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How Hollywood Movies Are Financed Wall Street Film Financing - Financial Services Loans 1998

Added on: 2013-12-24 00:00:00 Total Views: 11,178

Description: Video details - LLXLSnAbD20 : Generally tax-advantaged theatrical film and television investment for affluent individuals comes with little risk. Most often, the cost of production is recouped by a combination of federal and state tax incentives, thereby eliminating most of the risk. Capital is still required as a direct investment (partnerships can be used), but must also be "at risk", which allows § 181 IRC write-offs. For example, if a private equity source is found (individuals with capital or a private wealth management firm representing individuals personal funds), the investor pays for the film or TV production, and receives back an equal amount of capital in tax-incentives, pre-sales and state tax credits, thereby making the investment and recoup a wash. This is a highly specialized tax play, and is often looked upon as risky by those who do not understand the risk mitigation offered through state tax and federal tax incentives like § 181 IRC.http://en.wikipedia.org/wiki/Film_financeStory rights: The right to produce a film based on a play, novel, video game or as a remake or sequel can cost anything from a couple of thousand (Leaving Las Vegas) to over $10 million (the video game Halo). An original screenplay by a Writers Guild of America member can cost from around $50,000 (Quentin Tarantino's True Romance) to $5 million (M. Night Shyamalan's Unbreakable).Screenplay: An A-list screenwriter can be paid 100,000 to 2 million to write a script, including $400,000 a week for each rewrite of a film in trouble,[1] script doctors may be called upon to revise the final draft at $100,000 to $200,000 a week. Recently, Columbia Pictures has been offering the best screenwriters 2 percent of the gross profits (after the production and marketing budget has been deducted).Producers: Film producers and executive producers are often well-paid, with a top producer earning a seven-figure salary upfront as well as bonuses and a share of the profits. For Spider-Man, producer Laura Ziskin is estimated to have been paid over $30 million.Director: The DGA minimum is about $16,800 a week, for a minimum of ten weeks' work.[2] An A-list film director can command $5 to $10 million a film.Cast: While the bulk of the cast usually gets paid by the Actors Guild standard rate of about 2300 US$ per week,[3] famous and bankable film stars can demand fees up to $30 million per film, plus perks (trailer, entourage, etc.) and possible gross participation.[4] Sometimes an actor will accept a minimal fee in exchange for a more lucrative share of the profits. Union extras are paid around $130 per day (plus extra for overtime or if they provide their own wardrobe) but on a low-budget film non-union extras are paid less, sometimes nothing at all.Production costs: The cost of producing the film includes crew wages, production design, live set and studio costs, costumes, catering, accommodation and transportation. The director of photography is usually the highest paid member of the crew at about $500,000 to $1 million.Visual effects: The cost of Computer-generated imagery effects and other visual effect work in post-production depends largely on the amount of work, the desired quality, and the effects company involved (Industrial Light and Magic being the most prestigious and expensive); extensive effect work, as in Avatar or The Lord of the Rings can easily cost up to a hundred million dollars.Music: The top film composers can ask for a seven-figure salary to compose an hour or so of original film score. An original song by Christina Aguilera (Shark Tale) or Kanye West (Mission: Impossible III) could cost $1 million, and the right to use a song by David Bowie or The Beatles cost $300,000. (In addition, the artist may wish to see a screening of the film to see if it meets their approval; Bowie did so with the film Training Day, giving the film a good amount of pre-release publicity.). More recently, the rights to have Led Zeppelin's "Whole Lotta Love" on the film Lords of Dogtown cost producers $3 million. Sometimes a film will turn to unknown or little-known artists willing to licence the rights to their song for a small fee in exchange for the publicity. Typically, the music budget of a major motion picture is about 2 percent of the final total, however Spider-Man's music budget was $4.5 million.http://en.wikipedia.org/wiki/Film_budgeting

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