South Africa's Coronation Capital and Irish production company Little Bird are to set up a financial services company that will structure and raise finance for international film producers.
The two companies recently signed an agreement to produce a feature documentary on the legendary 1950s music of Sophiatown which will be produced by Little Bird's James Mitchell and directed by Pascale Lamche.
The partners have approached South Africa's Industrial Development Corporation (IDC) for financial support. The funding, which was structured by Coronation, comes from pre-sales to UK, French and Danish broadcasters and is budgeted at $605,000 (R6m), half of which will be spent in South Africa. Little Bird will contribute $76,000 (R750 000) of this, while the IDC will also contribute a portion. The Sophiatown documentary has already been sold to the BBC and to French and Danish broadcasters France 2 and TV2, respectively. Negotiations are under way with German and Scandinavia broadcasters.
Coronation Holdings is a diversified financial services company encompassing a range of businesses within the financial services arena. The company is listed on the JSE and is included in the top 40 companies in South Africa. Barely seven years old it has captured 10% of South Africa's discretionary savings market and 80% of their funds outperforming their chosen benchmarks.
Coronation Capital's film interest would have two components, offshore and local, said Rob Lowdon, a director at Coronation Capital. He says that offshore, Coronation was looking to establish a joint venture with Little Bird to set up a financial services company that would structure and raise finance for international film producers. Coronation and Little Bird previously collaborated on the Werner Herzog feature Invincible, starring Tim Roth. Little Bird has set up a South African operation and through a development fund will finance productions filmed locally for international distribution. The collaboration was inevitable as Coronation already have an offshore presence in Dublin, where Little Bird is based.
"We are trying to attract foreign film and television productions to South Africa because production costs are so cheap relative to international production costs,' said Lowdon.
Coronation has been structuring and investing in films on a very modest basis over the last 5 years and is one of the few financial services companies in South Africa willing to go into a risky area which burnt so many operators during the tax-boom of the 1980s. "Tax always comes into the equation when investing in film," says Lowdon, "Equity capital for any project in SA is always a scarce resource and when it comes to film it is even more so the case. The IDC has created a new division focusing on media, which is welcome and have indeed invested in 2 or 3 films to date. We have been working on developing an investor base to invest in films in SA and we therefore have a very good relationship with the team at the IDC. We are currently working on proposals to attract capital to film projects in SA - this is critical."
Coronation has the view that film could become a high growth sector in SA and have positioned themselves accordingly. Coronation has a 28% equity stake in the SA based facilities company Sasani, which is listed on the JSE. "SA should be a unique destination for international film makers, provided we can perform and provide the service required. SA has some great advantages, including relatively low cost base, weather, locations, time zone, etc. SA is already a major destination for commercials, we hope this can happen for long-form too," says Lowdon
Other South African film projects in the pipeline are The Trial Of Nelson Mandela, about the Rivonia trials, and Valley Song, based on an Athol Fugard play to be directed by Harry Hook.
"There are extraordinary stories and locations in South Africa,' says Little Bird's James Mitchell, "But there is a lack of expertise in how to market these film products internationally. There are huge opportunities for European producers. Production costs are significantly cheaper and there is first-class infrastructure. 'South African is one of the best kept secrets in the film industry,"