name Stars (Hugh Grant, Julia Roberts) </li></ul><ul><li>Brand-Name Recognition </li></ul><ul><li>They are also increasingly known as ‘Prestige’ Filmmakers, with films such as Atonement (2007) </li></ul>
  11. 11. Warp Films <ul><li>A small, independent Company such as Warp Films cannot offer secure returns on any large investments, as they do not make films featuring ‘Marquee’ names </li></ul><ul><li>As a result, they are likely to secure funding from sources like the UK Film Council or the National Lottery </li></ul>
  12. 12. Warp Films <ul><li>This lack of funding may mean that such companies can only make films in ‘low-budget Genres’ such as Social Realism, as they cannot afford the effects and costs of Genres such as Sci-Fi </li></ul><ul><li>However, this is not necessarily a limitation – low-budget films of this kind are often seen as more ‘artistically pure’ and are perhaps more likely to receive Critical Acclaim </li></ul>