BNP Paribas’ new film reaffirms its engagement towards society and its clients
The period we are experiencing, and its impacts around the world, are unique in their scale,...
The production of a feature film represents a huge budget. To balance it, producers bring together many stakeholders, who contribute a share of the financing. Among these stakeholders, banks play a key role in several capacities – loans, aid... and marketing of SOFICA funds, which allow you to participate in financing a cinematographic work!
Film producers have an essential mission: to put together the financing plan. They will therefore search for funds and aid. The overall budget of a film therefore consists of multiple contributions:
Advertising, through product placement, also represents a growing share of funding. The principle: an advertiser pays to have its product visible on the screen (watch on the hero’s wrist, drink consumed by the hero, car driven by the hero, etc.). The advertiser’s participation can be financial or material (for example, loans of vehicles in exchange for promoting the brand).
The banking world is involved in several ways in financing a film project:
The involvement of banks is therefore not only important, but also highly variable, due to the risk presented by the film industry, which can be compared with an “industry of prototypes”: each production is a new bet, and there are no assets to secure the loan.
Not all banks accept this risk. Those that decide to finance audiovisual productions set loan conditions according to objective criteria: investors who are present, producers who are involved, and the presence of a known director and “bankable” actors.
To facilitate access to bank financing for films, the IFCIC (French institute for the financing of cinema and the cultural industries) was created. The IFCIC, 49% held by the government, assumes the role as mediator and offers banks a financial guarantee in case the project fails.
While some banks are reluctant to become involved with audiovisual productions, others consider supporting film to be a long-standing commitment. This is the case for the BNP Paribas group, which has a long and close relationship with the 7th art: financial support through participation in a company specialising in film financing, partnerships with festivals and iconic cinemas, or financing of old film restoration.
In France, the teams of the Image and Media Centre also follow independent players, like the more structured groups. They support all the links in the chain: producers, broadcasters, distributor, etc.
One in two films is directly or indirectly financed by BNP Paribas. Each project is unique and requires an appropriate solution. Valerian, the largest European film ever produced, is an excellent example. The new film by Luc Besson required an innovative solution, through equity participation supported by a dedicated structure within the Group. BNP Paribas is involved across the entire value chain, from camera financing to production or studio financing.
Within the Group, no fewer than 60 experts are dedicated to film financing across Europe.
BNP Paribas & The Cinema : A 100 year Partnership
With SOFICA funds (companies for the financing of the film and audiovisual industry), created in 1985, the film industry receives a boost:
Result: SOFICA funds finance approximately 3 per cent of audiovisual production in France.
The operation of SOFICA funds is heavily regulated:
By buying SOFICA units, individuals are eligible for a tax reduction of 30% of the invested amount, up to 25% of the total net income and 18,000 euros. This means a maximum tax reduction of 5,400 euros, as long as they hold their units for 5 years. This tax incentive is increased to 36% (up to a maximum of 6,480 euros) if the SOFICA invests 10 per cent of the funds, starting from the first year, in the capital of production companies.
Keep in mind, though, that investing in film represents a significant risk and must be considered within the framework of a global diversification of the asset portfolio and not only for the associated tax exemption. However, for film fans, this is an opportunity to combine investment and involvement in their passion!
Today, individuals have another way to contribute to the financing of film production: dedicated crowdfunding platforms. This crowdfunding turns you into a “co-producer” (of a short or feature film, documentary, animation film, etc.) of a project that you choose according to your affinities. Note that this type of funding is not comparable to a SOFICA! In France, it is most often a donation that you make to support a project that interests you. In return, you sometimes receive gifts: goodies, advance screening of the film, invitation to the set, your name in the credits, etc.
Crowd-investment, which involves a subsequent financial return, is not common in France in the audiovisual world.