Film Financing

Different Ways in which films can be financed, and how to link them

to your Case Studies

Film Financing

• The Producer (eg. Studio or Production Company) must secure funding for the Production of the film before filming

• The problem with this is that it is hard to predict how much (if any) money a film will make

• Furthermore, there are various legal and procedural problems in securing rights to a film property – it’s a complicated business!

Government Grants

• Grants are some provided by Government Schemes designed to encourage Creativity and develop new talent

• A Film Production can benefit a Country in a number of ways:

• Employment Opportunities• Development of National Culture• Advertising a Location to an International

Audience

Government Grants

• The UK Film Council offers subsidies to filmmakers in the UK meeting certain criteria

• The National Lottery also offers subsidies and Grants to UK-based filmmakers

• The Escapist (2007), Parallel Films was funded by the UK Film Council, National Lottery and Irish Film Council

Tax Schemes

• As mentioned before, there are benefits to a Country in having a Major Film Release shot on their shores

• The UK introduced the Producer’s Tax Credit in 2007 to help entice Film Producers to the UK

• The Producer’s Tax Credit offers a direct Cash Subsidy to Producers choosing to shoot in the UK

• This has helped to bring large-scale productions like The Dark Knight (2008) to the UK

Tax Shelters

• 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

• As a result of this, many American Films choose to shoot at British Studios such as Pinewood and Shepperton

• This also helped to attract large-scale US productions to the UK

• The UK Tax Shelter for Film Investment was discontinued in 2007

Pre-Sales

• 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

• In order to secure their investment, Distributors (usually Major studios like Universal) will expect certain elements that are likely to guarantee success

• These may include ‘Marquee’ names (Stars) or some kind of change to a film to make it more Commercially Tenable

• 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)

Pre-Sales

• Pre-Sales are usually done by territory; e.g. Europe, Australia, etc.

• Pre-Sales can also be made of DVD or TV Distribution Rights

• 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

• This is an example of Horizontal Integration

Working Title Films

• 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’

• 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

Working Title Films

• Working Title Films are also able to secure Pre-Sales because their films contain many ‘Commercially Sound’ elements:

• Popular, Mainstream Genres (Rom-Com)• Big-Name Stars (Hugh Grant, Julia Roberts)• Brand-Name Recognition• They are also increasingly known as ‘Prestige’

Filmmakers, with films such as Atonement (2007)

Warp Films

• 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

• As a result, they are likely to secure funding from sources like the UK Film Council or the National Lottery

Warp Films

• 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

• 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