Say, one day, you checked your Bank Account, called your family office planner, and after discussion with your financial advisers you decided to invest your proceeds from your latest company’s Merger or Acquisition not into some dubious funds or start-up biotech venture, but into financing Hollywood films because you figure you need the State tax Credits, the Federal tax write-offs, as well as a nice hedge of revenues from a few movies.
Now, this might not sound too well initially with your hedge fund manager or foreign fund investor but those are the same guys who are financing Hollywood movies. And the only question for you, how do you get in the game without feeling like amateur film financier without real profits.
So having done your research, here’s what you discover may be the opportunity to further enrich your affluent lifestyle even more-

*Sergey Brin And Larry Page Of Google, Fred Smith, the CEO of Federal Express, Norman Waitt, the Co-Founder of Gateway Computers, Jeff Skoll Of Ebay, Todd Wagner (formerly of broadcast.com), Max Levchin Of PAYPAL, Marc Turtletaub of The Money Store, Roger Marino Of EMC Corp, former Chicago bulls co-owner Jim Stern, Sidney Kimmel Of Jones Apparel Group, Minnesota Twins owner Bill Pohlad; Real Estate Developers Tom Rosenberg,;  financiers Robert Sturm, Sheikh Waleed Al Ibrahim, Zeid Masri of SilverHaze Partners,Mark Esses, David Larcher, Michael Goguen, Michael Reilly, Rafael Fogel, and Philip Anschutz are just a handful of high net worth entrepreneurs who entered the motion picture finance and production business with successful results.

There are tax credit incentives that would offer a premium based on an equity position. Assuming there is a 10 million dollar budget film, where 50% of it is in equity, and 50% is through international distribution guarantees prior to release. Now assume there is a 20-25% tax credit on the entire amount of $10 million dollars, which mean $2-2.5 million tax credit to an investor.

Numerous hedge funds such as Reed, Conner & Birdwell (DISNEY), Legendary Fund (Warner Brothers), Melrose Fund (Paramount Pictures), Ingenious Media’s 700 Million dollar Float on London’s AIM, Benjamin Waisbren Investments, and a host of other funds and fund managers are entering the film finance arena.
The explosion of international DVD, pay-per-view, home video, cable, megaplex theaters, the future of multi-lingual Internet video on demand downloads, and cross-market digital distribution including low-cost theatrical digital projection, the movie industry is accelerating at an unprecedented growth rate.
*The American Jobs Creation Act of 2004, which amends the Internal Revenue Code of 1986, was signed into law. The Act creates three tax incentives applicable to motion pictures, one of which – § 181 of the Internal Revenue Code – is especially significant to independent film producers
*The filmed and other entertainment sectors are constantly outperforming and beating analyst expectations with regards to growth, and are the only industries resistant to untimely global events and adverse economic conditions.
*Movie Investor returns may be more favorable and more liquid than holding direct equity positions in most public entertainment and other public companies, real estate investments, and other alternative investments.
*There is a huge demand, audience, and growing distribution structure for specialty independent, ,crime, horror, and other low budget films as exemplified by the success of such films as “Brokeback Mountain”, “Sideways”, “Capote”, “Garden State”, “Napolean Dynamite”, “Y Tu Mama Tambien”, bringing millions to investors.

*Studio financed films were unsuccessful The films that have been successful for studios were all externally financed and or co-financed with studios, sold for 2-3 x their costs, and a majority of them retained foreign sales rights to maximize revenues.
So after looking at all the great benefits, how do you actually go about finding a deal or movie project where you are certain that half your money won’t be misused by Hollywood producers?

The key are structured finance, leverage, risk minimization, multiple exit strategies, tax credits, and the ethical consciousness of the filmmaker/producer.

Even you invest in low budget films you may do it wisely combined with tax advantages. Do this over 5-10 films and you can make a very profitable name for yourself among the Hollywood elite.

But let’s really take this a step further and see how the bigger boys leverage film investing because they can get a bigger star which can translate in larger overseas sales.

Let’s say a filmmaker/producer has a $10 million film and you want in on the action. You would park $5 million in equity, receive an 20-30% tax credit on $10 million which will be $2-$3 million, the producer will get the biggest star he can, get a studio to kick in the other $5 million dollars, your DVD profits and international sales will cover your equity position.

Now leverage this with different budgets, genres, stars, distribution, places where you can get high tax credits (Ie Puerto Rico is 40%) other strategies, and you are on your new career path as a sophisticated and educated film financier. Off course, if you want to go even further and guarantee 100% of your capital, there are tricks to that as well.

Source-  www.articlesbase.com/public-company-articles/investor-education-for-global-private-investment-funds-in-film-and-media-finance-private-equity-hedge-funds-section-181-investors-364467.htmlp