Centurion Global Capital
Centurion Global Capital turns letters of credit, guarantees, distribution advances, subsidies and nationally sponsored rebates into working cash for productions both in-house from our production side, but also for third party productions.
Supporting National and International Governments
The media industry is one of the single largest borrowers of funds globally and remains one of the safest and most lucrative markets available to investors. The entirety of film and television production relies on letters of credit, guarantees, distribution advances, subsidies and nationally sponsored rebates that must be converted into cash. Centurion arranges this for productions both in-house from our production side, but also for third party productions.
We take comfort that any money deployed by Centurion has an equivalent note to justify and substantiate the deployment and ensure a full return of Centurion’s money. This specific sector of our business is not to use our money in high risk film ventures. Our core model is to facilitate the finance and cash flow of existing productions and marketing businesses.
As with any lending there are always risks however these perceived risks are insurable with both film and television benefitting from full production insurance and, some television and all feature films adding completion insurance to the package reducing the risk of non-repayment to a negligible level. We can identify subsidies and rebates and supply the projects with the funds as, normally, such subsidies and rebates are only payable after the production costs have been confirmed by an independent audit. If a client supplies a suitable financial instrument then Centurion can cash flow it.
Tax Credits and Subsidies
National and international governments provide a tax credit or subsidy for eligible motion picture or video productions produced by qualifying taxable corporations. These tax credits vary in amounts, most commonly as a percentage of the total production costs of an eligible production up to a maximum limit, however some government programs have stricter rules dictating the required percentage of days or labour quantities to qualify for their tax credits or subsidies.
In addition to national tax credits, some provinces within countries offer a form of a provincial tax credit for motion pictures and videos that are produced, in whole or in part, in the particular province. These tax credits can range from 5% to 25% or more of eligible production costs. The applicable rate for any particular production will depend on a number of factors including the province in which the production occurs, whether the production meets provincial content requirements (where applicable) and whether the production is filmed in a specific location in a province that provides additional regional incentives.
Centurion’s core financing business revolves around these tax credits and subsidies and the discounting of them. The rate of discount is determined by the security of the instrument and its origin. Unstable governments and economies result in lower discount rates to add security to our capital that is placed on these instruments.
Many nations are party to motion picture and/or television co-production treaties with other countries, which enables co-productions to qualify as local content and thus be eligible for government assistance and financing in more than one country, which reduces the cost of production. The most active relationships have traditionally been in Europe, with the United Kingdom and Germany dominant in volume of production.
Currency Exchange Protection
Many productions also operate in more than one currency and to protect our investors we buy the options to purchase the funding currency and then finance those options for each of the productions. The downside of the currency conversion is protected by the option and the upside is still there if the currency shifts in a favourable direction.
We evaluate and manage our exposure to changes in currency exchange risks on an ongoing basis. We enter into foreign exchange contracts to hedge future production expenses denominated in our currency. These forward exchange contracts do not subject us to risk from exchange rate movements because gains and losses on the contracts offset losses and gains on the transactions being hedged. Our principal currency exposure is between British Pounds, Euros and U.S. dollars, although this exposure has been significantly mitigated through the structuring of our currency exchange protection program
Film and Television Investment
There has never been a more exciting time to invest into the creative industries. The growth of new markets such as China and the Far East, advanced technologies give new opportunities to distribute content such as mobile phone and android as well as new producers and channels such as Netflix, YouTube and Apple.
Our objective is to create a multimedia, multinational media group which over time will develop, create and acquire a broad range of content that informs, educates and entertains thus providing a great opportunity for commercial return.