Film + TV Private Finance Insights 2022 [Report]

FILM + TV PRIVATE FINANCE INSIGHTS
“Media Finance In a Changing Economy”
2022
Jon Gosier, CEO, FilmHedge
Phone: (770) 268-3006
Email: jon@filmhedge.com

The Film and TV industry continues to thrive post-pandemic.
At FilmHedge, we receive applications from filmmakers all over the world. In
2021 403 feature films were released in the United States . In the same year, 366
1
productions were produced in the State of of Georgia which is now the #1
production destination in the World for Film and TV.
1
https://www.statista.com/statistics/187122/movie-releases-in-north-america-since-2001/#:~:text=In%202
021%2C%20a%20total%20of,before%20the%20COVID%2D19%20outbreak.
FilmHedge Film + TV Private Finance Insights 2022 | “Media Finance in A Changing Economy” | 2

To put our data in perspective, in 2021 FilmHedge received applications from
around 100 productions, 40 of which were features with total budgets above
$1M and below $50M, our area of focus. Films of this size are important because
they are the fastest growing size of productions that are ‘independently
financed’.
The other reason this number is important: it means FilmHedge has exposure to
data from around 10% of feature films released in the U.S. and 3% of Georgia
productions, a number skewed by the fact that much of the production activity
in Georgia is for TV series (where each episode is counted as an individual
production).
We didn’t allocate funding to all of these productions, our review of such deals
gives us a great amount of insight about the state of film finance. This data is

how FilmHedge’s capital partners make better lending decisions to Film and TV
producers.
This report shares insights about how the industry is evolving from a financial
data perspective. To respect the privacy of the individual filmmakers and
producers, we have abstracted the names of each production analyzed.

Table of Contents
Summary 6
About the Data 6
MEDIA FINANCE DATA SET 9
Media Finance Study: 2022 Sample Data Set 9
I. THE OUTLOOK FOR PRODUCERS 10
FILM/TV PRODUCTION ANALYSIS 11
Mid-Range Boom 12
Film and TV Deals Reviewed for Study 13
Productions: ATL vs BTL Costs 13
Contingency Budgets 14
Debt Financing On The Rise 15
SPOTLIGHT ON GEORGIA 16
Georgia Rises as a Production Destination 17
Georgia Lensed Production Data (2018-2022) 19
Georgia Film Recovers From Covid 19
II. THE OUTLOOK FOR INVESTORS AND LENDERS 20
LENDER/INVESTOR ANALYSIS 21
Rising Bank Rates Uncorrelated with Media Lending 22
Film/TV Private Lending Is Growing 25
Media Lending Rates Decline 26
Media Finance Interest Rates 26
Lender Earnings from TV/Film Transactions 27
Comparing TV/Film Lending ROI with Real Estate Investment ROI 28
CONCLUSIONS 31
Additional Citations 32

Summary
This report analyzes industry-wide financial trends as it relates to private media
finance and lending to Film and TV Producers and by their Investors and
Lenders.
These industry insights observe market changes that will affect how and when
Film and TV Producers can access capital and what the Investors who finance
them, and those who Lend to them, can expect.
About the Data
The data in this report is not comprehensive of the Film/TV Industry and is
limited to publicly available datasets and a representative sample of data from
productions submitted to FilmHedge or its affiliates.
The nature of Film/TV is such that projects produced in one year are often not
released until the following year (or even many years later). So when looking at
this sample of projects financed or partially financed in 2022, some have already
been released while others may not be released until 2023 or subsequent years.
FilmHedge reviews productions that are often not yet public, therefore much of
the data in this report can’t be found on public resources like IMDB.com.

At FilmHedge we offer a fin-tech platform with features for investors and lenders
who want access to better data to guide their media lending.
We also offer tools for producers to apply for and receive funding.

Because we work with both lenders and borrowers across the US Film/TV
industry (and increasingly the global industry), we have unprecedented access to
financial data on both sides of these transactions.
Additionally, the data we collect is not limited to data that comes from any
single financial group whereas most groups only track their internal dealflow, we
track deals that are financed by third-parties as well.

