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29 October 2014
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أغر؟´«أ½ Films announces agreement with Pact on changes to deal terms for UK producers


The أغر؟´«أ½ announced some key changes to the deal terms offered to UK film producers, a move that has been warmly welcomed by Pact.

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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.

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When the UK Tax Credit was introduced in 2007, the أغر؟´«أ½, 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.

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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.

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In reality, this has proved hard for the أغر؟´«أ½ and producers to achieve in all cases.

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The key change the أغر؟´«أ½ is making therefore is to create a corridor for the producer from the أغر؟´«أ½'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.

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The corridor will be a standard 30% of the actual equity recoupment the أغر؟´«أ½ receives on a film and is intended to put the أغر؟´«أ½ back into the position it would have been in if the tax credit had been treated as equity funding from the producer.

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The corridor to the producer will be mirrored by a similar corridor to the أغر؟´«أ½ of the producer's eventual net profits, if the film is successful.

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The أغر؟´«أ½ and Pact have also agreed a number of other changes: The أغر؟´«أ½'s broadcast licence in the UK will be for a maximum of 15 years. After five years, if the أغر؟´«أ½ has no further plans to transmit then either the أغر؟´«أ½ or the producer may look to exploit those rights elsewhere in the UK, sharing profits 70/30 if the أغر؟´«أ½ is unrecouped, 50/50 if the أغر؟´«أ½'s equity has been repaid.

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The أغر؟´«أ½ 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 أغر؟´«أ½ and picked up by another financier. The requirements for trust accounts at development stage will also be abolished.

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Claire Evans, the أغر؟´«أ½'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 أغر؟´«أ½ 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".

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Jane Tranter, Controller, أغر؟´«أ½ Fiction, said: "Six months ago we created the new Films Board at the أغر؟´«أ½ and announced an increase in funding to آ£12m a year. Together with this announcement, these measures demonstrate the أغر؟´«أ½'s commitment to British Film. The development slate is in rude health and we are feeling ambitious and excited for the future."

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Andrea Calderwood of Slate Films and Vice Chair of Pact, Feature Film, said: "We're delighted that the أغر؟´«أ½ 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.

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"Providing a genuine share of revenues to producers of successful films creates a real partnership between the أغر؟´«أ½ 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."

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Notes to Editors

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  • أغر؟´«أ½ Films has an annual budget of آ£12m per annum (increased from آ£10m from the previous أغر؟´«أ½ Charter period) and is an established and credible force within the UK and international film industries.
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  • 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.
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  • The remit of أغر؟´«أ½ 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.
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  • The day-to-day management of أغر؟´«أ½ Films and decision-making is now the responsibility of a recently established أغر؟´«أ½ Films Board, comprising Christine Langan (Commissioning Editor, أغر؟´«أ½ Films), Jamie Laurenson (Executive Producer, أغر؟´«أ½ Films), Joe Oppenheimer (Executive Producer, أغر؟´«أ½ Films) and Jane Wright (Commercial Affairs and General Manager, أغر؟´«أ½ Films). Christine Langan, Jamie Laurenson and Joe Oppenheimer report to Jane Tranter, Controller أغر؟´«أ½ Fiction, with Jane Wright reporting to Claire Evans, Head of Operations and Business Affairs, أغر؟´«أ½ Fiction.
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  • 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.

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Category: أغر؟´«أ½ Films
Date: 13.05.2008
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