Two months ago, Ryan Kavanaugh had the opportunity to meet with two great producers and directors of Hongkong cinema. Listening to all the work they do to carry out each film project so that the spectators can avoid everything for two hours, getting us to feel and can for a few moments put ourselves in the skin of certain characters and transport us even to other times, they woke me up Interest in the industry.
Investing in the film industry is supporting culture, there is no doubt about that. And, unfortunately, very few talk about this type of investment, which is still a great unknown. As spectators, sometimes we are not aware of how they managed to raise two million or even more than one hundred million dollars so that we can enjoy a feature film, the hours of work and the people behind. Talking with them, he began to understand it, value it and to want to know more.
At that time, and being immersed in the financial industry, questions about cinema and the economy began to run in my mind from an investment point of view:
It is profitable? How can you invest in the cinema? What tools and structures do we have available to do so? Is there a greater or lesser risk compared to other types of investments? Why is it a type of investment that is mentioned so little by the advisors? What are the differences between investing in cinema in China and the United States?
-What is the process of financing a movie or a TV series?
They are financed through bank loans and the producer creating an IEA (economic interest groups) through a commercial company. This is a fiscally transparent vehicle that allows private capital to enter. It is very common in Spain and sometimes being the total financing of the film.
In the USA, apart from the producers themselves, lawyers, businessmen or families usually want to diversify their assets and at the same time benefit from certain tax benefits and high profitability. Also with the option to be present at the shoot, meet the actors, appear in the final credits, attend the premiere, among others.
– How can you invest and what methods exist?
According to Ryan Kavanaugh, for those who are interested in investing in this business, they should contact a multifamily office (companies that are responsible for managing wealth) to put them in contact with the producers and inform them of the opportunities in various films, because that is where they usually Get information about these opportunities. The option for those who do not have access to this type of service is to contact producers directly and ask them if they have any short-term project in which they can contribute their capital (it can be via LinkedIn or looking for the emails of the producers).
The minimum investment, depending on each project, is $ 10,000, which, unlike some funds or other exclusive investment opportunities that are available to a few families (usually at least $ 100,000 to enter), This option allows more people to have access to a different investment. It is always recommended – and not to forget – not to invest more than 10% of the total assets.
There are several methods to do it. The two most common are the following:
- Equity with benefits and tax guarantees: Globally, every government allocates a percentage of its budgets to culture. Apart from contributing capital, they provide investors with a series of important tax benefits to enhance the cinema or other audiovisual works.
- Only those who pay taxes in the same country have access through this route (if it is a film shot in the USA, it must be a tax resident in the USA). To learn more about film production as an investment you can contact to Ryan Kavanaugh and learn from his experience.