MEDIA FINANCE DATA SET
Using data collected from completed transactions tracked by Filmhedge, we
compiled the following data set. It’s the data set used for some of the findings,
qualified productions that closed, financed by the partners we work with.
Media Finance Study: 2022 Sample Data Set2
Type ATL BTL Post TXC Total Budget
"Crimson" Feature $ 1,116,385 $ 5,117,210 $ 1,316,716 $ - $ 7,780,000
"Stain" Series $ 6,317,285 $ 17,982,714 $ 2,412,989 $ 8,100,000 $ 27,000,000
"Jane" Feature $ 4,648,314 $ 9,118,977 $ 1,039,285 $ 4,856,637 $ 16,582,490
"Slay" Feature $ 4,442,288 $ 5,157,711 $ 281,771 $ 2,499,614 $ 9,600,000
"Dirt" Feature $ 2,469,729 $ 2,688,489 $ 182,481 $ 935,000 $ 5,358,219
"Buddies" Feature $ 560,807 $ 898,835 $ 144,452 $ 425,000 $ 1,596,057
"Lady" Feature $ 302,976 $ 1,394,342 $ 172,515 $ 200,000 $ 1,608,784
"Army" Feature $ 15,839,142 $ 10,519,858 $ 1,672,728 $ - $ 28,259,000
"Dog" Feature $ 2,649,396 $ 2,180,106 $ 306,547 $ 1,468,170 $ 5,581,050
"Lib" Feature $ 4,512,405 $ 6,887,908 $ 1,820,000 $ 4,458,975 $ 14,863,250
2
Data set provided by FilmHedge and affiliates

I. THE OUTLOOK FOR PRODUCERS

FILM/TV PRODUCTION ANALYSIS

In this section we share our industry wide research and observations for Film/TV
Producers.
Mid-Range Boom
Movies that are made for under $50M are increasingly becoming the industry
norm. The movie EVERYTHING, EVERYWHERE, ALL AT ONCE had a reported
budget of $25M. It went on to earn over $100M world wide .
3
Increasingly filmmakers are proving that they can do more with less as the costs
of production and production equipment go down.
At our company, we’ve seen an uptick in applicants of films in production in this
mid-range. From 40 applicants in 2021 (about 2 a week) to 260 applicants in
2022 (about 5 a week). These are overall applicants and include productions that
are often still in development (screenplay-only stage).
‘Qualified’ applicants, producers submitting films or series where pre-production
has begun, principal photography has started, or where more than 50% of the
3
https://www.the-numbers.com/movie/Everything-Everywhere-All-At-Once-(2022)#tab=summary

budget has been committed, accounted for about 20% of all applicants. Our
analysis in this report was of only the qualified deal flow. We also limited the
dataset to only include films that had secured distribution, giving them a more
definitive release schedule.
Film and TV Deals Reviewed for Study
2021 2022
Overall Applicants 40 260
Qualified Applicants 8 52
Observations:
If you’re a Film/TV producer looking for the most options to finance your
production, it’s better to be in the $1M to $30M range than above or below.
Productions: ATL vs BTL Costs
ATL BTL Total
"Crimson" $ 1,116,385 $ 5,117,210 $ 7,780,000
"Stain" $ 6,317,285 $ 17,982,714 $ 27,000,000
"Jane" $ 4,648,314 $ 9,118,977 $ 16,582,490
"Slay" $ 4,442,288 $ 5,157,711 $ 9,600,000
"Dirt" $ 2,469,729 $ 2,688,489 $ 5,358,219
"Buddies" $ 560,807 $ 1,035,250 $ 1,596,057
"Lady" $ 302,976 $ 1,394,342 $ 1,608,784
"Army" $ 15,839,142 $ 10,519,858 $ 28,259,000
"Dog" $ 2,649,396 $ 2,180,106 $ 5,581,050
"Lib" $ 4,512,405 $ 6,887,908 $ 14,863,250

In film production, the people responsible for creative (including the screen
talent) are considered ‘above-the-line’. People behind the camera (the crew and
the day to day filmmakers) are considered ‘below-the-line’.
Is there noticeable cost-cutting on one side of the camera or the other? Not
really. Generally, all costs are coming down as filmmakers aim to fit within the
mid-range budget size.
In the deals we analyzed, above-the-line costs were on average 35%, while
below-the-line costs were 56%. Contingency budgets and legal costs usually
made up the rest (at 6% and 4%, respectively).
Observations:
Producers looking to appeal to private lenders will observe that it’s much better
to spend more money below-the-line than above.
While expensive talent may seem like a smart move to get your film financed by
star-struck equity investors, the data suggests that it’s irrelevant to the types of
groups that lend to filmmakers.
It’s far more important to lenders that the legal, financial, and cost structure of
the film makes sense. Use this data to ensure your budgets are inline with what
they expect.
Contingency Budgets
Contingency budgets remained flat after increasing in 2020 and 2021, likely due
to new costs related to Covid-19.
The average contingency in our study of productions in the $10-15M range was
$700K. Roughly 5-6%.

