Film and Television Finance

  • This is because investment and deal structuring are driven by historical performance and established precedents.

    Lenders and financiers mitigate risk by rigorously examining past box office receipts, historical P&L statements from comparable projects, and the track records of key talent. The value of pre-sales and distribution guarantees is determined by the empirical, retrospective data.

    This anchor to the past data is what determines what gets made and for how much. While finance is the engine that funds the future, its discipline demands constant reflection on the past.

  • Art's historical trajectory is one of breaking with convention. Creative talent constantly strives for novelty, new stories, unique aesthetics, and thematic challenges, that anticipate and potentially set future cultural trends.

    Artists use their work as a space of possibility, a mental canvas to explore ideas that don't yet exist in the material world.

    Although great art often interprets and reflects the past, Filmmakers continuously address the unknown, explores hypothetical realities, and speculates on societal, technological, and existential futures.

  • The tension between the financier’s need for predictability (based on past data) and the Filmmaker’s need for freedom (to create future value) is the heart of Entertainment Law.

    Our role as legal counsel is to structure the deals, the term sheets, distribution agreements, and waterfall charts, that responsibly bridge this gap. We ensure that commercial requirements are met while protecting the Filmmaker’s vision that generates the project’s ultimate, future commercial potential.

Financing film and television projects is a complex process requiring the strategic combination of unique financial documents. We will explore the various financing elements essential for securing funds throughout the production lifecycle.

Equity

Equity (Private Investment)

Equity is cash investment from private sources, for example high-net-worth individuals, specialised media funds or institutional investors.

Similar to investing in a company, equity investors provide capital to the production in exchange for ownership of the intellectual property or copyright. Equity investors recoup their investment and premium from worldwide revenue and share in profits over the life of the film.

Studio/Streamer Equity

Streamers and studios acquire or commission films or television series in exchange for distribution rights in one or more territories. In many cases they cash-flow the full budget and hold long-term exploitation rights across their platforms and channels.

The goal is clear: secure finance from a studio or streamer while preserving as much upside and future optionality as the market will bear.

Loans (Debt Finance)

Senior Loan

A Senior Loan is a loan to the production that sits in first position in the recoupment waterfall. It is secured against contracted collateral such as:

  • Tax credits or rebates from an approved jurisdiction

  • Confirmed pre-sales from reputable distributors

  • Producer Offset and similar incentives

These payments often arrive on or after delivery. A Completion Bond may therefore be required so that a third-party guarantor supervises production until delivery and protects the lender.

Gap Loan

A Gap Loan is a loan against the estimated value of unsold territories. The sales agent provides estimates and the lender advances a portion of that projected value.

Gap facilities sit behind Senior and Mezzanine Loans and rely heavily on sales assumptions and market appetite.

Mezzanine Loan

A Mezzanine Loan, or Mezz Loan, usually ranks behind the Senior Loan in the recoupment waterfall. It may also be secured against a specific territory such as the United States.

Mezzanine lenders accept higher risk and therefore seek higher returns. Terms around security, pricing and participation can become complex.

Bridge Loan

A bridge loan is a short-term, high-interest facility used to cover immediate cash needs, for example:

  • Deposits for key cast

  • Pre-production costs

  • Budget shortfalls before permanent finance closes

Bridge loans are repaid from the proceeds of permanent finance, such as Senior Loans, equity closes or studio deals.

The Recoupment Schedule

AKA “The Waterfall”

Financing documents define the precise order of revenue allocation. A typical high-level sequence, after distribution fees and expenses, is:

  1. Senior Debt Repayment: repayment in full of primary bank loans, tax credit loans and associated fees and interest.

  2. Mezzanine and Gap Debt Repayment: repayment of subordinate debt and associated interest.

  3. Equity Repayment: return of principal to equity investors.

  4. Equity Premium: payment of the agreed premium on equity investments.

  5. Profit Participation: split of remaining revenues among equity holders, producers and participants with backend profit shares.

This Recoupment Schedule is provided purely for illustrative and explanatory purposes only. It should not be relied upon as legal or financial advice.

Other Elements

Night view of illuminated skyscrapers in New York City, including the Chrysler Building with its distinctive spire and Art Deco design, and a modern high-rise with blue and white lighting.

Collection Account Management Agreement

AKA “CAMA”

A Collection Account Management Agreement appoints an independent Collection Account Manager to collect and disburse worldwide revenues for the film.

The CAMA:

  • Centralises incoming revenues

  • Allocates funds according to the agreed waterfall

  • Protects parties when counterparties change or relationships shift

View of the Empire State Building in New York City, with other skyscrapers around it and a street sign reading '57th St', under a cloudy sky.

Completion Bond

AKA “Completion Guarantee”

A Completion Bond is an insurance policy for financiers. The producer purchases this policy to guarantee that the film will be completed and delivered on time and within budget.

If the production exceeds budget or encounters severe operational problems, the completion guarantor can step in to finish the film or refund financiers according to the bond terms.

A city street with tall skyscrapers on both sides, parked cars along the curb, and a few moving vehicles. The street has a bike lane marked 'ONLY BUS' and trees lining the sidewalks. The sky is partly cloudy with a warm sunset glow.

Closing the Finance

Financiers, distributors and streamers can stand ready. Sales estimates can support the finance plan. Incentive approvals can sit in place. The project still requires executed, coherent documents before money arrives in the production account.

Ancora Lawyers structures and negotiates the web of financing, security and production documents so that:

  • Conditions precedent to funding are satisfied

  • Cash is available when required by the production schedule

  • Parties understand and accept their rights and obligations

For producers and financiers seeking to close complex film and television finance, Ancora provides legal execution that turns finance plans into funded productions.

Typical Financing Structure

These percentages are representative estimates for an independent Australian production and are intended for illustration. The exact mix for any given project will vary significantly based on the total budget, the commissioning network/streamer, the level of international co-production, and the specific state/territory incentives accessed.

Australian Independent Film

Australian feature films with theatrical release often have the highest proportion of government funding, anchored by the 40% Producer Offset.

Australian TV Series

For TV drama and scripted series, the primary commissioning body (Broadcaster/Streamer) covers a larger share, and the government offset is slightly lower.

If the Money is Ready. Are the Documents?

You need to close finance.

That stack of required finance paperwork is the final gate.

If a single document is missing or flawed, the money won't drop.

    • This is the core contract between the production company and the financier(s).

    • It outlines the amount of funding, the payment schedule (cash flow), and the terms of repayment.

    • Crucially, it details the recoupment schedule or "waterfall," which determines the order in which all parties (lenders, investors, deferrals, producers) are paid back from the film's revenue.

  • The Loan Agreement details the principal, interest rate, and repayment timeline.

  • The Security Agreement grants the lender a security interest (a form of collateral) in the film's assets (like the copyright, intellectual property, and proceeds) until the loan is repaid.

    • These are contracts with a distributor committing them to buy the film for a certain price (Minimum Guarantee) upon delivery.

    • A signed pre-sale agreement acts as a form of collateral that can be used to secure bank financing.

    • Financiers will require proof of a clear "Chain of Title" to ensure the production company legally owns the rights to the underlying material (e.g., the script, book, or life story).

    • This includes the initial Option Agreement (buying the exclusive right to purchase the property for a set time) and the final Purchase Agreement (buying the rights outright).

Paperwork Solved. Production Starts.

Book a consultation with an Entertainment Lawyer Today!

Schedule