Government grants
A number of governments run programs to subsidise the cost of producing films. UK Film Council provides funding to producers provided certain conditions are met. Governments will provide money to film company’s because they can sometimes benefit from it. E.G. a film set in England will advertise the country to the rest of the world.
The amount of money you get will depend on the potential of a film and who is in it.
Tax Schemes
Schemes are created which effectively sell the enhanced tax deductions to wealthy individuals with large tax liabilities. The individuals pay the producer a fee in order to obtain the tax deductions. E.G. people that get £100,000 a month will have to pay 50 per cent of it in tax, so what they do is they give money to producers, charities and other companies so the monthly income goes down so they won’t have to pay as much tax.
Debt finance
Pre-Sales = Pre-sales is, based on the script and cast, selling the right to distribute a film in different territories before the film is produced. This is the primary means of film financing
Television Pre-Sales = When the producer sell the film rights to television company’s and use the money to pay for the production.
Equity Financing
The TV program Dragons den is a good way to show equity finance, someone will pitch an idea and then if the Dragons think it is good enough and they can get money out of it they Will give money for a percentage of the product it also depends on the potential of the film if they don’t think it has that much potential they might not give as much money.
Product placement financing
Product Placement is where a company will pay a film producer money so they will advertise there product in the producers film. E.G. In a film called Wayne’s world companies like pizza hut, rebook and Pepsi have paid to have there product advertised.
Other ways of funding are:
British Tax Shelters Negative pick up deal Hedge-Fund financing