Invest in the future of film and TV · the UK media sector Source: BFI statistical yearbook UK film...

Invest in the future

of film and TV

The Silver Lining Screen Fund

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.

the mediaindustry

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.“ “

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

“ “

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?

ourexperience

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.

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.

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

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

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

ourprojects

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.

Most of our TV series & film productions you may be less familiar with…

THE LAST WITNESS K9


Most of our TV series & film productions you may be less familiar with…

THE HIVE TIME TRAVELLER


A few of the brandswe’ve worked with:

Structuring deals to protect capital

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

fundingmodels

investorfund structure

Fund Investment

£100

EIS Film or TV Company (100%)

EIS 1

3. Retained Rights

30% EIS

Tax Relief


Fund Investment

£100


EIS 1Upside potential from

retained rights in

Worldwide

3. Retained Rights

30% EIS

Tax Relief


Fund Investment

£100


EIS 1

Production Expenditure £100

TV Programme or

Film

Upside potential from

retained rights in

Worldwide

3. Retained Rights

30% EIS

Tax Relief


Fund Investment

£100


EIS 1


TV ProgrammeUpside potential from

retained rights in

Worldwide

30% EIS

Tax Relief

75% minimumContracted Income

£75-£85


1. Broadcasters licence fees

2. Distributors, presales

3. Government Incentives

Fund Investment

£100


EIS 1



retained rights in

Worldwide

30% EIS

Tax Relief


£75-£85

+ 4. Completed Film/tv series

Additional sales





Fund Investment

£100


EIS 1



retained rights in

Worldwide

30% EIS

Tax Relief


£75-£85


Additional sales

International sales


worldwide sales





Fund Investment

£100


EIS 1



retained rights in

Worldwide

30% EIS

Tax Relief


£75-£85


Additional sales

International sales


worldwide sales


worldwide additional

sales

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”

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

what ifscenarios

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

investorreturns

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%

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

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

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?

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

www.creative-media-investments.com

Invest in the future of film and TV · the UK media sector Source: BFI statistical yearbook UK film...

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Transcript of Invest in the future of film and TV · the UK media sector Source: BFI statistical yearbook UK film...