Venture to take advantage of tax acts offering 100% write-off
SYDNEY — Two TV series and eight feature films are listed in a new fund launched Thursday by the Nine Network and the Macquarie Bank Group.The co-venture aims to raise $A62.5 million ($32.5 million) from Aussie investors by June 26 (the end of the financial year), with the coin divided equally between TV and film productions. If it’s successful, the Macquarie Nine Film and Television Investment Fund will provide Nine with three drama series (“Young Lions,” the second skein of “McLeod’s Daughters,” and a third to be decided) and one telepic, on advantageous terms because they would be fully financed by the investors. The films would be released in Australia and New Zealand by Nine’s sister firm Hoyts Distribution, and Nine would secure deals with film sales companies based in L.A. or London. The fund is unusual because it seeks to take advantage of division 10BA of the Tax Act (which applies to feature films) and division 10B (for TV series), both offering 100% write-offs over three years. Generally investors have not regarded 10BA as an attractive proposition, and 10B was widely used to bankroll international films lensed Down Under, such as “The Matrix,” until the Tax Office denied tax breaks for the Oz investors in “Moulin Rouge” and “Red Planet.” The fund is awaiting approval from the Tax Office. Nine and Macquarie aim to make their fund more appealing by guaranteeing investors a minimum return of 50%, payable in installments through June 2005. Charles Wheeler, Macquarie’s exec director of investment banking, said the scale of the fund, diversity of the projects and the combined expertise of Nine and Macquarie would provide “the upside story.” The films chosen will depend on the amount of coin raised and “what looks best at the time,” said Hugh Marks, director of Nine Films & Television. Marks made special mention of two films which enthuse him: “Angel Face,” $5.7 million romantic comedy produced by Bryan Brown and Debbie Balderstone (who are wrapping “Dirty Deeds,” the first pic from Nine Films & TV); and the $10.4 million “Fast Car,” a car chase through the Outback, with director Bill Bennett attached as producer. Among other films in the package are two from “Moulin Rouge” producer Martin Brown: “Love Smarts” toplining Portia de Rossi, directed by Steven Vidler; and “Seance,” helmed by Richard Franklin. Also included are “Gettin’ Square” from “Better than Sex” director Jonathan Teplitzky and “Firehead” from producer Tristram Miall. The 22-episode “Young Lions” is budgeted at $5.4 million and “McLeod’s Daughters” is cost $A5.6 million. Nine and Macquarie made it clear they are embarking on a “long-term strategy,” flagging there’ll be another fund next year if the first succeeds.