IX. Film Investment and Financing

On August 29,2019,the Report on the Development of Global Film Industry (2019)was jointly released by Modern Creative Media College of Beijing Film Academy, National Film Think Tank of Beijing Film Academy and Social Sciences Academic Press. According to this report, with the gradual influx of capital, especially Internet capital, into the film industry, the model of the film industry chain continues to undergo subtle changes. Competition gradually extends to both ends of the industry chain and no longer focuses on the traditional investment channels and fields of the film industry chain. The next outlet of film investment will involve the fields of film support services such as legal services, financial services, ticketing systems, special effects production, and artist brokerage and the giant capital continues to extend to the entire industry chain.

As for joint-produced films, the most important part in the field of film investment and financing, which investors and producers should pay attention to, is grasping legal risks when signing the “Investment Contract” and “Joint Production Contract” and making the contacts comply with the trading habits of the Chinese market and practical. Bilingual contracts may also run the risk of inconsistent translations of legal terms in authentic texts. Generally, the core terms of such contracts can be divided into two categories. One is the investment income guarantee clause. It mainly includes the terms of preferential dividend rights, repurchase terms, anti-dilution clauses, gambling clauses, selling rights clauses, and liquidation priority clauses. The other is the control clause of the target company. It mainly includes the clauses of corporate governance structure, one-vote veto clause, prohibition on competition, and information disclosure clause.