Guernsey: A little bit of Hollywood

Last Updated: 21 January 2011
Article by Jon Taylor

Most Read Contributor in Guernsey, September 2018

Originally published in Contact, January 2011

The number of films being produced by Hollywood is set to fall by more than a third as the major studios struggle against the climate of economic uncertainty. The major threat is from a lack of funding but a new group of leading Guernsey finance professionals may have a solution. Jon Taylor reports on a new government and industry proposition called Guernsey Film.

According to Hollywood figures, 606 films saw the light of day in 2009 but in 2010 fewer than 400 will make it out of Tinsel Town. In the wake of the financial meltdown, banks that had acted as the main funders of films have withdrawn their lending.

Other lines of income have also shrivelled, most importantly DVD sales, which have plummeted by up to 25% in some studios, partly as a result of piracy. Digital downloads and video-on-demand are the new buzz technologies, but they still bring in tiny amounts compared with the dwindling DVD market.

The latest household name to draw attention to the crisis is Francis Ford Coppola, director of the Godfather trilogy and Apocalypse Now. Speaking recently at the Beirut Film Festival, he warned that "the cinema as we know it is falling apart."

That gloomy prognosis rings true with other industry analysts who claim that MGM in particular is on the edge, while other big studios are not far behind. Paramount Pictures registered a loss of almost $150m in the first half of this year.

Paradoxically, while the world's movie capital is in turmoil, the appetite for its products remains buoyant. Ticket revenue has continued to climb by about 2% this year, a modest figure, but a striking achievement in the midst of a recession.

Even those film franchises with a history of solid box office returns are struggling to raise the necessary funding. MGM for example, has been forced to postpone the 23rd film of the James Bond franchise because of debt problems.

Film-making, has the key characteristic of requiring investment over a period of time, with returns deferred until the film is released. There may also be a long tail of 'rights' income from world-wide distribution, video and DVD sales etc. Classically, films were too risky to be used for the savvy offshore investor market but times have changed and the introduction of completion guarantees and of intermediate media holding companies to spread risk has now overcome that problem. It is also apparent that all manner of film financiers are looking towards the independent film fund model for reliable investment returns and this is where Guernsey is beginning to play its part.

"Investment opportunities in films range from pre-sales contracts to tax credits, direct equity investment, gap and bridge finance, completion funds, publicity and advertising. Each stage has its own balance and level of risk and reward. Direct equity investment has been historically common but is not the most lucrative or reliable form of investment. Instead, film funds that spread risk in an informed way are the way forward for film financiers," said Ben Tustin of Guernsey Film.

Ben is director of tax strategies at Marlborough Trust, a Guernsey-based trust company he helped to form in 2003. He is also co-chairman of Guernsey Film which was established by a group of Guernsey-based finance industry professionals in conjunction with the island's government. Richard Garrod is Ben's co-chair and is a director of Confiance Fund Services, a Guernsey-based financial services business.

Richard was also former head of the film tax team at Mazars.

"The idea behind Guernsey Film is to leverage what I believe to be an impressive level of expertise and depth of knowledge of film transactions among those in Guernsey's financial services sector," said Richard. The Guernsey Film management team includes experts in the fields of law, banking, insurance, tax structuring, fund management, investment funds and intellectual property.

While large studios can finance a film or series of films, they have susceptibilities that independent film producers don't and it is this area where Guernsey Film has identified the most likely opportunities.

"Historically, studios were able to sustain large financing structures, but it can take only half a dozen less popular films to cause funding problems in this current economic climate as has happened recently at MGM, where the Bond franchise is now on hold. So more and more film production professionals are starting to look at the independent financing model which the island has been structuring with tax-efficient investment into films for the last 10 years across the whole spectrum of requirements, from pre-production to release," said Ben.

"Financing films is always a delicate balance between the various parties involved in making the film and bringing it successfully to its target audience," Garrod says. "You need to work with people who understand the film industry and have the relevant experience.

"Within Guernsey there are tax-efficient and commercially viable structures available across the board from production to distribution, offering your investors the ability to be involved at all levels in a tax-neutral environment."