Our interpretation of this trend is that even though in 2022 Covid-19 doesn’t
pose the same threat it once did, Producers aren’t yet comfortable taking the
risk of eliminating such protections for their cast and crew completely.
Observations:
Producers working on budgets for their films can use this information to ensure
they aren’t asking for too little or too much contingency.
Debt Financing On The Rise
Producers are increasingly realizing they can use debt instruments to finance
production. Media industry specific ‘paper’ is increasingly being leveraged to
gain access to debt. E.g many States have tax incentive programs which can
then be brokered to buyers .
In our study, on average more than 55% of production budgets were completed
with some type of debt financing.
Further analysis revealed that this number was driven mostly by films with
budgets over $10M. This suggests that the more expensive a film is, the more
likely incentive programs and private lenders will play a role.
Observations:
Smaller budget films ($10M and under) may find it harder to get private lenders
into their productions. Yet, it's easier for them to cover their budgets with equity.
Mid-range films ($10M to $50M) have a much more difficult road to raise all the
equity they need (because they need to find larger check-writers), but have a
clearer path to become attractive to Film/TV lenders.

SPOTLIGHT ON GEORGIA

As the leading industry destination for Film and TV production , it's important to
4
explore Georgia filmed productions as a good proxy for what’s happening
around the rest of the country.
In this section we share our industry wide research and observations for
Georgia-based productions.
Georgia Rises as a Production Destination
In only a decade Georgia has emerged as the number one destination for
Film/TV producers in the world. Thanks to the State’s robust tax incentives, cost
of living, Internationally accessible Airport, and other factors, the momentum in
Atlanta doesn’t appear to be slowing down at all.
4
https://en.wikipedia.org/wiki/Film_industry_in_Georgia_(U.S._state)

Georgia’s Entertainment Industry Investment Act was passed in 2005. Initially, it
provided a 10% tax incentive for production companies spending money in the
state. Three years later, that tax credit was increased to 20%, with an additional
10% offered to productions including a “Made in Georgia” logo in their end
credits.
The incentive has kickstarted a production boom in Georgia over the years
bringing a number of notable productions like THE WALKING DEAD,
STRANGER THINGS, and OZARK, which completed filming its final season in
the state last year.

Georgia Lensed Production Data (2018-2022)
Productions Direct Spend Est. Impact5
FY2018 455 $ 2,700,000,000 $ 7,344,000,000
FY2019 399 $ 2,900,000,000 $ 7,888,000,000
FY2020 234 $ 2,200,000,000 $ 5,984,000,000
FY2021 366 $ 4,000,000,000 $ 10,880,000,000
FY2022 412 $ 4,400,000,000 $ 11,968,000,000
Production in Georgia has rebounded significantly, up 12.6% over the 2021
fiscal year and 3.3% over 2019.
Georgia Film Recovers From Covid
The Covid-19 pandemic crippled productions around the world in 2020, with
most of the financial data from that year occurring in the Q1 and Q4 of that year.
That year, Georgia productions saw a 41.35% decline.
While 2021 was an improvement, 56.41% growth over 2020 (the year of the
Covid-19 pandemic), productions were still down 8.3% from pre-pandemic levels
in 2019.
What 2022’s numbers suggest is a ‘return to normalcy’ for Georgia’s production
industry. This seems to be accelerating heading into 2023.
5
Derived from a multiplier of 2.72, a blend of GSU Economist Bruce Seaman’s suggested 1.87 and 3.57,
a number cited by the Georgia Department of Economic Development for years. The multiplier is used
to estimate the overall economic ‘ripple effect’ of the spending of individuals while working on
Georgia-lensed productions.

