Funding blockbuster cinema is risky business. But Village Roadshow co-founder Greg Basser thinks he’s found a way to fund Australian-made productions without material exposure to the ups and downs of the box office.
The industry veteran is teaming up with ex-Miramax executive Bob Osher and the former BNP Parbis head of media and entertainment, David Burdge, to launch the Australian Entertainment Partners Screen Fund.
AEP co-founder, managing director and executive producer Greg Basser. Justin McManus
The fund, distributed by Damien McIntyre’s GSFM, will invest in Australian-made projects with a global audience. Think Netflix’s influencers docu-soap Byron Baes or Nicole Kidman’s Nine Perfect Strangers, based in California but shot in northern NSW.
Rather than taking an equity stake or giving a loan to the producers, AEP will work directly with streaming platforms and studios to finance projects. For example, Amazon comes along with a series it wants to produce locally. AEP can finance that project, at an agreed price, and be paid the price plus a premium (typically low teens and up to 35 per cent) at completion, less government rebates and incentives.
As for pitching home-grown productions to the global studios, Basser says he is working with select local producers. While at Village, Basser built a name for himself in the local industry financing films like the Matrix trilogy, Happy Feet and Mad Max Fury Road.
If you ask Basser, financing these projects is low-risk because they require the costs of the projects to be covered by a studio or streaming platform contract before the production commences, and for the government to kick in via incentives.
Still, the new fund is unlike much else in the market and, in the past, investor appetite to back local productions has been limited. Naturally, it would help boost confidence if the backers were willing to invest their own capital in the fund, but Basser confirmed this was not the case.
The risks include studios cutting back on production budgets and if filming goes off track and the project remains half-finished.
“Our rules don’t allow us to start a project unless it’s in profit to us on day one because we have to have a contract from a studio or streamer that will buy the completed project for a premium over the net cost of making the project,” Basser told Street Talk.
The AEP Screen Fund is seeking up to $100 million of equity from institutional investors and family offices, coupled with a bank facility of up to $500 million, against a management fee of 2 per cent.
It’s a seven-year fund – five years with a two-year wind-down – with a target return of 15 to 20 per cent.
COVID-bump
Basser says a combination of content-hungry streaming platforms and COVID-19 shutting down productions across the world changed the game for the Australian entertainment industry with a big open for business sign out front.
“People were always daunted by getting on a plane for 14 or even 21 hours, so they wouldn’t,” he said.
“What COVID did was it brought people out, it brought production to Australia that had never been there before, it significantly increased the size of our industry and the studios got to know how easy it is to make high-quality productions in Australia.”
Lights, camera, action! Village veteran raising to bankroll local film - The Australian Financial Review
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