Film finance recoupment waterfall

Jan 12, 2020 a waterfall payment is a plan where highertiered creditors receive interest and principal payments and lowertiered creditors receive only interest. The classes will always be kept small in order to intensify. The cash flow waterfall ensures that each cash flow item occurs at the correct seniority to other items. Indiefilm distribution payment waterfalls 101 the guerrilla rep.

Film finance cinema box sales agent box office feature film film photography filmmaking storytelling this or that questions. Approaching a business plan for a film production company. Does the business plan have a realistic recoupment schedule. Most movies are financed via multiple sources, and not all are cash transactions or investing hard money. Film financing is a notoriously volatile investment. From the total income to producer from worldwide sales and government incentives, any tax obligations and bank loan are repaid first. What is a recoupment schedule for your film or stage 32. Film finance recoupment waterfall goyal brothers prakashan. Presale, gap, bridge lending and recoupment waterfall schedules. Film finance recoupment for private equity investors may 16, 2018 entertainment finance given the precarious state of foreign presales nowadays, the majority of a film s budget must come from private equity investors. In order to make the allocation and distribution of revenues manageable, each independent film and tv production has a recoupment schedule.

How to finance an independent film in the current marketplace. Now you have the power to control the complex components that make up your finance plan. This tutorial outlines key categories of cash flow items and how to present the cash flow waterfall in comparison to the cash flow statement in a project finance model. You can raise finance in other ways and combine that finance with the eis finance, though it is unlikely that your eis investors will be able to finance the film in other ways. Without going into detail about the sorts of debt or equity financing, they all have in common that the financial contribution is being recouped by. You better be damn sure you know exactly what the deal is. To keep this simple, lets assume there are no bank loans, and your movie is fully financed by private equity. Key considerations in film finance white paper 3 of 4. Greatfor your daughter and her aspiring filmmaker bestie. Lets look at different financing plans, so you can see for yourself how everything is put together. Experienced producer andrena finlay goddess, razzle dazzle, me myself i will be offering a series of producer workshops over the coming year, beginning with two workshops in november and december. Once the finance plan is constructed, we will prepare a corresponding recoupment waterfall. Equitable recoupment, a judicially created doctrine, allows taxpayers to avoid the bar of an expired statutory limitation period. There is a renewed effort by production service providers to expand their operations into financing and distribution.

If you are truly putting in the effort to get your film financed, you will be meeting with film investors, talking to people who know film investors, and getting in contact with people who know people who know film investors. Film financing and recoupment melbourne tickets, mon 1811. Screenadvantage is an indispensible tool, creating clear, comprehensive and professional reports for your film finance plan. May 16, 2018 film finance recoupment for private equity investors may 16, 2018 entertainment finance given the precarious state of foreign presales nowadays, the majority of a films budget must come from private equity investors. For this example, well assume the sales agent has already recouped their expenses. Film finance recoupment for private equity investors. What is a recoupment schedule for your film or tv production. Back end net receipts or profits generated by the film that is payable to.

This amount would then be treated as an investment somewhere on the recoupment waterfall. Dont overlook this fundraising strategy shares while narrative filmmakers may be more familiar with seeking equity investments to fund their work, documentary filmmakers have only recently turned to this type of funding. Provide accurate sales projections for film financing by. Over the course of a weekend, bafta and logie award winning producer andrena finlay will take participants through the preparation of a feature film finance plan using both the screen australia finance plan template and a microsoft excel template. Film financing and recoupment melbourne tickets, mon 18112019 at 10. But to finance a film project, the project needs to have buyers, and those buyers need to be anticipated before the movie goes into production. In this 10 hours of intense learning, you will come away with a detailed understanding of how to construct and read a feature film finance plan. Jul 16, 2018 the best advice we offer to both early stage as well as seasoned producers, creatives and executives alike is that one should be spending an equal amount of time understanding, perfecting and transparently communicating the financing structure and relationships of a film finance and recoupment plan as they are on the creative elements. Well assume another 10,000 dollar sale has come in for easy math. Contoh kasus problem solving cycle kesehatan purpose of imaginary numbers allstate agency owner.

Jeff steele is a veteran financier, executive producer, media fund manager, and consultant, who is also active in social enterprise, 3d printing, and democratizing everything. Alternative film funding investments include soft money, deferred payment, profit participation, product placement, crosspromotion and multiple other ways to decrease a film. Independent film financing how it works new york entertainment law lawyer. He has worked on films such as the 51st state, goodbye mr. A backtobasics approach to the byzantine world of waterfalls, hurdle rates and preferred returns posted by daniel lawrence abrams, monday, august 10, 2015 before you can negotiate your own deal as a producer, you should have a strong understanding of how revenue waterfalls work and how the future pie can be split up. How to recoup on film finance investment the kushner offices. The recoupment schedule combines all the single deal terms negotiated between producer on the one hand, and financiers, talent, sales agents, coproducers and service providers on the other hand. Recoupment schedule example with drafting notes note. But for you dad, just how exactly are you going to get your money back if you finance the project.

So in the first waterfall, the sales agency takes 20% or 2,000 usd, then the remaining 80% 8000 goes down the line. Sample recoupment schedules, alternative financing models, glossary of film financing and banking terms philip alberstat is a media finance and production lawyer specialising in film, television and broadcasting. Our collection account management fintage cam service ensures that all parties with a financial interest in a film or television production, from producer to financier to profit participant, will receive their preagreed share of the revenues collected. Film finance recoupment waterfall film finance recoupment waterfall goyal brothers prakashan. Visit this article for links to a sample finance plan and recoupment waterfall, and read about the five most common mistakes shana sees in applications. Recoupment is the process of earning back or recouping an investment. In the united states, the value is typically based on a forecast of revenues generally 10 years for films and 20 years for television shows, beginning with theatrical release, and including dvd sales, and. When preparing your film for financing, showing your investors accurate sales projections is essential. Feb 20, 2017 today, im going to tackle a couple of related topics which seem to come up frequently in reader questions and comments how is a cinemas box office income distributed, and how much of it ends up with the filmmakers. Worldwide sales projections, finance plan, recoupment waterfall with roi scenario. Film financing and recoupment now offering online, in depth, film financing and recoupment tuition via zoom. It is not a government bond or a cd with a guaranteed return on investment. Different financing scenarios will be discussed and watch how returns cascade down the waterfall.

Learn how to finance your film project and take it from page to screen. Film development or production will usually be qualifying trades which is why eis is a popular way for independent film production companies to raise finance. Producers and filmmakers of independent films and tv series deal with a multitude of parties regarding the production, financing and distribution of their f. The enterprise investment scheme, or eis, can be great for independent film companies that want to raise finance. I wrote an entire 7part blog series on why film investment is in the. Wiley launches film finance application news screen. The distribution waterfall is the order in which a private equity fund makes distributions to limited and general partners. The reason you need to know how to make an indie film pitch deck is simple. A description of the elements that create the waterfall.

These two critical documents form the commitment and then contracting. The class will cover financing structures, different types of money, potential revenue streams, recoupment corridors and waterfalls i. Aug 17, 2017 hollywoods soaring marketing cost dilemma. The complexity inherent in film funding typified by smokeandmirror accounting and waterfall recoupment schedules that seem to punish those taking the. The complexity inherent in film funding typified by smokeandmirror accounting and waterfall recoupment schedules that seem to punish those taking the greatest risks means cinema is always prone to borderline behavior and bareknuckle negotiating tactics from all quarters. On the face of it, the first question seems simple.

There are so many factors on hand when making a movie that it can be difficult to convince someone who has money that they should part with it to invest in your film since theres no 100% certainty that they get an. Income comes in from a variety of sources and the money is then handed back to the filmmakers via a number of third parties. Listen here for more on finance plans and recoupment. Screen australia senior investment manager shana levine explains two crucial documents for australian productions the finance plan and recoupment waterfall. Jan 24, 2018 each piece of the waterfalll takes a slice of the film. The best advice we offer to both early stage as well as seasoned producers, creatives and executives alike is that one should be spending an equal amount of time understanding, perfecting and transparently communicating the financing structure and relationships of a film finance and recoupment plan as they are on the creative elements. Emery pc argued that the levy should not proceed because it was entitled to offset the employment tax liability with the overpayment by emery llc through equitable recoupment. What you need to know to talk to investors about your movie. If there exists a one stop shop for a business plan and crash course in film finance this is probably it. The film financing course is essential learning for anyone seeking to raise money for any.