Guernsey Film started its promotional drive at an event this September in Soho. The UK film industry is also suffering in these testing economic conditions and the event attracted a wide range of film finance related professionals. London's Charlotte Street Hotel was the venue for the event which, featured the chief executive of Future Films, Stephen Margolis, a lawyer with more than 20 years' experience in the film industry and who has raised in excess of £2 billion for film production since founding the 'specialist, integrated motion picture organisation' in 2000.

More than 75 members of London's film community attended the presentation and the audience comprised specialists from across the London film community, including bankers, investors, investment advisers, lawyers, accountants, producers, distributors and the media.

"Everything came together very well. We had a very strong turnout of more than 75 delegates, our presentation made use of the high quality audio-visual facilities available, the presence of Stephen Margolis was a superb endorsement for the Island and the audience was very receptive to the message that Guernsey can provide a 'one-stop shop' solution for film finance," said Peter Niven, who represented Guernsey Finance at the event.

The event was staged with great timing as it coincided with the drawing up of an aggressive new plan by the UK Film Council to prepare the industry for what it describes as a crucial three years as the body's funding has been slashed to help pay for the 2012 Olympic Games in London. The Government-backed council unveiled its latest three-year plan. John Woodward, the council's chief executive, said it planned to tackle head on the British movie industry's failure to get to grips with the current lending climate and should look 'beyond the normal channels' for future funding. The UK Film Council spent three months consulting with a broad range of companies throughout the industry about the best way to support British film, help them deal with the move into the digital era and also to face the fallout from the recession.

Mr Woodward said: "Aside from the six major studios, the UK film industry is a collection of small and medium-sized enterprises. All the companies face the same problems with the business models collapsing, of how they find a way through."

Tim Bevan, the co-founder of Working Title Films, chairs the film council and will oversee a think-tank set up to identify new policy initiatives to help UK film companies grow. This underlines the fact that there are few independent British production houses that are actually sustainable. Mr Bevan said: "We have a new set of priorities, and a new way of working. With the right level of support, finance and innovation a successful British film industry can continue to help get the UK out of recession and create more high-skilled jobs."

The problems faced by the industry have been compounded by the economic downturn and the forthcoming London Olympics, which will swallow up £25m of the film council's funding over the next three years. "In the film world, the development money is the hardest to find so we will be looking further afield for support," said Mr Woodward.

The UK Film Council was set up by the Government a decade ago and is backed by money from the National Lottery. It has helped to fund more than 900 short films and features and it is one of the few, if any, lottery-backed projects that succeeds in bringing in revenue. For every £1 of lotto money received, the council generates £5.

Recently acclaimed movies which were backed by the fund include Fish Tank, a gritty drama about an Essex teenager which won the Jury Prize at Cannes and a Bafta for best British film. Other big hits include the Oscar-nominated political satire In the Loop and Man On Wire, a film about high wire walking which won a best documentary Oscar.

The council's other roles include promoting digital cinema and attracting US film-makers to shoot at British studios and use British post-production facilities and special effects teams. In the past year, US studios have been convinced to make such films as Clash Of The Titans and Ridley Scott's Robin Hood in the UK. Mr Woodward said the film industry and the council had grown in importance, adding: 'The two have changed together. In the early years we said film could grow beyond a cottage industry. This has unquestionably been achieved as the UK's industry is now one of the most important in the world (The UK film industry turned over £7bn last year, making a £4.3bn contribution to Britain's gross domestic product and employing 49,000 people).

Unfortunately however, without an injection of funding from the private sector this position of strength may suffer. Clearly there are great opportunities for Guernsey Film in this exciting, if somewhat erratic sector. Perhaps this is an opportunity for the governments of Guernsey and UK to work collaboratively to help develop the UK film industry. This new found optimism for film is unlikely to result in the next Die Hard action sequence taking place through the Esplanades of St Peter Port but is another opportunity for Guernsey to diversify its financial service offering. We're recognised as the leading international centre for Captive Insurance, why can't recognition for film finance follow. Guernsey Film, we'll be watching.

For more information about Guernsey's finance industry please visit

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions