Article: Investment banks no longer in the frame for financing the movies

THERE is a Eureka moment in the musical The Producers, when the accountant Leo Bloom begins his doomed quest to put on the worst show ever. "Under the right circumstances, a producer could make more money with a flop than he could with a hit," he says.

A couple of years ago, the same was true of film financing. Tax breaks meant that investors were guaranteed their money back whether they funded an Oscar winner or a turkey.

These were repealed in 2006, but cheap credit, particularly in Hollywood, had already filled the gap. Lured by the glamour of the silver screen, private equity, banks and hedge funds piled in to underwrite American blockbusters. More than $10bn is thought to have found its ...

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