Jul 02, 2014 jennifers body director karyn kusama has been a slated member since 2015. Aug 18, 2017 in order to make the allocation and distribution of revenues manageable, each independent film and tv production has a recoupment schedule. How to calculate qape if you havent yet got a production budget. Producer offset and how to use it in the finance plan. Recoupment schedule template new zealand film commission. In an attempt to unite the family, peter and leila take zahra on a road trip in search of a waterfall. Sep 22, 2019 even better, your daughter will get to star in the movie if her highly reputable and flush father helps finance the movie. Your film business plan should have a realistic recoupment schedule. Distribution, entertainment law, film, financing, producing, television. Screen advantage is able to generate finance plans, ownership reports and recoupment waterfalls. A common model deployed structures these placements as deferrals or as inkind investments.

They normally look something like this, if the buyer is paying an mg or a license fee to the sales agent. The recoupment waterfall report is broken into three. Feb 01, 2017 all the research and financial data involved in creating your business plan will be used to provide all the information you need in a pitch deck, film finance plan, prospectus and even in the private placement memorandum ppm if you are using one. Feb 12, 2018 not necessarily the type of waterfall were talking about here what is a films waterfall. The insiders guide to film finance paperback november 4, 2004. It looks great to compare your film to other successful indie films, but the brutal reality is that this is unrealistic. Jun 25, 2015 lecturetopics sources of gross receipts domestic and foreign proceeds tax subsidies the independent model of film finance senior debt financing equity financing the participationswaterfall cost recoupment and preferred return forms of participations modeling film performance comparable films analysis. A simple guide to financing an independent film with. Peterson explained, its basically where the money is going to when it comes back and the order in which various parties receive this money. These two critical documents form the commitment and then contracting basis for all of the investors and stakeholders. Lets discuss recoupment orders, recoupment waterfall and how it all works. May 26, 2016 the complexity inherent in film funding typified by smokeandmirror accounting and waterfall recoupment schedules that seem to punish those taking the greatest risks means cinema is always prone to borderline behavior and bareknuckle negotiating tactics from all quarters. Film finance recoupment for private equity investors rodriques. It is also important to communicate clearly to the eis investors and any other financiers, where they will sit in the recoupment waterfall and how and when they are.

Screen advantage will be launched officially at the uk film centre on saturday morning. Because it is a governmentbacked tax incentive scheme designed. Jun 08, 2016 most filmmakers in the independent film world likely have to defer their producer fees and, if other talent will agree to defer their fees, then that much less money has to be raised to make the film. The top of the waterfall is the money source, and the bottom of the waterfall is the filmmaker. Next, how the money will return to you after the film is sold, licensed, put in theaters, on tv etc, is commonly called a financial waterfall in hollywood. The recoupment waterfall the way a film s income is collected and distributed is known as the recoupment waterfall.

Still, you have to get investors, and here are really tough questions that investors ask. Gender diversity among film professionals working in sales and distribution june, 2018 if you want to see how money flows back up this chain, you may enjoy my article from last year entitled how is a cinemas box office income distributed. Its the same in television, with the notable exception being a broadcasters. This will include an understanding of marketplace and. Film financing and recoupment sydney tickets, sat 0211. Deferred compensation can be paid out of gross revenues, net. Revenue waterfall this is the contractual order in which financial contributors to a film s production are repaid. Features of a cash flow waterfall in project finance. View jeff steeles profile on linkedin, the worlds largest professional community. Its a useful means of addressing the concerns of profit participants skeptical that the film will earn enough revenue to make worthwhile a late placement in the waterfall. Film finance is an aspect of film production that occurs during the development stage prior to preproduction, and is concerned with determining the potential value of a proposed film. Lecturetopics sources of gross receipts domestic and foreign proceeds tax subsidies the independent model of film finance senior debt financing equity financing the participationswaterfall cost recoupment and preferred return forms of participations modeling film performance comparable films analysis. The importance of recoupment schedules for you stage 32.

Film financing and recoupment sydney tickets, sat 02112019 at 10. Perhaps the most important report generated by screen advantage, the recoupment waterfall displays the information needed to present accurately how revenues received will be allocated. Film financing and recoupment melbourne tickets, mon 18. Andrena finlay launches workshops for emerging producers. The actual fees will vary between films, so the ones ive used are the average fees of 1,235 film professionals i interviewed in 2014. David zannoni teaches you on the topic of the importance of recoupment schedules for your film or tv project and how to put one together. Allow me to introduce you to the film distribution waterfall. Use our proven film pitch deck presentation template to wow movie investors. A waterfall is how money from foreign sales and domestic distribution deals flows to the filmmaker. Call 212 4802400 hrbek law llc is dedicated to serving our clients with a range of legal services including entertainment law and business litigation cases. The information that is usually included in a film business plan include.