AFM: Indie Films Sharpen Competitive Edge

As the independent sector continues to navigate choppy waters, a number of savvy sales and finance outfits are leaning on film funds and credit facilities to give themselves a competitive edge.

Back in May, Glen Basner’s FilmNation Entertainment secured $50 million in additional capital from Bank of America Merrill Lynch and Union Bank for an equity-backed, part debt, revolving credit facility.

The same month, the Solution Group joined forces with Siren Studios to raise a $50 million revolving equity film fund to finance six to 10 movies a year.

“We had been trying to find ways to grow our business and we needed access to equity to do that,” says Basner, whose company’s longstanding relationship with a number of individuals at both banks, many of whom had overseen a raft of single picture deals with FilmNation, helped spur on the deal.

The first film to use capacity on the debt side is David Michod’s “The Rover,” toplining Guy Pearce and Robert Pattinson. The company is putting together the first three productions that will benefit from the equity.

The Solution Group’s Myles Nestel says its revolving equity fund has given an advantage when it comes to optioning and securing material. When we started the company we always had the goal to access capital. “A bunch of films we’re announcing for AFM will be ones we will be using our equity resources for.”

Already the company has greenlit Keira Knightley and Chloe Grace Moretz starrer “Laggies” through the fund using a mix of equity and debt.

The goal, says Nestel, is to leverage as much as possible for pics with debt and utilize the equity as efficiently as possible. “It’s really just looking at each individual film and seeing where the capital is best placed.”

U.K.-based film financier Prescience is expert in the fund biz. “The King’s Speech” backer offers everything from start to finish, including providing equity, gap, cash-flow tax-credits and presales via its sales banner Metro Intl., and even provides strategic short-term loans to facilitate pre-production.

The outfit, which recently backed pics such as “Last Days on Mars,” “Better Living Through Chemistry” and Nina Simone biopic “Nina,” will soon announce its first P&A deals in the U.K. and U.S.

Prescience CEO Tim Smith says, “There is a greater understanding of the business of film by investors and greater realism on the part of filmmakers about budgets. In addition, the studios have effectively left the playing field to concentrate on pricier and riskier tentpoles.”

Altitude Film Entertainment, which launched last year, considered raising a tax-based production and acquisition fund but instead has chosen to fund films on a project-by-project basis. The company, in addition to shareholder funding, has raised a working capital bank facility.

The company’s Andy Mayson says: “There are equity investors out there, but it’s imperative their needs and expectations are matched to the producers.”

(Pictured: “The Rover” is the first FilmNation pic to use its new capital.)

Popular on Variety

More Biz

  • Hopper Reserve

    Dennis Hopper's Dying Wish: His Own Strain of Marijuana

    Even as celebrity brands are starting to flood the emerging Cannabis market, Hopper Reserve stands out. The brand was launched by Marin Hopper, Dennis Hopper’s daughter from his marriage to Brooke Hayward. Hopper Reserve is a gram of California indoor-grown flower, two packs of rolling papers, a pair of matches and a trading card either [...]

  • Snoop Dogg Weed

    In the Cannabis Business, Not All Star Strains Are Created Equal

    With the cannabis green rush in full swing, many celebrities are jumping into the fray with their own brands, including such well-known stoners as Willie Nelson, Snoop Dogg and Tommy Chong. But as it turns out, not all star strains are created equal, so we assembled a trio of crack experts to put the product [...]

  • Richard Branson Jason Felts

    Kaaboo Festival Acquired by Virgin Fest Owner Jason Felts

    Kaaboo, which says it has “shifted the music festival paradigm by offering a highly amenitized festival experience for adults,” is now under new ownership. Virgin Fest founder and CEO Jason Felts (pictured above with Virgin founder Richard Branson) has fully acquired all of the festival brand assets through an affiliate of Virgin Fest, the music [...]

  • Live Nation Chief Michael Rapino Talks

    Live Nation-Ticketmaster Chief Michael Rapino Talks Dept. of Justice Inquiries

    Back in August, Senators Richard Blumenthal of New Jersey and Amy Klobuchar of Minnesota made the most recent of several requests for an Department of Justice antitrust investigation into competition in the ticketing industry, and it soon became clear that the target of the probe was Live Nation and its 2010 merger with Ticketmaster, which [...]

  • Lowell Smokes Cafe Marijuana

    With Cannabis Lounges, On-Site Consumption, Marijuana-Infused Meals Go Legit

    Can this century’s Roaring ’20s repeat history but with pre-rolled joints instead of whiskey flasks and soccer moms as the new flappers? This month, West Hollywood will see the opening of the nation’s first at least quasi-legal cannabis consumption lounge, officially dubbed Lowell Farms: A Cannabis Café, located at 1211 N. La Brea between Fountain [...]

  • 2020 TV Season Preview

    How 2020's Fall TV Season Is Already Shaping Up

    Aiming to stand out in a crowded field, broadcasters this season have leaned on the stability of their schedules and the return of established hits. But for many of the same reasons, they’ve also begun to seed the ground for next year’s crop of shows, considering that top performers like “How to Get Away With [...]

  • Taylor Swift Talks Scott Borchetta’s ‘Sneaky’

    Taylor Swift Talks Scott Borchetta's 'Betrayal,' 'Sneaky' Deal With Scooter Braun

    While Taylor Swift’s sprawling Rolling Stone cover interview is largely about her music and herself, there’s also plenty about the personal and business dramas of the last three years. And not surprisingly, Scooter Braun and Scott Borchetta — who this summer inked a reported $300 million deal for the Big Machine Records catalog and with [...]

More From Our Brands

Access exclusive content