The Commission reinforces its support to the audiovisual sector by improving access to finance
In the last years, the Commission has put in place several financial instruments, together with the European Investment Fund, to help bridging the financial gap in the audiovisual sector. The European Commission and the European Investment Fund (EIF) announced four investment agreements on 24 September 2023, at the San Sebastian Film Festival: three guarantee agreements and the very first equity investment under MediaInvest. The agreements are worth a total of €68.25 million and are expected to leverage around €500 million worth of new financing for audiovisual and creative companies and projects. The ultimate goal is to boost investment in the audiovisual sector and to encourage the creation of audiovisual equity funds.
These agreements are supported by the InvestEU programme, which aims to trigger more than €372 billion in additional investments over the period 2021-2027.
A premiere for the equity instrument MediaInvest
One year after Commissioner Breton launched the MediaInvest equity instrument at Cannes Film Festival 2022, the EIF has approved an investment of up to €25 million into the French fund Logical Content Ventures. The fund is targeting to raise up to €70 million in equity investment in European audiovisual production and distribution companies and will benefit from a co-investment partnership with Pathé, a French film production and distribution company. Logical Content Ventures is an alternative investment fund managed by the French company Logical Pictures SAS. It finances content production, focusing on production of movies, TV series and impact content across Europe – dealing with women’s empowerment, diversity and human rights, among other.
It is expected that EIF’s role as anchor investor will trigger a cascading effect across the EU alternative investment ecosystem that will boost investment in the audiovisual sector, encouraging the creation of audiovisual equity funds. MediaInvest aims to support total investments of €400 million for the period 2022-2027.
The EIF scores three more guarantee agreements under InvestEU CSS Guarantee
The EIF also signed a transaction with Compañía Española de Reafianzamiento (CERSA), a Spanish non-profit promotional counter-guarantee institution. CERSA will benefit from a €20 million guarantee line. This support is expected to leverage a portfolio of around €230 million of counter-guarantees, enabling the network of Spanish mutual guarantee institutions to offer enhanced access to finance in the cultural and creative sectors in Spain (including film, theatre, video game production, music and performance, and editorial fields). The loans available to SMEs will translate into increased support for their ecosystem which often faces difficulties in accessing finance due to the limited size of the market and demand uncertainty, among other issues.
The second transaction also covers Spain as the EIF reached an agreement with CREA, a private mutual guarantee institution addressing financial challenges faced by SMEs in the audiovisual sector and with CERSA as coordination entity. EU support will come from a €15 million EIF guarantee line under the CCS GF product that is expected to leverage a portfolio of around €145 million of guarantees, to be issued by CREA, which will provide these guarantees to SMEs and small mid-caps operating in the audiovisual sector on more favourable terms, enabling these companies to scale up their activities.
Finally, the EIF signed an agreement with MDDG S.à.r.l., a new Luxembourgish fund specialised in investments in the audiovisual sector, mainly financing co-production of films and TV series. This deal is materialised through a €8.25 million EIF guarantee line that aims to leverage a portfolio of around €50 million in financing. MDDG will act as a general partner of its investment vehicles ‘The Archers’ and ‘The Archers Production’.