Variety reports today that although the Hollywood studios aren’t acquiring projects right now, international development funding is coming to the aid of some big-name producers. India’s Reliance Big Entertainment Group, Steven Spielberg’s new backers, have financed their fifth property pickup for Julia Roberts’ production company, and they have similar deals in place with other major stars including George Clooney, Brad Pitt and Jim Carrey. Reliance is confident that for the relatively modest outlay of $20m they’ll turn up enough solid prospects to co-produce some hit movies with their star partners. Good value for their stake.
Institutions around the world are coming to the table with new film financing deals. In recent weeks the Abu Dhabi Imagenation group has announced funding deals for established producers and groups in Singapore, China and Europe are all busy. It’s good to see investors actively looking at film finance as an attractive investment sector, it underscores our own investment philosophy. A diverse portfolio of movie assets over time is a non-correlated asset pool with long-tail multiple revenue streams. That’s hard to beat compared with conventional asset classes and we figure that’s why investors are turning to the movie sector. Of course the cliché of naïve investors being hoodwinked out of their money by fast-talking producers on the promise of a share of a movie’s “profit” is a fading image. In practice most investors these days are very savvy and know what they’re looking at.
Prospective movie investors are looking for the same thing as anyone else: an investment story that holds water in a transparent structure with a good chance of upside. Clear terms on deals and some equality among the participants. It’s not enough any more to offer the “money” the last seat on the bus and the promise of some excitement along the way. Shakespeare In Love was fantastic on many levels and right on the money about attitudes to investors: “Who are you” Mr Fennyman is asked, replying “I’m the money”. So he’s told “Then you may remain as long as you remain silent”!
New waves of capital from Asia, the Middle East or anywhere else are all great for business. The inaugural Qatar Film Festival closed at the weekend with the announcement that the first project under the island state’s new film fund will be a big-screen spectacular about the life of the prophet Mohammed, to be produced by Barrie Osborne of Lord Of The Rings fame. It’s a project not without its challenges, including the likelihood that the prophet himself cannot actually be depicted . . . However we hope that the investors make great money and that they keep on coming back and inspiring others from around the world. The right movie investments can make great profits and as long as investors see value in your movie proposition they’ll feel like they’re a part of the process. Smart producers are packaging projects to show investors real value, partnership and exit strategies that work for them.
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