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Underground and earth-sheltered living is all the rage these days. Up to her eyeballs in debt, Tori Spelling just can’t stop burning the cash. Disney CEO Robert Iger at FOX Studios on September 24, 2013 in New York City. The examples and perspective in this article may not represent a worldwide view of the subject. Film finance is an aspect of film production that occurs during the development stage prior to pre-production, and is concerned with determining the potential value of a proposed film. A number of governments run programs to subsidise the cost of producing films.
For instance, until it was abolished in March 2011, in the United Kingdom the UK Film Council provided National Lottery funding to producers, as long as certain conditions were met. Governments are willing to provide these subsidies as they hope it will attract creative individuals to their territory and stimulate employment. Also, a film shot in a particular location can have the benefit of advertising that location to an international audience. Government subsidies are often pure grants, where the government expects no financial return.
These so-called “soft-money” incentives are generally not realized until a theatrical or interactive production is completed, all payments are made to workers, financial institutions, and rental or prop companies within the state or province offering the incentives. A number of countries have introduced legislation that has the effect of generating enhanced tax deductions for producers or owners of films. The individual will often become the legal owner of the film or certain rights relating to the film. A relatively new tactic for raising finance is through German tax shelters. The tax law of Germany allows investors to take an instant tax deduction even on non-German productions and even if the film has not yet gone into production.
This tactic favors big-budget films as the profit on more modestly budgeted films would be consumed by the legal and administrative costs. Despite its frequent use in the past, the above schemes are all but gone and are being replaced by more traditional production incentives. The DFFF is a grant given by the German Federal Commissioner for Culture and the Media. To receive the grant a producer has to fulfill different requirements including a cultural eligibility test. The film finance calculator on germanfilmfinance. 10 million could be raised, but UK law insists that part of the film is shot in Britain and that the production employs a fair proportion of British actors and crew. Pre-sales is, based on the script and cast, selling the right to distribute a film in different territories before the film is completed.