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Digital Animation & Economic Development

Digital Animation & Economic Development. Scope of Work RO, MK, BG, SCG Investors/Donors: 20+ Studios Visited: 30+ Capacity Education Film Financing Digital Media Parks. -2-. 1. Capacity Findings Capacity exceeded expectations Many small studios Local advertising dependency

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Digital Animation & Economic Development

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  1. Digital Animation & Economic Development

  2. Scope of Work • RO, MK, BG, SCG • Investors/Donors: 20+ • Studios Visited: 30+ • Capacity • Education • Film Financing • Digital Media Parks -2-

  3. 1. Capacity Findings • Capacity exceeded expectations • Many small studios • Local advertising dependency • Very high quality • Some large studios (70+ employees) -3-

  4. 1. Capacity Recommendations • “Production pipeline” R&D effort • Regional collaboration • International Promotion Campaign -4-

  5. 2. Education Findings • Free Introductory Training (MK 3D@E-Schools) • Professional Fee-Based Training (Chiron, Belgrade) • On-the-Job Training (WorldwideFX) -5-

  6. 2. Education Recommendations • Replicate MK 3D @ E-Schools – BG • Expand Chiron program • Scholarship for women  gender balance • Shared curricula: E-Schools/Chiron/Universities -6-

  7. 3. Film Financing Findings Government /Donor Agency Funding: • Most countries have existing film financing funds • Multiple donor agencies interested Private Equity Investors: • Strong interest to invest in media projects • Plenty of capital, but no capacity to evaluate • 3rd party expertise needed to evaluate deals -7-

  8. 3. Film Financing Recommendations • Secure $5M investment for film project • Identify promising and real opportunities • Identify other potential projects • 3rd party financial analysis • Long Term: a targeted Digital Media Fund -8-

  9. 4. Digital Media Park Benefits • Professional space • Wired and full capacity • Collaboration/networking • Lower rent • Central services • Incorporated training • Rental of digital/film equipment -9-

  10. 4. Digital Media Parks Findings • Attractive to all studios • Large building inventories • University/Gov Partners • Example: IRIDE (RO) and MK • Venture capital exists to finance digital ventures • But no real estate equity to finance digital parks -10-

  11. 4. Digital Media Parks Recommendations • Support local teams: BG and SCG • Research properties • Research funding for properties • Development Team guides local teams • Create an Eastern Europe Real Estate Fund and Regional Economic Development NGO • The for-profit Fund finances the self-sustained NGO -11-

  12. $75 – 100 million • Eastern Europe Real Estate Fund The Fund provides equity for economic development real estate projects and digital media parks: • Spreads risk and reduces risk • Cleans contamination • Clears title • Helps get permits/entitlements/land assembly • Mobilizes government assistance • With NGO partner, makes tough deals work -12-

  13. $75 – 100 million • Eastern Europe Real Estate Fund • Concentrates Real Estate Expertise: • Structures financial deals that work • Manages government, NGO and private relationship • Attracts high-quality investment partners • Attracts International Capital to region • Creates Eastern Europe Economic Development NGO that is self-sustaining -13-

  14. Eastern Europe Real Estate Development: The Challenge • Many private equity funds in region • But none are real estate focused • Great untapped opportunities for a dedicated real estate fund • Developers hindered by very high equity requirement (50% – 65%) • Fund as partner shares this equity requirement • Fund’s presence reduces future equity requirements -14-

  15. Case Study: IRIDE Business Park • 30,000 sq meter bldg dedicated to digital media • Shared filming facilities and equipment • Fully leased at construction • 50% equity requirement is a burden on developer -15-

  16. United States Experience • Real Estate Private Equity Funds for Economic Development • $0 in 1998  $3B in 2005 • Institutional Investors (banks, insurance companies, pension funds) • US Pension Funds want intl real estate investments • Dramatic Impact on Economic Development • Provides scarce equity • Provides expertise to developers • Cleans up contaminated property • Assists with governmental process and approvals • Funds self-sustaining regional NGO for economic development -16-

  17. Real Estate Financing Recommendation • Create a $75M – $100M Eastern Europe Real Estate Fund • Converting old buildings and blighted factories/military sites • ULI Conference findings • Contaminated site/brownfield clean-up • Revitalizing & re-positioning dilapidated buildings • Housing  Manufacturing • Offices  Technology Parks • Business Parks  Retail -17-

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