Since 1977, Yoram Gross Film Studios has made an animated film approximately once every 18 months. That’s no mean feat for an Australian producer, but where has the money come from?
According to Sandra Gross, the studios have always relied on private investors, and some form of participation by a distributor.
That’s in addition to the company investing its own funds. Some 70% of YGFS’ revenue is derived from overseas sales of its 12 previous films. U.S. cable sales, handled by Cori Intl., are the biggest source of income.
During the 1980s, investors received tax concessions via 10BA writeoffs. Those concessions were reined back to a basic 100% writeoff in 1988-89 when the Australian Film Finance Corp. (FFC) was established to become the industry’s principal source of funding.
Confusion over l0BA’s future in mid-1988 saw YGFS shy away from private investment for the first time. The studio kicked in a third of the budget for “The Magic Riddle”; the FFC, making its maiden film investment, took up the remainder along with Beyond Intl., which participated via a distribution advance.
For “Blinky Bill,” YGFS’ most expensive film to date, the company issued its first public offer for investment via 10BA (previous 10BA funds were all private offers) to take up a fifth of the budget. In return, investors receive priority recoupment and a share of 55% of net profits. Alongside YGFS investment, FFC put up 65%, with Beyond supplementing via an advance against world rights (excluding Oz/N.Z.).
New breed of investor
With l0BA’s attraction diminished – it’s now seen more as a useful tax deferral method – Sandra Gross notes there’s a new kind of investor backing the studios. “The writeoffs do give some comfort given the risks, but the big difference is that investors are being attracted to what we’re doing rather than what they can achieve in terms of a tax deduction.”
“Blinky Bill’s” portfolio was spread among a lot of smaller investors, she says; it was also the only 10BA project to be fully subscribed in 1989-90.
Remarkably, YGFS has never entered into co-production to help bankroll projects. “We’ve shied away to date,” Gross explains. “You need a collaboration of talent that makes sense creatively and financially.” The company has yet to find a partner with the right balance, although a French co-prod was considered last year.
The planned “Blinky Bill” series will trigger some form of collaboration to handle the logistics. Its financial structure will include some sort of overseas presale, and YGFS is contractually obliged to offer the series to the FFC for investment.
Given the shaky state of Aussie commercial tv, a local tv sale isn’t a priority for the two films. The studios held back domestic tube rights from Village Roadshow’s recent acquisition of the two pics, but a local presale for the “Blinky Bill” series will probably be necessary, as it’s usually a prerequisite for FFC backing.