II. THE OUTLOOK FOR INVESTORS AND
LENDERS

LENDER/INVESTOR ANALYSIS

In this section we share our industry wide research and observations for Film/TV
lenders and investors.
Rising Bank Rates Uncorrelated with Media Lending
The interest rates that financial institutions use to charge interest to TV and Film
borrowers is not the same as the rates that people get for mortgages or small
business loans. Media lending interest is its own area, based on different risk
factors and different security types and assurance.
Generally, financial institutions view Film/TV as a riskier asset-class than other
areas, so traditionally media borrowers pay a premium for capital that is well
above bank rates.
Because of this fact, in this report we compare these media-specific rates with
bank rates. We also defined them as Media Avg., Media Standard, Media
Prime, and Media High rates.

Media finance interest rates and bank rates are uncorrelated but much can be
learned from the intervals between the two.
For the most part, media lending rates are insulated from the fluctuations of
LIBOR, SOFR, WSJ Prime, and FED rates. However, this may change as bank
rates rise.
Media Lending Rates vs. Bank Rates
Interest
Rate 2019 2020 2021 2022
Media 15.00% 15.00% 12.50% 12.50%
LIBOR 1.96% 0.33% 0.51% 5.50%
PRIME 5.25% 3.25% 3.25% 6.25%
SOFR 2.22% 0.36% 0.04% 1.37%
FED 2.00% 0.25% 1.75% 4.00%
Rising bank rates may signal that the banks that finance Film and TV are less
attractive to the ‘best borrowers’, Producers working on qualified productions.
This seems to be the case for the foreseeable future with economists predicting
the US will remain close to recession for the foreseeable future.
Why would Producers go to slow, bureaucratic banks, when the private lenders
can move money faster and at similar rates? Especially if bank lending rates (for
Producers) are likely going to be at, or close to, double digits. Those are rates
borrowers can get from private lenders, in less time.
This shift in the market perhaps explains the rise in groups providing debt to
Film and TV productions.
Money was cheap for a few years (2019 to 2021) but now rates are rising while
industry competitiveness is driving down rates between media lending
competitors.
Observations:

As media lending becomes more common, lenders may eventually need to
lower rates to remain competitive but, for now, lending rates are unaffected.
Definitions:
LIBOR - London Interbank Offered Rate (LIBOR) is the average interbank interest rate at which a
selection of banks on the London money market are prepared to lend to one another. This
chart uses the 12-month trailing average of each year from December at the close of that year.
FED - The Federal Funds Rate is the interest rate which banks charge one another for 1 day
(overnight) lending.
Prime - The prime rate is the interest rate banks charge their best customers for loans.
SOFR - The Secured Overnight Financing Rate (SOFR) is a broad measure of the cost of
borrowing cash overnight collateralized by Treasury securities.
Data Sources:
https://www.global-rates.com/en/interest-rates/libor/libor.aspx
http://www.fedprimerate.com/wall_street_journal_prime_rate_history.htm
https://www.global-rates.com/en/interest-rates/sofr/sofr.aspx
https://www.global-rates.com/en/interest-rates/central-banks/central-bank-america/fed-interest-rate.aspx

Film/TV Private Lending Is Growing
In addition to the rise of mid-range budget movies, the number of independent
financiers funding them seems to be growing.
This list of private media financiers/lenders includes:
● CityNational Bank a.k.a "The Bank of Hollywood"
● JPMorgan Media Finance
● Bank of America
● Comerica
● National Bank
● Redbird Capital
● Shamrock Capital
● Arena Capital
● Baypoint Capital
● Media Finance Capital
● Three Point Capital
● BondIt Media
● Other emerging groups
Financial groups like these are funding film and TV productions in this mid-range
through a mix of equity and debt.
They fill a ‘missing middle’ in the market for productions too small for
institutional banks to consider or where the producers are too new and
unproven to give banks confidence to lend to them.
Observations:
The media lending landscape is becoming more crowded, mostly by investment
banks, alternative debt providers, and private equity funds looking for new
industries to expand yield.

