There has always been a fascination regarding the movie industry.  It can be glamorous, profitable, and act as a great tax shelter.  However, you usually don’t hear about the true Hollywood deals.  You usually hear about how investing in film is high-risk and high-reward.  And it definitely can be.  However, currently the Government and State incentives make film investing the ultimate hidden gem for accredited investors.  We’re not going to get into too many specifics here, but the point is that there are many great incentives that are currently allowing film investors to invest in projects with practically no risk and the potential of making 500%+ on their investment.  It’s currently the best investment vehicle available, but only a few companies know how to take advantage of these incentives.  Like any investment there is always risk.

There are 2 ways to invest in movies.  One is to buy stock in a large studio.  The second is to invest in an independent company to help produce a film or a slate (group) of films.  A typical scenario for a single film would be an LLC that is split - 50% to the investors who fund 100% of the budget, and 50% to the producing side to share with actors, crew, etc. The investors usually get paid their investment back before any proceeds are distributed.  The investors usually take on the title of Executive Producer.

Section 181 – 100% Tax Deductible in the first year.
Cash Rebates as high as 42%.

These are just a few things that help an independent film company structure a deal to limit investor risk.  It can get a touch more complicated, but this touches on a few basics.

If you are an accredited investor looking to invest in film, we’d be happy to chat with you about the industry and what opportunities may be available with our company or we can refer you to a company as well.