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Home Communications

Know your rights in Media Law: Funding

by The Media Reporter
February 1, 2011
in Communications
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Question

Sean Joubert: I wish to find funding for my feature film to be shot in South Africa. Where can I start looking?

Answer

Anton Alberts: Sean, you pose a rather difficult question as this is the main reason we have so few South African films made. However, there are a few avenues one can pursue to get at least partial funding. Take heed that finding the money is as much an art in itself as producing the film.

You have to think creatively and will often have to combine various funding resources to get to the ultimate goal of full funding.

Funding can come from both the public sector (state or government agencies) and the private sector. This month we will deal with the private sector funding, while next month we will discuss the public funding opportunities and thereafter, co-production opportunities. The following is a list of resources from the private sector:

• Local and international competitions or film festival funds: Most of the funds that will support either a feature project or screenplay development are to be found overseas. However, South Africans are eligible to apply to many of them. Contact the National Film and Video Foundation for a list of funds that have supported South Africans in the past. For a very up-to-date list of worldwide film festivals and funding opportunities, visit the website of the well-known Los Angeles-based entertainment attorney, Mark Litwak, at www.marklitwak.com.

• Private funds: This means your rich uncle or relative, friend or any wealthy person who might wish to see their name in lights. For some reason dentists in the US and Australia like to invest in independent films.

• Loans: Normally from banks – however, banks will not loan funds until they have certain guarantees, like personal surety.

• Pre-sales: You can license the film to broadcasters and other exhibition specialists before the film has commenced production or during production. Within South Africa you can approach the broadcasters and the well-known film distributors and exhibitors.

• Distribution finance: If your project seems viable enough, a distributor could sign the film for distribution before you have it in the can. In this case, many distributors pay a minimum guarantee advance which you can apply as production funding.

• Sponsorships: Certain manufacturers or service providers may get good publicity from sponsoring your project, depending on the subject matter.

• Placement advertising: A close cousin of sponsorship, this funding method is performed by strategically placing products in the film in exchange for funding or products and services necessary to complete the film project.

• Private subscription of shares or points: You can fund the project by issuing shares in the private company that will own the film or by selling “points” in the film itself, which essentially constitutes a contractual right to share in the profits, to selected individuals.

• Public subscription of shares: This method of funding is similar to the private placement method, except that in this case one invites the public at large to take up shares. In this case you will have to comply with various onerous prescriptions of the Companies Act. This is not a preferred method of funding as you are left to the vagaries of the greater market and could find that your formal costs in terms of the Companies Act exceed the take-up of shares. As you start to investigate the various options, you will probably realise that you will need to combine the sources to get to what you need, and sometimes this is not even enough. This part of the movie business is a very hard one.

Advocate Anton Alberts runs a certificate course in Entertainment Law at the University of Johannesburg. This is the only course of its kind in South Africa. For more information, contact anton.alberts@shaw.ca or Ms Corrie Hasse at UJ on (011) 559-3201; href=”mailto:chasse@uj.ac.za” mce_href=”mailto:chasse@uj.ac.za”chasse@uj.ac.za.

■ This column first appeared in The Media magazine.

The Media Reporter

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