Film financing: Hedge funds say it’s a wrap, but should they?

Hedge funds and banks are backing out of film financing deals because of liquidity issues.

Investing in studios’ slates of films had become big business for hedge funds and banks over 2005 to 2008 with the two side partnering up to create vehicles. Studios, strapped for cash and keen to offload some risk of flops in return for shares in DVD and TV sales profits, had turned to Wall Street to help them. Deals were put together whereby hedge funds and banks invested alongside the studio in seven to 25 films to be made in the future.

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