Completion bond company Film Finances has launched an office in Shanghai, which it believes will help encourage greater transparency and make accessing financing easier in China, the world's second-biggest film market.
"Shanghai is the perfect place for us to have our offices. With our presence here in Shanghai, we hope that we will be able to bridge the gap between the parties so there will be more opportunities for filmmakers from China and elsewhere," Steve Ransohoff, co-president of Film Finances, told those at an event to open the offices in China's financial hub.
"The product that we offer does not exist in China at the moment," he said. Many people had asked why it was needed, but Ransohoff said it would help producers access capital and make financing films easier.
China has an abundance of investors, but completion bonds are rare. Swelling budgets and more international interest means that completion bonds are becoming important, and Ransohoff believes they will become common in China.
"We hopefully will build a business that will help in small part to build greater efficiency and transparency to the film business in China. We will provide the product that will make it easier for producers to access capital," said Ransohoff. He said the initial focus would be on co-productions, but the hope was to eventually deal with domestic Chinese films.
Completion bonds, used in the film, construction and other industries, have a guarantor promise that a project will be completed on time and on budget in return for a premium to insure the risks. Investors are more likely to get involved in a project with a completion guarantee.
Hu Jinjun, director general of the Shanghai Municipal Administration of Culture, Radio, Film and TV, said he hoped that completion bonds would boost filmmaking in the city.
"I hope we can take advantage of the finance center and free trade policy to introduce film completion bonds and make efforts to build the Shanghai film industry and promote film prosperity," said Hu. There were 192 films registered in Shanghai last year, up 95 percent from the previous year.
The new office is located in the Shanghai Free Trade Zone, but it will in March or April move to the Huanshangda International Film Park.
The event was also attended by Jason Blum, producer at Blumhouse Productions (Paranormal Activity, The Purge), Cyril Drabinsky, vice chairman of Deluxe Entertainment Services Group and Jeff Colvin, senior vp Comerica Bank.