Getting Your Movie Funded

capital corp merchant banking movie financingAn experienced funding group understands that any motion picture can be broken down into three stages of funding before general audiences get the opportunity to see it.

The first stage of a motion picture is the development or perhaps acquisition of the intellectual property that will serve as the basis of the film. This intellectual property could be the idea of the film (treatment) or script of the eventual motion picture.

The second and third stages of a motion picture are production and distribution, respectively. Production is usually the largest cost of any motion picture financing: it includes pre-production, principal shooting and post-production/editing.

Distribution, by either theater, DVD or electronic outlets, can also be seen as a large cost depending on the distribution strategy chosen and potential inclusion of P&A (publicity & advertising) and this is what makes it trickier. One opportunity would be for the studio to which the film was pitched/created to also step in to distribute the film to its affiliated distributors and support the P&A expenses. Another scenario would be for the film producer to obtain financing for the fist stage of a motion picture and then go to a larger studio to complete production and distribution.

There is also a third option, known as “negative pickup,” in which the producer secures distribution agreements from studio(s) to distribute the film upon completion (which will also be regarded as collateral to the lender).

The last option is for the producer to secure lending from an outside group for any gap in funding to planned distribution not addressed by one of the previous scenarios.

It should be noted each of the above options can be more ideal than the others based on the goals of the producer and film budget – two elements that must be taken into account.

Always make sure that you make an informed decision in all cases,

All the Best,

The Capital Corp Team

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