Media Lending Rates Decline
As debt financing rises, and as more financial groups enter the space (or expand
their existing offerings), media lending interest rates are falling.
In 2020 when FilmHedge was started, interest rates on debt to Film/TV
producers averaged 15%.
In 2022 the average interest on debt is closer to 13%.
The industry spread is +/- 7.5%.
Media Finance Interest Rates
Lending Rates 2019 2020 2021 2022
Avg.6
15% 15% 12.5% 12.5%
Prime 7.5% 7.5% 5% 5%
Standard 22.5% 22.5% 20% 20%
High 30% 30% 27.5% 27.5%
Why are interest rates falling as bank rates rise?
Our interpretation of this data is that in an economy with no fears of a looming
recession, where cash was cheap and the perception of media finance was risky,
it was easier for private lenders to borrow capital and charge a premium to
producers for convenience. As the sole alternative to banks, the private lenders
essentially took advantage of their leverage.
Observations:
As of Q4 of 2022, media lenders have lost a bit of leverage. Their own cost of
capital may be rising. This means it’s far more valuable to them to place their
6
Based on analysis of deals from various media lending groups from 2019-2022

money with Producers who will earn returns for them, than to ‘sit’ on
dry-powder.
Also, more competition in media finance generally means they all have to
compete for deals by undercutting the competition.
This is ultimately better for Producers who (in theory) have access to more
capital, from a greater variety of lenders, at lower costs.
Lender Earnings from TV/Film Transactions
In our analysis of closed private transactions, whether financed at FilmHedge,
one of our partners, or by other parties not related to us, we’ve observed the
following:
Transaction Size, Per Film Avg. ROI
(Net)
Avg.
Term
>$1M 10% 11 mo
$1-10M 11.5% 11 mo
$10M+ 12.34% 10 mo
Blended 11.28% 10.5 mo
These average returns do not include any equity, mezzanine, or backend
earnings and are based on net earned interest to investors, above their original
principle.
Investors interested in short-term, high-yield lending, earning between 1–12% in
less than 12 months per transaction have discovered Film/TV lending offers a
lucrative way to diversify their portfolios.

Observations:
Film/TV lending is lucrative but far more lucrative for lenders participating above
$10M per transaction. The earnings at that level are higher, and take slightly less
time to return yield.
Comparing TV/Film Lending ROI with Real Estate Investment ROI
According to the S&P 500 Index , the average annual ROI for residential real
7
estate in the United States was 10.6%, for Commercial real estate it averaged
slightly lower ROI at 9.5%, while REITs averaged a higher 11.8%.
ROI can vary by property type, these numbers don’t account for the differences
between say multi-family and other residency types.8
8
https://www.bankrate.com/real-estate/roi-on-real-estate/#profitability
7
https://www.spglobal.com/spdji/en/indices/equity/sp-500/#overview

Lending Type Avg. ROI
(Net)
Avg. TV/Film Lender ROI 11.28%
Avg. Residential RE ROI 10.6%
Avg. Commercial RE ROI 9.5%
Avg. REIT ROI 11.8%
Comparing these rates across disparate industries, we found that Film/TV
lending is comparable to the returns one might expect from a REIT.
This is just a snapshot, the average returns from each asset class. Are there
residential real estate lenders who return a net 15% on their deals? Yes. Are
there TV/Film lenders who net 20% or more on their deals? Also, Yes.

The takeaway for lenders here, is that media can be as lucrative and reliable.
Observations:
Investors looking for another net 10%+ on their money from industries they
currently don’t have exposure to should consider Film/TV lending.

CONCLUSIONS

Film/TV finance is a somewhat obscure area of lending, but one that more and
more financiers are discovering. It’s a great way for investors to diversify.
2023 is a good time to explore how investing in this space expand your
investment portfolio.
Contact
If you’d like to learn more about opportunities in the space, our team at
FilmHedge.
Lenders and Investors interested in learning more about opportunities in the
space can contact: lender@filmhedge.com
TV/Film Producers can email: producer@filmhedge.com
If you have a question about the data in this report or want to consult our data
team, contact: data@filmhedge.com
Additional Citations
“Fox28: Film and TV Production Post Record Numbers for Georgia in 2019”
https://fox28savannah.com/news/local/film-and-tv-production-post-record-numbers-for-georgia
-in-fy-2019
“AtlantaFi: “Georgia #1 in Film Production in 2020”
https://atlantafi.com/georgia-film-production/
“Georgia Made Film & TV Productions Generate $4.4B For State”
https://www.georgia.org/press-release/georgia-made-film-tv-productions-generate-44b-state-y
et-another-chart-topping-year#:~:text=Kemp
“ROI on Real Estate” https://www.bankrate.com/real-estate/roi-on-real-estate/#profitability

Film + TV Private Finance Insights 2022 [Report]

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