An alternative to such loss protection was developed by Geneva Media Holdings, LLC (originally as risk mitigation for affluent individuals and "direct investors" under U.S. Traditionally, banks like JP Morgan have an entertainment division that uses proprietary risk mitigation regression analysis to see if future film revenues can meet an exceedance probability (where in the ultimate revenues allow the loan to break even), but this is calculated guesswork, and has caused all of the major national banks to lose millions in bad loans. After these "uninsured" slate financing arrangements (SFA) failed to return even the original principal to investors, the market has sought solutions. Citigroup attempted to wrap the Beverly-1-Sony slate with a property and casualty insurance wrapper (from the formerly bankrupt Ambac Assurance, Corp.). This ended in many lawsuits, starting in early 1999 (with Steve Stabler's Destination Films $100 million bond fund failure and subsequent lawsuit), and continue to this day with Aramid's lawsuit on Relativity's Beverly-1-Sony film slate and the Melrose-2-Paramount slate. Property and casualty companies (P&C) like AIG had offered insurance against film slates and the bonds issued to fund them, but now fully refuse to cover film slates. Past film slate's poor performance records are showing up in public court documents. As production costs have risen, however, potential financiers have become increasingly insistent upon higher degrees of certainty as to whether they will actually have their investment repaid, and assurances regarding what return they will earn. Along with strong ancillary markets in DVD, cable television, and other electronic media such as SVOD, or streaming video on demand), investors were shown that picture subsidies (tax incentives and credits), and pre-sales (discountable-contract finance) from foreign distributors, could help to mitigate potential losses. In the past, risk mitigation was based on pre-sales, box office projections and ownership of negative rights. Even if a film looks like it will be a commercial success "on paper", there is still no accurate method of determining the levels of revenue the film will generate. The main factors determining the commercial success of a film include public taste, artistic merit, competition from other films released at the same time, the quality of the script, the quality of the cast, the quality of the director and other parties, etc. Film finance is a subset of project finance, meaning the film project's generated cash flows rather than external sources are used to repay investors.
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