us watch_us watch 09/05/2014 19:13 Page 1
The Golden Age of
branded content?
or independent film
and TV producers,
the search for new
project financing has
become increasingly tough
in the last few years. In the
wake of the 2007/2008
global financial meltdown
all but a handful of banks
have exited the ‘gap’ movie
financing business, despite
the fact that it was often a
relatively low-risk, highmargin business segment.
Historically, Los Angelesbased banks would give
independent producers
short-term high-fee
loans that would cover
the ‘gap’ between the total
production budget and the
money that had been raised
from investors.
This gap - generally 10%-25%
of the negative cost - was usually
well collateralised by pre-sales
to US and international
distributors, often backed by
letters of credit. The economic
collapse not only caused prices
and demand for US indie
content to decline in the
international markets, the
stability of financial institutions
backing the letters of credit
came into question. US banks,
under pressure from regulators
to close down lending in sectors
with even the appearance of
risk, l \