invest in the future of film and tv · the uk media sector source: bfi statistical yearbook uk film...
TRANSCRIPT
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Invest in the future
of film and TV
The Silver Lining Screen Fund
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IMPORTANT INFORMATION
This presentation (“Presentation”) constitutes a financial promotion in respect of investments opportunities in
companies presented by Creative Media Investments (each a “Company”) pursuant to Section 21 of the Financial
Services and Markets Act 2000 (“FSMA”) and is issued by Palace Ventures Limited (PVL), Suite 211, 2 Lansdowne
Row, London W1J 6HL, which is authorised and regulated by the UK Financial Conduct Authority. PVL is unable to
give investment or taxation advice or to advise on the suitability and appropriateness of the potential investment. If
you are in any doubt about the content of this Presentation and/or any action you should take, you are strongly
recommended to seek advice immediately from an independent financial adviser authorised under FSMA who
specialises in advising on investment opportunities of this type. PVL has taken all reasonable care to ensure that the
facts stated in this Presentation are true and accurate in all material respects and that there are no material facts in
respect of which omission would make any statement, fact or opinion herein misleading. No person has been
authorised to give any information or to make any representation concerning any Company other than the information
contained in this Presentation or in connection with any material or information referred to in it and, if given or made,
such information or representation must not be relied upon. This Presentation does not constitute an offer to sell or a
solicitation of an offer to purchase securities and, in particular, does not constitute an offering in any state, country or
other jurisdiction where, or to any person or entity to which an offer or sale would be prohibited.
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the mediaindustry
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the UKmedia sector
Source: BFI statistical yearbook UK film market 2015-2016
Last year, the TV & film sector
generated £6 billion
of revenue in the UK.“ “
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The UK is estimated to have over
150* different TV channels that schedule
drama series or movies*excludes sport/news/foreign language/religious
These are all looking for new content
every year.
There were over 6500* unique film titles on television last year.
* BFI Research and Statistics Nov 2015
The market is growing and demand is continuous.
the UKmarket size
We are investing considerably
in UK content and that is growing
yearly.
Director of Public Affairs, BSkyB
“ “
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Demand for TV/film content had never been higher
Well supported by the UK and other governments through tax relief
Product concentrated on capital preservation
A last in/first out banking style transaction for EIS creating a lower risk
proposition for investors
Average return of 105% in low case and 135% in high case (meaning
£1.05 on a net cost of 70p)
Ease of exit - target life of in 3 - 4 years, all money returns to cash, no
need for a trade/PE style sale for investors wishing to exit.
A high quality management team supporting the whole process
why invest?
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ourexperience
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we have considerable experience:
Financial expertise
Managed more than £300 million in film and TV deals
Each film goes through strict due diligence process
Experienced chartered accountancy and financial controller involved in
each stage
Partnered with Pacific Mercantile Bank, one of the biggest banks in the
media funding sector
Over 60 productions made of which at least 95% of the productions
have returned at least 100% the commercial investment to investors.
* Of the other 5%, investors were returned about 80% of their investment.
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we have considerable experience:
Entrepreneurial expertise
combined experience of at least 100 years in identifying
media opportunities and creating strong business relations
across various media companies.
experience in building companies for profit and capital
growth across a range of industries with a focus on media
Wide international experience in film and television
production and distribution.
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who have considerable experience: differentiator
Film production expertise
Top level management team includes a production team with
combined 50+ years hands-on experience
Hands on production of over 60 films in at least 10 different
countries.
Established relationships with biggest sales agents worldwide
100% of films delivered on time and on budget
NOTE: A producer is the financial and logistics manager
A director is the on-set creative leader
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whowe are… management-legal-finance
CEO Big Worldwide
Big Worldwide has 20
years of media experience
with 80 staff and a strong
reputation in the market
Bought and sold KISS FM
Peter Gould Employed Barrister
Facilitated £50M worth of
ITV contracts
Mark Hurry Managing partner of
Silver Levene, top 50
accountancy firm
Advisor to successful film
and tv production
companies
Howard Levene
Add Matthew
25 years of media
experience
Co founder of Palace
Ventures, FCA regulated
corporate financier
Matthew Barnes
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whowe are… production, distribution, deal-flow
• Former Head of Production
at Sony Music
• Secured $25M for TNT, Fox
Television Studios and
Winter Films projects
Steve Hodges Chartered accountant and
experienced entertainment
financial controller
Produced over 30 films
including Moon and The
King’s Speech
Deepak Sikka Division Manager of
Pacific Mercantile Bank
Pacific Mercantile Bank
is one of the biggest
banks in the media
funding sector
Adrian Ward Director SLIM Aristos Films
Produced over 40 films
including: Disney’s The Hive,
Time Traveller, Last Witness,
Treasure Island Kids and
Beauty and the Beast
Grant Bradley
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ourprojects
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projectsyou may have heard of...
THE KING’S SPEECH MOON
95% of our projects to date have returned at least 100% of investors capital. We are not relying on a ‘hit’ for success.
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Most of our TV series & film productions you may be less familiar with…
THE LAST WITNESS K9
95% of our projects to date have returned at least 100% of investors capital. We are not relying on a ‘hit’ for success.
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Most of our TV series & film productions you may be less familiar with…
THE HIVE TIME TRAVELLER
95% of our projects to date have returned at least 100% of investors capital. We are not relying on a ‘hit’ for success.
