Βι¶ΉΤΌΕΔ

Press Releases Βι¶ΉΤΌΕΔ Films announces agreement with Pact on changes to deal terms for UK producers

Category: Βι¶ΉΤΌΕΔ Films
Date: 13.05.2008
Printable version

The Βι¶ΉΤΌΕΔ announced some key changes to the deal terms offered to UK film producers, a move that has been warmly welcomed by Pact.

Μύ

The changes are intended to support one of the stated intentions behind the Government's implementation of the UK Tax Credit system - namely to increase UK producers' stakeholding in the films they make and ensure that film revenues in part flow back into supporting a sustainable film industry in the UK.

Μύ

When the UK Tax Credit was introduced in 2007, the Βι¶ΉΤΌΕΔ, the UK Film Council and Film Four signed a joint statement to the effect that, wherever possible, any tax credit that was claimed on a film and used to fund the budget would be treated in the finance plan as if it were equity funding provided directly by the UK producer - it would give the producer a proportionate share of initial receipts alongside the public funders and the other equity financiers.

Μύ

As many films do not reach the net profit stage, this was seen as an important way to push the producer's stake-holding in the film higher up the chain and give a financial return on a par with other investors in the film.

Μύ

In reality, this has proved hard for the Βι¶ΉΤΌΕΔ and producers to achieve in all cases.

Μύ

The key change the Βι¶ΉΤΌΕΔ is making therefore is to create a corridor for the producer from the Βι¶ΉΤΌΕΔ's own equity recoupment. This will apply wherever the tax credit has not been treated as producer's equity even though the funding has been used to help finance the film.

Μύ

The corridor will be a standard 30% of the actual equity recoupment the Βι¶ΉΤΌΕΔ receives on a film and is intended to put the Βι¶ΉΤΌΕΔ back into the position it would have been in if the tax credit had been treated as equity funding from the producer.

Μύ

The corridor to the producer will be mirrored by a similar corridor to the Βι¶ΉΤΌΕΔ of the producer's eventual net profits, if the film is successful.

Μύ

The Βι¶ΉΤΌΕΔ and Pact have also agreed a number of other changes: The Βι¶ΉΤΌΕΔ's broadcast licence in the UK will be for a maximum of 15 years. After five years, if the Βι¶ΉΤΌΕΔ has no further plans to transmit then either the Βι¶ΉΤΌΕΔ or the producer may look to exploit those rights elsewhere in the UK, sharing profits 70/30 if the Βι¶ΉΤΌΕΔ is unrecouped, 50/50 if the Βι¶ΉΤΌΕΔ's equity has been repaid.

Μύ

The Βι¶ΉΤΌΕΔ is also dropping several of its standard requirements around development, in particular the charge of a 50% premium on development costs incurred to date if the project is turned down by the Βι¶ΉΤΌΕΔ and picked up by another financier. The requirements for trust accounts at development stage will also be abolished.

Μύ

Claire Evans, the Βι¶ΉΤΌΕΔ's Head of Operations and Business Affairs for Fiction, said: "A healthy and sustainable UK Film industry is of real value to the licence fee payer and the Βι¶ΉΤΌΕΔ therefore has an important role to play in UK film. We believe these changes will deliver tangible benefits to UK producers by helping to significantly recalibrate the producer's place in the value chain of UK film production and by unlocking the residual value of the films we have helped to create".

Μύ

Jane Tranter, Controller, Βι¶ΉΤΌΕΔ Fiction, said: "Six months ago we created the new Films Board at the Βι¶ΉΤΌΕΔ and announced an increase in funding to Β£12m a year. Together with this announcement, these measures demonstrate the Βι¶ΉΤΌΕΔ's commitment to British Film. The development slate is in rude health and we are feeling ambitious and excited for the future."

Μύ

Andrea Calderwood of Slate Films and Vice Chair of Pact, Feature Film, said: "We're delighted that the Βι¶ΉΤΌΕΔ has shown the way forward with this initiative, which will make a real difference to British film producers. Independent producers put a lot of investment - of commitment as well as money - into their films to make them happen, and this will give them the chance to make a proper return on their investment.

Μύ

"Providing a genuine share of revenues to producers of successful films creates a real partnership between the Βι¶ΉΤΌΕΔ and producers to support a sustainable British film industry, and allows us to work together to build up the quality and range of British films."

Μύ

Notes to Editors

Μύ

• Βι¶ΉΤΌΕΔ Films has an annual budget of Β£12m per annum (increased from Β£10m from the previous Βι¶ΉΤΌΕΔ Charter period) and is an established and credible force within the UK and international film industries.

Μύ

• Recent successes have included Eastern Promises, The Other Boleyn Girl, The History Boys, A Cock & Bull Story, Iris, Billy Elliot, Dirty Pretty Things and Bullet Boy.

Μύ

• The remit of Βι¶ΉΤΌΕΔ Films includes the active development of a broad range of film projects supporting both new and established talent from the initial scripting stage through to raising finance, resourcing, casting and eventually, production.

Μύ

• The day-to-day management of Βι¶ΉΤΌΕΔ Films and decision-making is now the responsibility of a recently established Βι¶ΉΤΌΕΔ Films Board, comprising Christine Langan (Commissioning Editor, Βι¶ΉΤΌΕΔ Films), Jamie Laurenson (Executive Producer, Βι¶ΉΤΌΕΔ Films), Joe Oppenheimer (Executive Producer, Βι¶ΉΤΌΕΔ Films) and Jane Wright (Commercial Affairs and General Manager, Βι¶ΉΤΌΕΔ Films). Christine Langan, Jamie Laurenson and Joe Oppenheimer report to Jane Tranter, Controller Βι¶ΉΤΌΕΔ Fiction, with Jane Wright reporting to Claire Evans, Head of Operations and Business Affairs, Βι¶ΉΤΌΕΔ Fiction.

Μύ

• Pact is the UK trade association that represents the commercial interests of independent feature film, television, children's and animation and interactive media companies. Pact is the largest representative group of screen-based content producers in the UK and the largest trade association in the film, television and interactive media sectors.

Μύ

CM3

Μύ