An Inside Look At The Corporate Structure of My Indie Film StudioNov 19, 2022
Read time: 3 mins | YT Video
In today's issue, I'm going to let you inside the structure of my film studio, Exile Entertainment.
This will be useful for anyone who is thinking of starting or growing a Film & TV production company. You will gain a deeper understanding of how to protect your valuable IP. This will put you in a good position if you one day want to sell your business.
Unfortunately, most filmmakers don't think this far ahead.
A little planning goes a long way
There are a few reasons we get this wrong as filmmakers:
Bad (or no) advice.
If this is you, don't worry! By the end of this email you will understand how to structure your business.
Here's how, step by step:
Company 1: The Shareholder
This is where your profits go.
The shareholder can be you (an individual), a company or trust that you control. It can also be a combination of people and/or companies.
The shareholder owns the shares in your Production Company. So in the event of profit distribution or a sale, it's the shareholder who benefits.
Company 2: The Production Company
This is where value turns into profit.
The Production Company holds the IP to your films and brand. If someone is going to buy your business, it's because the assets you have created are valuable.
It's also where you will generate income as a writer/producer/director.
Company 3: The Special Purpose Vehicles (SPV)
This is the work horse.
This company exists for the sole purpose of actually making the film. Usually, we name these companies after the film for simplicity.
The Production Company hires the SPV to execute the physical production of the film. It also creates a layer of protection between the production of the film (risky) and the IP (valuable).
Company 4 (optional): The Distribution Arm
This is where you increase profit margins.
The only thing better than owning the IP is owning the distribution rights. Without taking on the risk of production. As a producer, if you sell the distribution rights you lose 50% of the potential income. This is why 'vertical integration' makes sense.
The problem is that to run a successful distribution company you need capital. Capital allows you to compete with the marketing budgets of the major and indie studios.
With all that said, this is Exile Entertainment's corporate structure:
Well, that's it for this week.
I hope you enjoyed it.
See you next week!
Whenever you're ready, there are 2 ways I can help you:
1. Develop your filmmaking skills [FREE] here (950+ subscribers).
2. Join our Producing Accelerator program to produce your feature film (1 spot available for November).