Tax effective Content opens
Content Capital, one of the two companies granted a license to raise up to $20 mil-lion in concessional capital for investments in films, has announced its first project.
Content Capital, one of the two companies granted a license to raise up to $20 mil-lion in concessional capital for investments in films, has announced its first project.
It has structured, documented and partially underwritten the Australian financing of a 26 part, $12.2 million animated series called “Old Tom”.
Executive director Greg Smith says the series will be co-produced by animation experts Yorum Gross — EM.TV and France’s Millimages.
A second project, an Australian feature film, will be announced soon, he says.
“We will cherry pick projects. We have looked at 90 projects so far and have only agreed to go with two,” he says.
Content Capital is one of two companies granted a license under the Federal Gov-ernment’s pilot Film Licensed Investment Scheme (FLIC). The other is Macquarie Film Corporation.
Content Capital, which plans to list on the ASX, offers an “investment banking” approach to film investments, which applies traditional risk management and a profit generation focus.
Up until now film investments have typically been high risk and project based, but chairman Peter Burrows says Content Capital will take them “out of the range of emu and guava funds”.
Content Capital plans to invest in a portfolio of projects. “By June 30, 2002, we expect this portfolio to include copyright and distribution interests in up to 20 di-versified projects covering film, television, animation and IMAX productions,” Burrows says.
The company also plans to liberate film investors from their traditional place at the bottom rung of the income distribution ladder where they were limited to copyright returns.
It will, instead, earn professional fees from structuring and documenting deals. And, it will capture revenue from “content”, which, director David Court says, is an emerging and fast growing asset class created by the digital information revolu-tion.
He says creators and financiers of content are expected to benefit as households and businesses connect to new communication networks, like the Internet, and as a new generation emerges which is prepared to pay for content.
In the past, tax concessions for film investments were often subject to the Austra-lian Tax Office’s product rulings. But under the FLIC license, investors who buy shares in the company before July 1 next year will receive 100 per cent tax deduc-tion, provided for by special legislation.
The investment is described as medium term one. There are no major shareholders and the minimum investment of $5000 is required.
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