Backed by funding of nearly £100m, producers promise quality dramas and no tax benefit abuses
An independent British film company has won unprecedented funding for six productions with a combined budget of $155m (£96m), the Observer can reveal.
The company’s financial model is unusual in that investors are offered all six movies, spreading the risk significantly beyond the usual single film, and with a “transparency” that seeks to reassure investors stung by notorious abuses of tax schemes involving film investment.
The producer, Miriam Segal, has a track record that includes the award-winning Love is the Devil, with Derek Jacobi as artist Francis Bacon, and Good, CP Taylor’s Nazi drama with Oscar-nominated Viggo Mortensen.
One of the films, a £21m production entitled The Infiltrator, features a story of greed and deception surrounding the collapse of the Bank of Credit and Commerce International amid fraud allegations. “It’s 23 years old now, but has great contemporary resonance,” she said. Others include a murder story, a drama about economic migrants, and an urban thriller with budgets of £15m, £8m and £11m. “Anything over £9m outside a studio is a big thing in Britain,” Segal said. Although a company such as Working Title, whose films include Notting Hill, also has a slate, they are backed by Universal, the US film giant.
She plans to make “intelligent but commercial feature films”, emulating the US independent model and shying away from more traditional “British fare” with “too many films that three men and their dog will go and see”.
Her announcement follows reports that HM Revenue & Customs is investigating film schemes that exploit loopholes, which has rocked the confidence of investors who have also lost huge amounts of money.
Her “blueprint model” involves the same sales agent, bank and equity source for all six films. Six UK-based businessmen have already ploughed £2.5m just into developing the films.
She said the Revenue has indicated preliminary approval for her tax model for its proper use of the Enterprise Investment Scheme, designed to help higher-risk business to raise funds. Investors will enjoy tax relief, but she said the model eliminates brokers, who in other film schemes were “really” selling just tax benefits.
Segal said that investors are the lifeblood of independent filmmaking, but too many have been encouraged to invest unwisely. She said many potential investors say “‘Why the hell should I believe you, I’ve been so screwed in the past.”
“But there are people trying to make films for the right reasons,” she said. “We’re not all a bunch of shysters,” she added. “We’re creating employment and economic investment. Our primary job is to protect their investment, not rip them off.”
Martin Rushton-Turner, founding investor and tax expert, said it means that these productions have been properly developed, unlike most independent films which are “done on a hope and a prayer”.
Scripts are already written, budgets worked out and they already have commitments from banks and the sales agent who will sell distribution rights, he said, noting that investors’ money will only get drawn down when the banks give the green light for funding. They expect to raise 10% – up to £10m – from investors, averaging £250,000 each, and the rest from the bank and distribution sales. He added: “I have a tax background, so I’m pretty familiar with the uses and abuses of structured finance for tax. This is as good as you can get.”News of the films was welcomed by Adrian Wootton, chief executive of Film London and the British Film Commission. Although he has yet to see details, he said: “If they’ve managed to put together a slate like that with independent financing… it sounds very exciting.”
Need a Loan? Visit Secured Loans Broker.
View full post on Free Secured Loans Advice