More funds are becoming available for film-making but are leading to inflated budgets, according to finance experts.
“It’s a golden age for film finance,” film lawyer Lindsay Conner told delegates at the Zurich Summit on Saturday.
“This is partly because we came out of the trough of 2008-2010 when we went from 45 banks lending to only nine. We’re seeing capital available from a wide variety of places. Banks are more willing to lend and there’s no shortage of high net worth individuals willing to back films”.
“There are more and more funds out there,” continued the Entertainment and Media Practice partner. “With interest rates so low, more funds want to expose some portion of their capital to the alternative investment risk.”
However, the amount of capital is leading to inflated budgets and doesn’t guarantee good product, warned Claudia Blumhuber, CEO of financier Silver Reel Partners.
“There’s so much capital available that there are a lot of people entering the business without the requisite experience,” she said. “They will completely overpay and burn like hell. I think a lot of people will move out of this space again in two years’ time.”
Later in the day the Ubisoft Motion Pictures CEO Jean-Julien Baronnet discussed the dangers that can arise from studios adapting video games.
“Hollywood studios are looking for big IP and the core age of the gaming audience is exactly the one studios want,” he said. “But you have to respect and understand gamers’ fanaticism for the brand. You have to retain the DNA of the brand.”