Seeing What’s Possible

Arena’s Deals

A collection of stories about Seeing What’s Possible.

Film Production Finance

Making (and saving) movies

A movie production finance group in the western US faced a growth challenge: It had deep experience financing small- to mid-sized productions, but many potential partners who could be sources of capital consider film finance too risky (or consider these deals too “small” to bother with). That’s because most investors don’t know how to compartmentalize the opportunities and risks in film production—but Arena does.


One of Arena Investors’ sources of edge is our vast network of joint venture partners all over the world that provide us access to investment opportunities that are unique, interesting, profitable if structured properly, and oftentimes very mutually beneficial for us and our borrowers.

The film finance group based in the western US is a great example. Arena has committed up to $50 million to finance films, mainly backed by municipal tax credits (i.e., Arena provides financing by lending against the tax credits that filmmakers receive for filming in certain jurisdictions).

This partnership began in Puerto Rico, a place very familiar to Arena. We have financed many projects there over the years, including for one of the island’s largest architectural and design firms that facilitated the island’s rebuilding efforts after Hurricane Maria. Our first film project with our partner was a Nicholas Cage movie which originally fell through after Hurricane Maria hit the island and the original financiers backed out just a few weeks before filming was to begin—that allowed Arena to step in as a quick source of capital and help fund the project and bring it to completion. Upon the successful completion of this deal, conversations began about a broader partnership.

In financing films, Arena seeks to avoid taking content risk (i.e., having to make a prediction of the film’s box office receipts). Whereas many film finance investments are unsuccessful, Arena structures most of its loans around tax credits and other tangible contracted film revenue streams to have repeatable success not directly tied to the particular project being considered. Arena frequently requires complete insurance so its investments are not subject to execution risk.

To incentivize filmmakers to spend money that supports their economies, many local jurisdictions issue tax credits, typically of around 40% of the expenses incurred. By understanding the timing and processing of those credits, and the underlying needs of the filmmakers thanks to our specialist partners, Arena can monetize the credits up to the amount the government will later be issuing, meaning Arena’s investments are able to avoid taking content risk. In this way, Arena sees what’s possible (it’s not just a slogan!) and helps many “passion-projects” of creators come to life in a way they otherwise could not have.

Because of Arena’s ability to quickly fund smaller transactions in an industry that’s difficult to forecast, Arena fills a void that would otherwise not be filled. Arena has through mid-2021 helped finance or been involved with the planning of 24 films in Puerto Rico, various US states and other countries. In fact, given the backlog of content creation that developed through COVID-19, Arena has deployed approximately $35 million into projects in this partnership over the past six months alone. All told, we estimate our investments have created or supported more than 2,500 jobs through this one partnership.

It’s no accident that Arena Investors is known for the diverse range of niche investments in our portfolio, and our partners’ niche expertise and extensive experience in a wide range of industries make these relationships great fits. Many other larger institutional investors often will not get involved in investments of modest sizes or in specialty areas, or simply won’t take the time to push past conventional wisdom or commonly held (but not fact-based) biases and look deeper. Arena exists to conceive and execute creative financing solutions—even if that means the occasional in-person due-diligence visit to a film production studio in rural Louisiana for a $500,000 loan on a $5 million film budget. We’ll do what needs to be done to promote a successful outcome, in this and many other industries.