Thierry Breton

Source: European Parliament

Thierry Breton

The European Commission will ratify the first funding accords for its €400m Media Invest equity instrument aimed at financing the post-pandemic recovery of Europe’s audio-visual industry before the end of 2022, said EU commissioner Thierry Breton at the Cannes Film Festival on Saturday. 

“The first agreements resulting from Media Invest will be signed in the second half of this year,” said EU commissioner Thierry Breton.

No decision has yet been taken by the Commission, the EU’s executive arm, on the form of the equity funds contained in the Media Invest umbrella vehicle. They will be structured in response to investor demand, a person involved in the Media Invest project said.

“You need to combine everything, savoir faire, technological competence, reintroducing dynamism into the system, virtual reality, and then pull the supply chain together. We at our end will bring the financing together to be able to do it,” said Breton. ”There is no single solution, there are many solutions.”

Examples of initiatives that could apply for funding include  bringing live events to theatres and digital technology developments such as the Cannes Film Festival’s push to capture young audiences and launch the event in the metaverse through its partnership with tech company Brut  this year. 

Private investment 

The funds contained in Media Invest will leverage both public EU investments and private ones, though the Commission is currently open to the makeup of the percentages. This, too, will be demand-driven.

No decision has yet been taken on the number of funds Media Invest will hold, though some seven to 10 funds have been discussed. These could take a variety of forms, including one large fund any many small ones, or various similarly-sized ones.

A final decision will depend on demand and the investor applications the Commission will receive, the person close to the investment project said.

The allocation of financing by the funds once operational will also be demand-driven, and will depend on project bids received, with all activities in the audio-visuals sector including film production, exhibitors and video games, being eligible.

The Commission’s representatives are actively carrying out due diligence bound by confidentiality terms with potential financial investors in the Media Invest funds. Amongst investors eligible to co-participate with the EU in the funds through cash injections are Private Equity and Venture Capital firms, the person said.

The commission is also open to the setting up of special purpose vehicles it could co-own with potential private investors including Private Equity and Venture Capital firms, in which it would consider matching each euro unit of private-sector investment with an identical EU investment amount, the person familiar said. Mezzanine funding may also be a form of investment structure rolled out as part of Media Invest, the person said.

Some of the funds that will be set up will come out of a pre-existing pipeline of projects, while others will simply allocate funding and look for new projects.

The EU will assign technical audio-visual sector experts to each fund to support financial experts and help match projects with interested investors, advising both sides during the process.

The EU already uses this form of fundraising and allocations in the space and artificial investment sectors Already in space and AI.

Media Invest was announced the San Sebastian International Film Festival in 2021.