Media Super’s investments in Australian film and television productions via its revolving loan fund has passed $100 million, returning 6.8 per cent per annum.
Lion, a feature film starring Nicole Kidman and Dev Patel, is the latest production to premier with the help of production stage capital provided by Media Super.
Last year the $5 billion industry super fund for journalists and the creative community doubled the value of assets managed by Fulcrum Media Finance from $30 million to $60 million. The revolving nature of the financing structure used by the manager means that more than $100 million has been provided as cash flow funding to Australian feature films and television programs.
Fulcrum Media Finance loans much needed cash in the production phase, which is then paid back from a tax rebate that the film company can claim from the Australian Tax Office once production is finished. Interest is paid on the money lent to producers, which provides the return for Media Super.
Media Super chief executive Graeme Russell told Investment Magazine this structure allowed the industry super fund to support a sector many of its members work in, while still being prudentially conservative with their retirement savings.
“Every one of our 70 projects has been completed and our investment repaid, with interest. Our members have earned 6.8 per cent per annum from this investment since we started in 2010, a sound return for a low risk investment,” Russell said.
Back in 2007, the Federal Government introduced a tax rebate scheme for film and television. Approved projects are able to claim a tax rebate on completion of the project, which is 40 per cent for films and 20 per cent for TV.
The amount of financing Media Super provides through Fulcrum to a project is close to, but not 100 per cent, of the full level of the rebate, Russell added.
As the financing structure is based on the government rebate, not box office sales, the risk to the fund is low. The super fund also has an insurance arrangement with another provider to hedge against the risk of the rebate not being claimable if production does not complete if, for example, a lead actor dies during filming.
Fulcrum Media Finance is a private lender owned by Sea-Saw Films. It also sources capital from wealthy individuals and families. Decisions on which projects to support are made by Fulcrum Media Finance, with no active involvement from Media Super. The investment for the fund is based on returns, and Media Super does not make any creative decisions.
“That independence underpins the whole investment framework,” Russell said.
He added that the fund was extremely proud to have supported more than 70 Australian film and television projects, producing stable investment returns as well as work opportunities for members.
“The cultural sector makes a significant contribution to the Australian economy, more than many would realise, and Media Super is pleased to be making such a substantial investment in its growth and success.”
Other Australian feature films Media Super has financed include: The Dressmaker, The Hunter, The Daughter, Holding the Man, The Railway Man, Last Cab to Darwin, The Rover, Drift, and The Turning.
Australian television programs to receive funding from Media Super via its relationship with Fulcrum Media Finance include: The Gods of Wheat Street, Cleverman, Miss Fisher’s Murder Mysteries, The Secret River, Rake (Season 4), and Upper Middle Bogan (Season 3).
Producer of Lion, Emile Sherman, said Media Super’s commitment to the Australian film industry was to be applauded.
“The support that the fund has given to Australian film producers over the last six years, and which it continues to give, through its partnership with Fulcrum Media Finance, has made a significant impact on the industry and its growth.”
Lion releases in Australia January 19, 2017, and is already up for six international film citric awards. It is also collaborating with charities that are working to protect and support some of the 80,000 children that go missing in India each year.