Even though he has a background in real estate, Phil Hunt played well to hardened Sydney producers who can pick a dodgy deal faster than funny money in NSW politics. Lyn Norfor reports…
Recently Phil Hunt, co-MD of Bankside Films, presented at a breakfast session in Sydney, hosted by Screen Australia. Hunt was spruiking his new film investment company, Star Gate Film, as a better option for producers to finance the Producer Offset.
Hunt began by outlining his film credentials, first as an advertising photographer which paid well enough for him to begin investing his the property market which is where he made his real money. Then he produced a number of indie films including Chunky Monkey, Fast Food and Rabbit on the Moon before investing in producers who he says “really knew what they were doing and were very good at it.” During this time, he pitched an idea to Hilary Davis at Beyond International and in 2007, formed Bankside Films, an international sales company, with Davis and Stephen Kelliher, also from Beyond International.
Hunt manages to slip into his presentation that he was indeed a millionaire but hastens to add, that his fortune was made from real estate and not from working in film – no surprise to the filmmakers in the room.
Hunt says that Bankside has a family philosophy and everyone gets on well with each. He also stresses that they are honest, transparent, diligent and provide great service. Hunt disses many of the larger film investment companies as he uses the white board and some very funny drawings to illustrate his point.
Firstly, he draws a diagram showing how Bankside – which handles international film sales, is connected to Head Gear – which provides money for films that Bankside sells plus gap and international market guarantees, is then connected to Stargate – which provides finance for tax credits (such as the Producer Offset) and a little bit of gap funding. Hunt laughs – “maybe”.
His next whiteboard diagram is a masterpiece of crosses, lines and arrows with many layers and circles. Right at the top, at the end of an arrow is the word ‘film’ – which is Hunt’s whole point. This is the world of Managed, or as he calls them, Managed-ish Funds and film is a tiny part of this, far removed from the original investors and with many layers of middlemen. On top of all that, a huge amount of legals are required to make sure that the investments are safe and secure for the many different parties involved. And, of course, this is where Stargate is different.
Hunt is passionate about his new investment company and says he is the only employee, with one single source of finance – his silent partner, Metrol (an old friend of his who has made a fortune in something to do with oil). Hunt gives the okay on all financing and the loan is simple and straightforward. He doesn’t require a completion bond and Hunt reckons he’ll “undercut everyone except the banks.”
Also, he says he is much quicker to respond than banks. Janine Pearce, an entertainment lawyer who handled the legals on The Little Death (director: Josh Lawson), contributes her experience and says that Bendigo Bank, for example, requires lots of guarantees, including personal, plus a completion bond. “There is no negotiation with banks regarding paperwork and the production company legals are high because of all this paperwork. Banks also take a long time and this doesn’t always fit in with the production schedule.”
Through Stargate, Hunt offers a flat interest rate, rather than a variable rate, and they fund and recoup in Australian dollars with Stargate taking the currency risk. He makes the distinction between Bankside and Stargate with Bankside making the qualitative decision about which films they will take on as sales agents while Stargate will lend against the Offset without assessing the quality of the film and lending to films that Bankside is not selling.
Hunt takes questions from the audience and gets into the nitty gritty of figures. When asked, he says that Stargate will charge a 7 – 7.5% interest and arrangement fee. Stargate does not take equity and will own the Offset up until the loan repayment amount.
Even though he has been doing business in Australia for 17 years, Hunt has two bugbears with the Australian industry – one, “our films are too Australian and don’t travel well.” He also acknowledges that British films generally don’t travel well either. He praises Patrick because “it is a theatrical horror /slasher/gothic film that will appeal to international audiences.” The second bugbear is the June 30 submission date for the Offset once the film is complete. Hunt says “its madness” and explains the better UK model where tax returns can be submitted at different stages of production – on completion of principal photography, during post production and finally on completion, with monies being paid 30 days after each tax return lodged. He is about to continue his rant against the Australia Tax Office (ATO) when Ross Matthews, Investment Manager, Screen Australia, interrupts with the wonderful understatement – “the ATO is immovable.”
Hunt finishes with a flourish – “Stargate will finance television and there is no lower limit to our Offset lending … we’re family and we’ll always be around.”
From his breakfast performance, Hunt certainly appeals to the Australian audience with his direct, simple and humorous approach to the arcane world of film financing. He has already done a deal with Michael Petroni and Jamie Hilton’s Ticket to Ride, a low-budget production and financing company that does not rely on federal or state film agencies for funding, picking up their debut feature, The Little Death with a second feature Backtrack already in production. Hunt looks set to stay around the Australian film industry stirring things up for some time to come.
