FilmHedge offers international filmmakers a credit lifeline through fintech | Characteristics

With the banking system fragile and interest rates abnormally high around the world, a growing number of filmmakers are seeking capital outside of traditional investment routes.

“Good luck trying to get a loan for anything from a bank right now, much less a movie,” says Jon Gosier, founder and CEO of FilmHedge. “Filmmakers can still come to FilmHedge as our money and interest are not tied to the banks. It’s one of the many benefits we offer filmmakers and financiers.”

Based in Atlanta, Georgia, the fintech firm has a major presence at Cannes this year, sponsoring the International Film Finance Forum and the Producer Forum.

“These events make up the pinnacle of the entertainment industry,” says Gosier. “As a financier of films with budgets as high as $50 million, globally, FilmHedge has an important seat at the table.”

Gosier understands the importance of not only participating in Cannes, but contributing to the success of the critical financial landscape that can make or break a project.

“We don’t match borrowers with financiers, but we try to be of service to the filmmaker by educating them about the process of leveraging private credit for film and TV production, otherwise they risk rejection,” he says.

FilmHedge offers a proprietary fintech platform that provides short-term bridging and gap loans to complete media projects in the $3m to $50m budget range, lending up to 10% of the total budget.

By taking a debt financing approach, scripts and casts are not determining factors in the loan process. Instead, FilmHedge looks for security in distribution deals, tax credits, advance sales, minimum guarantees and whether a film is tied. It essentially transfers these assets for its network of investors, which includes hedge funds, private equity funds and family offices.

“We advance money to filmmakers based on receivables,” explains Gosier. “We know that the money is guaranteed to go into production. In this way we reduce risk, and it is easier for us to do this on a large scale than for any individual investment fund or family office.”

Need for speed

Gosier points out that producers who work with institutional lenders can be frustrated by how long it takes to access short-term funds.

“If you need additional capital to pay your lead actor for a couple more days on set, you don’t have three to five months to close a deal — you need it now,” he says. “Filmmakers and financiers who work with FilmHedge understand that we solve both halves of the equation.”

The prototype for FilmHedges’ model was the 2020 sci-fi action film Skylines, co-produced and directed by Liam O’Donnell, which was debt-financed at an interest rate of 15%.

In 2021, FilmHedge allocated more than $100 million to more than 20 productions – including scripts, documentaries and features – and generated more than $13 million in returns. Last year it closed a $100 million credit facility and just signed a $25 million deal with a Georgia-based manufacturing company. “We are in the process of expanding our credit facility beyond $100 million,” says Gosier. “By the end of the year, we will be significantly larger.” FilmHedge also wants to establish offices in Europe.

The company’s management team has experience in finance and film. Co-founder and growth manager Mickey Vetter is a former investment banker with expertise in short-term lending within construction finance. Co-founder Josh Harris led the entertainment finance division of City National Bank and serves as FilmHedge CFO and COO. Harris is also a successful producer on titles including Blood For Dust, starring Kit Harington, and Land Of Bad, starring Russell Crowe.

“There are many lenders that offer media debt financing, but what we do differently is that we are faster and more efficient because we adopt a technology-enabled onboarding and underwriting process,” says Gosier.

This includes providing real-time transaction reporting and analytics over the life of the loan, and an algorithmic process for applicants that reduces red tape associated with traditional film financing.

“All of this is managed by our team of experts who use our proprietary platform to automate much of the process, such as gathering and reviewing all legal documentation, to expedite the green light of funds for filmmakers and deliver returns efficiently for investors,” concludes Gosier.