Modelling of Media Slate Financing: A Case Study

Anton Capital, UK.

Investment: €150m

THE STORY

Lazuli Solutions has been involved with media financing since around 2002.  In 2011, Lazuli Solutions participated in the first European feature film “slate financing” deal in Europe.  The deal was driven by Anton Capital (antoncorp.com), a boutique merchant bank in London and the client was Studio-Canal, part of Vivendi’s Canal Plus.

The total investment for 30% of the film releases was €150m.

Financial close was achieved in autumn 2011 for a capital structure including bank debt and mezzanine and equity investments.

For more details on the deal follow these links:

www.screendaily.com/updated-studiocanal-announces-150m-slate-financing-deal/5032704.article

euromoney.com/Article/2928950/StudioCanal-signs-Europes-first-slate-financing

ft.com/slate-financing-anton-capital (paywall)

THE CHALLENGE

This slate financing was a multi-picture financing agreement, as opposed to the European norm of single-feature bank financed deals of the past.

In modelling terms this means a very big model able to deal with hundreds of feature films.  

It is a feature of these slate financing deals that the model must be run repeatedly to simulate multiple outcomes. A probability table is then constructed describing the simulated outcomes.

Lenders and investors typically require between 500 and 1,000 simulations to get comfortable with the results.

The peculiarity of a ‘slate financing’ model is not the financial model and cash flow statements but rather the large amounts of films being described – this can exceed 100 and sometimes reach over 300.

THE SOLUTION

Lazuli specifies and builds a media slate financing model for Anton Capital.

THE RESULTS

The model deals comfortably with large numbers of feature films, satisfying the investors and lenders requirement for very low levels of failure, and reports returns for limited and general partners.

The deal was closed in the autumn of 2011.