RBS banks on indie pics
That's good news not just for British producers, but also those in the U.S. and further afield who have come to rely on RBS as one of the few big banks still willing to support indie filmmaking.
John Swain, who took over last summer as head of the U.K. film and TV banking unit, has secured a renewed mandate from the bank's credit policy committee to offer gap financing and a more flexible form of contract discounting for indie movies up to $40 million.
The bank also will start lending against the U.K.'s new production tax credit, as soon as it is formally ratified by European authorities later this year.
Swain admits that the upheavals of the past year, notably the departure of Lee Beasley to join Standard Chartered Bank in Hong Kong, led to fears in the indie marketplace that RBS had lost its appetite for lower-budget movies.
That's an impression he's determined to correct. Beasley's duties have been spread around an expanded team of business development execs. "We've sent our team to Toronto, the American Film Market, Berlin and Cannes, but we need to get our message across stronger," he says.
Swain's unit has also started working more closely with the bank's two other film divisions -- the global media capital team headed by Alex Brown, which specializes in corporate slate finance for bigger-budget movies, typically involving the Hollywood studios or the big U.S. indies; and the U.K. corporate media team under John Dixon, which arranges single-project finance for movies over the $40 million barrier.
Both of these divisions have continued their business in the past year unaffected by the review of the lower-budget operation.
"Our internal liaison now is much closer than in the past," Swain says. "Communication didn't happen as much as it should have done, but in Cannes, for example, we had quite a lot of joint meetings with Alex."
From the late 1990s onwards, RBS established itself as the blue-chip banker in the Brit indie biz.
But after several years of fat profits, the sudden souring of the foreign sales market a couple of years ago left the bank exposed to some expensive flops, such as Kevin Spacey's "Beyond the Sea."
When Beasley fell ill early last year and then returned to work part-time, the bank realized it had become over-reliant on the contacts and expertise of one individual.
Swain was brought in to conduct a lengthy review of the bank's activities in this arena. He presented his conclusions to the credit committee shortly after Cannes, and won approval to offer four products.
In addition to standard 100% discounting of sales contracts from the major foreign territories, RBS will also consider what it calls "secondary discounting" of pooled sales to territories, such as Eastern Europe, South America or India, that it previously would have considered too unreliable.
It will provide "a modest level" of gap finance -- loans against unsold territories, the riskiest element of any bank deal -- "on a selective basis." But it seems unlikely that RBS will be as aggressive on gap deals as it was in the past. "Historically we were very positive on gap deals, but these deals became sexier and sexier for the producer," Swain notes.
And it will lend against the U.K. tax credit, typically as part of a wider financing package.