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A few of the brandswe’ve worked with:
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Structuring deals to protect capital
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Fundamentals on deal structure:
EIS funds are used to fund the production of projects
Approximately 75%-85% of EIS investment will be supported by contractual
revenues pre- production from
- advanced licensing
- pre-approved government tax incentives schemes (UK it’s 25% -
other countries can be 20 - 40% and more).
The residual 15% - 25% of the investment will be at higher risk
- post production sales to other territories and distribution channels
- Use strict evaluation of likely sales calculated using a valuation
standard used by banks specializing in the entertainment business
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fundingmodels
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investorfund structure
Fund Investment
£100
EIS Film or TV Company (100%)
EIS 1
3. Retained Rights
30% EIS
Tax Relief
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investorfund structure
Fund Investment
£100
EIS Film or TV Company (100%)
EIS 1Upside potential from
retained rights in
Worldwide
3. Retained Rights
30% EIS
Tax Relief
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investorfund structure
Fund Investment
£100
EIS Film or TV Company (100%)
EIS 1
Production Expenditure £100
TV Programme or
Film
Upside potential from
retained rights in
Worldwide
3. Retained Rights
30% EIS
Tax Relief
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investorfund structure
Fund Investment
£100
EIS Film or TV Company (100%)
EIS 1
Production Expenditure £100
TV ProgrammeUpside potential from
retained rights in
Worldwide
30% EIS
Tax Relief
75% minimumContracted Income
£75-£85
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investorfund structure
1. Broadcasters licence fees
2. Distributors, presales
3. Government Incentives
Fund Investment
£100
EIS Film or TV Company (100%)
EIS 1
Production Expenditure £100
TV ProgrammeUpside potential from
retained rights in
Worldwide
30% EIS
Tax Relief
75% minimumContracted Income
£75-£85
+ 4. Completed Film/tv series
Additional sales
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investorfund structure
1. Broadcasters licence fees
2. Distributors, presales
3. Government Incentives
Fund Investment
£100
EIS Film or TV Company (100%)
EIS 1
Production Expenditure £100
TV ProgrammeUpside potential from
retained rights in
Worldwide
30% EIS
Tax Relief
75% minimumContracted Income
£75-£85
+ 4. Completed Film/tv series
Additional sales
International sales
Upside potential from
worldwide sales
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investorfund structure
1. Broadcasters licence fees
2. Distributors, presales
3. Government Incentives
Fund Investment
£100
EIS Film or TV Company (100%)
EIS 1
Production Expenditure £100
TV ProgrammeUpside potential from
retained rights in
Worldwide
30% EIS
Tax Relief
75% minimumContracted Income
£75-£85
+ 4. Completed Film/tv series
Additional sales
International sales
Upside potential from
worldwide sales
Upside potential from
worldwide additional
sales
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Equity40%
Tax Credit25%
Pre-sales20%
Additional Funding15%
fundingmodel
Silver Lining Screen
Fund model
“First in -
Last out”
High
Risk
EquityThe EIS will adopt
the bank model:
“last in, first out”
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how we coveryour risk
security CMI owns the TV series or film – No bank or film financier own
the rights like us they just have a charge over the asset
protection 75%-80% of capital is protected by advance sales and/or
government tax credits/subsidies
control CMI controls the entire process from fund raising, through
production and distribution
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what ifscenarios
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what if…
Film is over budget? a completion bond will pay the cost of any overages. For lower budget projects,
CMI will be able to step in and take control of the production
over 60 films and tv series produced; 100% have delivered on time and on budget
Our team has full control over the production process
Counter party risk? CMI own the rights of each production
Credit risk? Collection agent in place
Foreign exchange shift? Foreign exchange contracts
Accident or mishap? Key man insurance
all the necessary production insurance cover
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investorreturns
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investorreturns
Note
To achieve low case means to receive our money back (recoup on presales, tax credits additional sales + producer fees)
Low Case
(£)
Target
Case (£)
Better
Case (£)
Cost of Investment 100,000 100,000 100,000
Less 30% Tax Relief (30,000) (30,000) (30,000)
Net Cost of Investment 70,000 70,000 70,000
Investment Proceeds from Trading 105,120 127,026 139,824
Total Return Multiple on Net Cash 150% 181% 200%
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Charges for Investors
Comparable fees to one competitor / much cheaper than the other
Initial Fee – 1.25%
Compliance and Management fee – 0.5%pa
Monitoring Fee – 1%pa
Custodian Fee – 0.35% pa
Performance Fee – 20% charged on realised cash amounts
above 110% returned
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Fee facilitation for advisors
A fee agreed with the Investor may be facilitated by the fund
Any intermediary fees will NOT form part of the subscription invested in
the EIS companies
Facilitated fees will NOT be entitled to any EIS relief
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in summary
Ever increasing demand for quality small screen content
UK Government tax relief
Supports the media industry in the UK
Ability for contractual presales and tax reliefs to reduce risk
Why TV & film?
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Why the Silver Lining Screen Fund
High degree of capital security (75% - 85% contractually secured). If the show happens to become a hit, the upside is unlimited
CMI personnel have a track record in these type of transactions spanning over 50 years
Ease of exit – target exit of 3 – 4 years
Competitive charging structure
Strategic partnership with one of the largest entertainment banks in the world (Pacific Mercantile Bank)
Rights ownership of the TV film or Series
Considerable production experience gives us much more control over the process
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www.creative-media-investments.com