Magazine article Screen International

UK Film Finance: BFI Backs Joined-Up Approach

Magazine article Screen International

UK Film Finance: BFI Backs Joined-Up Approach

Article excerpt

A new joint-venture scheme from the BFI aims to drive up investment in UK independent films by helping producers and distributors to share the risks and rewards of distribution.

In a challenging UK market, producers and distributors should share more risk and reward. That is the idea behind the British Film Institute's new joint-venture scheme.

The BFI is rolling out the initiative - which will see BFI-backed UK producers split minimum guarantees and revenues with UK distributors - to stimulate investment in UK independent films.

"UK distribution has been in a difficult place in the last few years," BFI Film Fund director Ben Roberts says. "There haven't been as many distributors coming on board more challenging films in the early stages, but this could help.

"If this provides a comfort for distributors to invest in some of those riskier projects that we're investing in, then that can only be a good thing," he continues.

The BFI will initially launch a six-project pilot test of the optional scheme in order to gauge interest and viability.

Under the terms of the new agreement, a producer would invest part of a Lottery production award from the Film Fund as its contribution of up to 50% of the UK distribution minimum guarantee (MG) for the film in question.

In return for sharing the distribution risk, the distributor would allow a 50% share (providing producer investment had been 50%) of its net revenues to be held in a Locked Box by the BFI for reinvestment by the producer in their future productions.

From the date distributor's gross receipts are first received and throughout the recoupment period a 'distributor base fee' of 15% will be kept by the distributor as a contribution towards its overhead for distributing the film.

Once all distribution costs and both MG contributions have been recouped, the fee will cease to be payable. From that point on the full fee specified in the relevant distribution agreement will be shared between the distributor and the producer on an ongoing 50/50 basis (or other agreed percentage) with any ongoing costs deducted 'off the top' first.

Sales companies who make the UK sale are not expected to take a commission on the producer's lottery MG portion.

Sharing risks

"For a distributor, this aligns our [distributors' and producers'] imperatives," says Alex Hamilton, managing director, eOne UK, and Independent Film Distributors' Association (IFDA) chair. "Sometimes you want producers to be more focused on the outcome of the film and less on asking us to spend more money.

"This is another way for UK distributors to be able to look at and consider UK films," he continues. "In the marketplace British films often aren't as competitive as their US counterparts. At times, we've preferred to pick up US films because they are less risky - for example, the p&a can be the same for both UK and US films if you're going to push them out wide." According to BFI executives, the initiative has the support of producers' trade association Pact and broad support from members of IFDA.

Studios have not been part of the discussions and Screen understands that at least one or two larger UK indie distributors have expressed reservations about the scheme's fee structure.

"If a film performs, the upside for producers out of this is very advantageous," says producer and Pact film policy group chair Marc Samuelson. …

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