If there were an Oscar for Best Film-Financing Deal, the winning transaction might look something like this:
Original equity investors are returned a multiple of their initial investment within in a prescribed time frame; mezzanine investors get all their interest and principle paid; senior debt is fully serviced—and possibly re-cycled for another favorable round of financing.
But that’s not an award likely to be given out any time soon—in part because even the non-televised portion of the Academy Awards show is already too long; in part because of the many challenges to achieving that sort of success in a Hollywood film-financing deal; and in part because of the extremely confidential nature of these industry deals.
Nevertheless, deals matching the above description have been done during this latest film-financing capital cycle, and they’ve frequently involved hedge fund managers, investment bankers, private equity fund managers and other alternative investment types. In fact, it’s these finance industry players that characterize the latest capital cycle (which dates to roughly 2004) and distinguish it from previous cycles.
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