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Producer Distributor Film Fund Industry Briefing May 2011

Producer Distributor Film Fund Industry Briefing May 2011. Producer Distributor Film Fund Industry Briefing May 2011. PDFF OBJECTIVES 1.To broaden the scope of Australian films by encouraging major distribution outlets to invest in films with bigger budgets.

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Producer Distributor Film Fund Industry Briefing May 2011

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  1. Producer Distributor Film FundIndustry Briefing May 2011

  2. Producer Distributor Film FundIndustry Briefing May 2011 • PDFF OBJECTIVES • 1.To broaden the scope of Australian films by encouraging major distribution outlets to invest in films with bigger budgets. • 2. To provide a breadth of entertaining Australian films that work with local audiences and on the world stage. • 3. To offset the negative economic and employment impact of the Australian dollar on the local industry because of the serious decline in “Offshore” production i.e. footloose US Studio productions e.g. The Matrix. • 4. To entice Australian actors, directors and writers back home. • 5.To make Australian film businesses self-sufficient. • 6. To change commercial behaviour in local film investment.

  3. Producer Distributor Film Fund David Court May 2011

  4. Producer Distributor Film FundIndustry Briefing May 2011 • Operation of the Fund • $60 million over 3 years • matching loans, not equity • same terms for all • managed by Screen Australia • wound up after 5 years

  5. Producer Distributor Film FundIndustry Briefing May 2011 • Loan terms – recoupment • Distributor recoups marketing and release costs • Distributor receives 50% of normal commission • Distributor and Fund recoup advances pro rata and paripassu • Distributor receives balance of commission • Fund receives interest

  6. Producer Distributor Film FundIndustry Briefing May 2011 • The model – assumptions • average film budget $15m • p&a spend 10% of budget • financing • Australian distributor 8% • ROW distributor 25% • Film Fund 33% • Producer Offset 33% • distributor commission 30% • interest rate 12%

  7. Producer Distributor Film FundIndustry Briefing May 2011 The model – base case

  8. Producer Distributor Film FundIndustry Briefing May 2011 • Outcomes in base case • Australian distributors recoup 79% of advances (plus commissions) • ROW distributors recoup 65% of advances (plus commissions) • PDFF recoups 73 cents in the dollar (68 cents loan recovery, 5 cents interest) • Producers net back 30% of Producer Offset

  9. Producer Distributor Film FundIndustry Briefing May 2011 • Outcomes continued • 17 films financed over 3 years • Fund losses of $28 million after 5 years • present value of subsidy = $31 million

  10. Producer Distributor Film FundIndustry Briefing May 2011 • Producer perspective • new financing avenue • bigger films enabled • enhanced equity position • 30% expected average offset recoupment

  11. Producer Distributor Film FundIndustry Briefing May 2011 • Distributor perspective • leverage • limited recourse debt • preferential recoupment • commercially driven

  12. Producer Distributor Film FundIndustry Briefing May 2011 • Government perspective • precedent (1970s) • market driven intervention • capped commitment • low admin/delivery cost

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