Slate Financing Agreement

Funding for bridges has increased in recent years in filmmaking. Bridge funding is a response to the common problem of “catch 22” that they need funding to get the players, but they are not able to get the funding without the players. Bridge financing can be used, for example, in scenarios where a filmmaker has an investor`s debt title to finance a film, provided the filmmaker can place an authorized actor, but without money to pay the actor, the filmmaker is not able to meet the investor`s criteria. In this case, a short-term lender can provide a bridge loan to insure the actor with the security title; Once the actor`s payment is paid, the participation would be triggered, and the bridge loan would be repaid with a small interest rate. [21] The poor performance of previous slates appears in public court documents. Property and accident companies such as AIG had offered insurance against film shale and the bonds issued for their financing, but are now refusing to cover the film slates. This ended in numerous lawsuits, starting in early 1999 (with Steve Stablers Destination Films $100 million in loan funds default and lawsuit), and until today with aramide pursuit of The Beverly Relativity-1-Sony film Schiste and the Melrose-2-Paramount shale. Citigroup tried to wind up the Beverly-1-Sony slate with a bankrupt life and accident insurance wrapper (from the former ambac insurance, Corp.). After these “uninsured” shale financing agreements (SFAs) were not even able to return the initial amount of capital to investors, the market looked for solutions. Traditionally, banks like JP Morgan have used an entertainment industry that uses proprietary risk reduction regression analyses to see if the film`s revenues can cope with a probability of overruns (where credit can even break into final revenue), but these are calculated guesses and all the major national banks have lost millions of non-performing loans.

An alternative to such loss protection was developed by Geneva Media Holdings, LLC (initially considered a risk reduction for wealthy individuals and “direct investors” under the U.S. tax incentive IRC 181). Fully-insured media funds are now under scrutiny by risk analysts from large hedge funds, banks and institutional pension plans that specialize in reducing investor risk. The distribution of studio and network roles required funding for television series tailored to the multiple risks and rewards of separation. A practice known as “deficit financing” has developed consistently – an agreement in which the network pays a license to the studio that licenses the show for the right to broadcast the show, but the studio retains ownership. The levy does not fully cover production costs – hence the “deficit” of deficit financing. [19] The pre-sale is based on the screenplay and cast and sells the right to distribute a film in different areas before the film is finished. [15] When the agreement is reached, the distributor will insist that the manufacturers provide certain elements of the content and occupancy; If a significant change is made, funding may collapse. [16] To obtain the “brand names” essential to draw in an international audience, distributors and sellers will often make casting proposals.

[17] Pre-sale contracts with major actors or directors often have (at the buyer`s request) a clause on an “essential element” that allows the buyer (as in the example above) to withdraw from the contract when the star or director leaves the image and it is not possible to obtain a party tent equivalent.