Film Financing

Film Financing

There are four main ways of film financing, these include: Tax schemes, Government grants, Debt finance and Equality finance. Tax schemes involve certain governments that have introduced a way of generating enhanced tax deductions from film makers or owners of films. They have created ways where the tax deductions are basically sold to wealthy people with large tax liabilities. They pay the producer a certain amount of money to receive the tax deductions. This person will usually become the owner of the film or rights related to the film, however the producer will continue as the real owner of any rights such as exploiting the film. This particular method of funding is changing however due to governments noticing that it is an inefficient way of supporting the film industry as certain films with very little creation are rising purely to obtain tax deductions. Therefore as of 2007 the UK government decided on something called ‘The Producers Tax Credit’ which basically creates a cash subsidy from the treasury to the film producer.

Government grants again involve certain governments that are running programs, this time to subsidise the cost of creating films. For example in the UK, The UK film Council allows funding to be given to film producers as long as they meet certain criteria such as places like new York will allow funding providing all the filming takes place within that state. The reason for governments being so willing to give out funding like this is because they think that it will inspire lots of creative people to visit their area and therefore promote the country at the same time as creating employment.

Pre sales are basically, based on the script and the cast of the proposed film the amount of money given can differ. For example if someone cast a film with Brad Pitt as an actor people would be guaranteed to watch it purely for that reason, in which case lots of money can be given in advance for production because they know that it will be a watched film.

Product placement is a great way of raising money for filming mainly because it is so easy. If a film is to include a product such as a can of coke and promote the use, with the product labels permission lots of money can be made in the process as a form of advertising. The amount of money paid depends on the popularity of the film. A good example of product placement is in the very famous James Bond films, the film companies have a good deal with various car companies such as Austin Martin where both the film and the car company will benefit.