The Complex World of Film Finance

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Kim Crowie explores the options for filmmakers wanting to finance their productions, and looks at one miracle project’s long road to funding their story.

Money is one of the main things that continue to hold local filmmakers back despite growth in demand for African stories and a wealth of new ideas and talent. It is still an uphill struggle to acquire the finance one needs for development, pre-production, production, post, and marketing and publicity. Added to this is the fact that most local films are made on a skeleton budget of far less than US$1million dollars – limiting a director or writer’s ability to truly explore their imagination on screen. This is already far less than the average Hollywood big-budget production costing upwards of US$100-200million. A great example of this discrepancy is District 9, a South African film with a relatively low budget of US$30million – just over the international benchmark for independent films, which stretches from between US$2million and US$20million.

Fortunately the South African government sees film as a strategic economic sector with much potential. It offers a number of options to ease the burden of sourcing finance. The National Film and Video Foundation (NFVF) has an annual budget allocated to film and television development, and the Industrial Development Corporation offers finances through debt/equity, quasi-equity, bridging finance and venture capital. The Department of Trade and Industry offers a rebate of 35% of the first R6million for local films, and a 25% rebate on the remainder of the budget. If the film is 75% black-owned and managed, they are eligible for a 50% rebate on the first R6million and 25% on the remainder.

South Africa also set up the Emerging Black Filmmakers Transformation Fund (EBFTF) to provide financial, marketing and related support to emerging directors and producers of colour, with budgets capped at R5.2million. Companies like Film Finances, Hollard and others also provide filmmakers with a completion bond which are undertaken before filming in order to guarantee to the financiers that the film will be finished. “It’s like an insurance policy but more expensive because the completion bonder will examine the budget, visit the production office at all stages of production, can even fire the director if required and so on – whatever is required to bring the production in on budget and on time and completed,” explains David Max Brown, Co-Producers on Noem My Skollie.

Continue reading the May Issue for more on financing productions:

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