Film finance

In film financing refers to the raising of capital for the production of a film. The financing phase in film production should be started normally parallel to the material development.

Film financing models

While in Europe the custom production constitutes the main part of the film productions and movies are dependent in most cases on film funding, dominated in the United States, the self-production and self-financing of films. This is possible because the major U.S. film production companies have a well-developed marketing and distribution system as well as large advertising budgets.

Common type of production is the production order in the age of television. As the client, usually act television stations, distribution and marketing companies. Unlike productions they are less dependent on public funding as film funds of state and federal or private film fund launched, but draw their funds from the payment of the principal or the principal. These financial contributions are usually staggered paid by the customer to the producer. With the ever tightening budgets in the TV business, the transmitter show willing to concede producer license rights against a financial contribution for some time.

Funding elements

Exist in some countries opportunities for financial support of film production in the form of tax breaks to direct subsidies or aid. Tax relief may be linked to quality specifications, such as the fulfillment of the claims in order to obtain a film predicate. Also aids are usually tied to criteria, such as in the case of the German Federal Film Fund (DFFF ). Here is the fulfillment of a cultural test is necessary, inter alia.

These activities of the states are thought to strengthen its own film industry and also to support its film culture. In accordance with statutory provisions film producers of those States may use these financing options.

Every financing will lead to a claim on the proceeds of the exploitation of the film, at least until the full repayment of funds used in each case. Exceptions are subsidies / grants and tax refunds. About the repatriation of funds used, there is also the possibility of profit sharing. This is usually split between the producer to the share key the copyright of the film. These revenues and earnings claims are defined according to a distribution key in different levels or tiers in the financing agreements.

The financing of a television film ( TV service production ) usually takes place through a contract to the producer with a wholly-owned finance the production costs. The cost for a 90 -minute TV movie in Germany amount to about 1-1.5 million euros.

Each financier is assessed the marketability of a product in order to assess the level of risk can. The lower the marketability of a film, the lower the budget of the film will be. Since German Films are often evaluated only on the national market, the full repayment of the loan the cost of production is rarely successful. Therefore, only limited budget films produced in German are usually available, which may reflect, in contrast to blockbuster movies from the United States on the appearance of the films. Since the main market (USA ), a synchronization is not accepted by the public, the risk of a financial loss of the producer or the film investor in a German-language production is much higher than that of a film produced in English. In order to increase the budget and therefore the " production value ", including film funding may be requested. However, since this is committee decisions in film promotions, this source of funding is not to be regarded as fixed calculable size.

German TV movies are completely refinanced either by fees or advertising revenue for broadcasters. However, charges stop and ever- decreasing advertising revenue for television stations occasion to issue orders with reduced funding, resulting in a cheaper product, and thus the program. Depending on the source of funding, a distinction between own production and TV service production.

For the purpose of presentation of the potential investors must be a package (package) consisting of the screenplay, the calculation occupations for the lead actor and the director, financial plan and analysis options (see film evaluation) are presented.

Film and television producers face a variety of types of financing available. Since these types of financing in some cases very different application procedures are based, have various licensing requirements and the contacts are not established partly in their own language area, is a clear breakdown of the deals are difficult to find. Helpful specialized internet portals can be there.

Financial security

The completion guarantee or completion insurance is an important part of film financing and is fixed in the contract before starting production. Private investors - in the U.S., special company - undertake to raise the necessary funds for film finishing at a budget overrun. A fee is charged in return for which is usually four to six percent of the budget, or agreed profit sharing.

The completion guarantee is therefore for cash-strapped producers an expensive proposition, but is often required for bank loans, if they are ever willing to finance a film as a hedge. Like guarantee commitments on future contracts of film distributors to which a film producer, the loans and completion guarantee required, must PREsell.

Exist, for example its own film banks that are willing pre-finance films by independent producers and small production companies in France and the United States. Repayment is usually in installments, beginning two years after the start of production, and lasts for three to five years. Repayment of the loan is done by proceeds from the film distributor, in turn, is dependent on proceeds from the screenings in theaters. In Germany failed approaches to the establishment of private banks movie already in the 20s.

In Germany, some commercial banks have built up know-how in film financing. In the course of the current crisis in the industry, however, most banks have withdrawn from the market. Commerzbank currently has continued in Berlin, Cologne, Hamburg and Munich special media team. In addition, the states have adopted through its national development banks to the topic and offer financing options.