Film Production Financial Model (Excel XLSX)

Film production is the process by which a motion picture is produced. Film production involves a number of complex and discrete stages, starting with an initial story or idea. It then continues through screenwriting, casting, pre-production, shooting, sound recording, post-production, and screening the finished product before an audience that may result in a film release and an exhibition. Film productions occurs in a variety of economic, social, and political contexts around the world. It uses a variety of technologies and cinematic techniques.

Film production consists of five major stages:

•  Development: Ideas for the film are created, rights to existing intellectual properties are purchased, etc., and the screenplay is written. Financing for the project is sought and obtained.
•  Pre-production: Arrangements and preparations are made for the shoot, such as hiring cast and film crew, selecting locations and constructing sets.
•  Production: The raw footage and other elements of the film are recorded during the film shoot, including principal photography.
•  Post-production: The images, sound, and visual effects of the recorded film are edited and combined into a finished product.
•  Distribution: The completed film is distributed, marketed, and screened in cinemas and/or released to home video to be viewed.

This Financial Model presents a Film Production scenario, enabling users to get a solid understanding of the financial feasibility of a Film Production Project and to evaluate the return to Private Investors.
The model analyzes cash flows stages of the project, starting with the production budget and ending up to the Investor returns and profit for the production company.

Model Structure:

Main Assumptions:
•  General Project Assumptions incl. Distribution Fees, Distribution Overheads, Printing & Advertising Costs and Sale Agents Commissions & Expenses.
•  Film Financing through Debt & Equity (Private Investors Contributions)
•  Investors Participation Repayment and Preferred Returns
•  Profit Share Assumptions (Investors' and Producer's Pool)

Production Budget:
Budget is split in 4 main categories (Above the Line, Production, Post-Production and Other Expenses, each including several sub-categories.
A contingency and Other Fees % assumption is also included in the Production Budget calculation.
The total amount of the Production Cost, is the basis to calculate Investors Equity Contributions (based on Equity Financing %)

Films Comparable Analysis:
In order to provide realistic analysis for the project, the model looks at comparable films releases in the recent years.
While one cannot be sure of the performance of a movie before it is made, the model looks at what other movies with similar budgets, genres, and casts have made recently to get a sense of what a representative movie of this type might make, assuming it is professionally made and marketed and gets picked up by one of the producer's targeted distributors.
The models includes data of how much these movies made at the Box Office, in Home Entertainment, Television and VOD Market and through other ancillary income (Licensing, Merchandising, In-Flight entertainment, etc.). In order to avoid skewing data because of outliers that performed particularly well or badly, the model uses the median figures from the comps in the analysis adjusted with a % projection assumption to calculate revenue from the 5 different sources.

Domestic & International Distribution Analysis:
The Model calculates the potential revenue to the Production Company, based on the performance of comparable films Domestically & Internationally, assuming the distributor charges a % distribution fee and deducts relevant expenses before making payments to the production company.
The analysis provides a Base, Downside and Upside Scenario, enabling uses to check the profitability of the Film Production under three different cases.

Investors Summary:
The model calculates first the Net Revenue of the Production Company after deducting Sales Agent and Debt Service Cost.
Net Revenue is used from the Production Company to repay Investors' Initial Investments and Preferred Returns and the remaining available funds are distributed to Profit Share Beneficiaries according to the Profit Share % set by the user in the Main Assumptions tab.

Distribution (Recoupment) Waterfall Chart:
The way a film's income is collected and distributed is known as the Recoupment Waterfall.  
Income comes in from a variety of sources and the money is then handed back to the filmmakers via a number of third parties.  
Along the way, these third parties can recoup the money they spent up front promoting the film and also charge a pre-agreed fee for their work.  
What's left after a party has repaid costs and kept their fees will be passed down the chain to the next party.
The final part of the waterfall is when the remaining money needs to be divided. Typically, the investors are first repaid in full. The remaining available funds are finally split between the Investors' Pool (profit share for the investors) and the Producers' Pool (profit share for certain members of cast and crew ) based on the Profit Share agreement contract

Executive Summary:
A summary of project's performance including key financial figures under the three scenarios, Investors Cash Flows and ROI and several charts.

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