Singapore rewrites funding rules

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Finance News

Singapore is to tear down its government film financing infrastructure and replace it with five simplified schemes that cross all aspects of media and entertainment.

The announcement was made this afternoon (Wednesday, 28 Sep) by the Media Development Authority (MDA) of Singapore in a briefing to the local industry.

The current system involves no less than 46 different MDA-backed support schemes relating to seven different industry sectors (film, broadcasting, music, games, animation, new media and publishing) which the local industry has found difficult to navigate. The film sector alone was eligible to use 14 different funding schemes.

These will now be closed to new applications with immediate effect and replaced with the new industry-wide schemes focussing on development; production; marketing; talent; and enterprise development.

The replacement of media-specific funding with schemes that relate to a project's development or production status reflects a blurring of the boundaries between modern media and is intended to eliminate the need for separate applications for every component of a multi-media project. The MDA describes this as "being 360 ready". It also says that it is not seeking to tie content creators to specific pieces of technology, such as 3-D.

Significant to the operation of all the new schemes is the replacement of the concept of co-investment with the one of grant in aid. This is intended to allow better emphasis on script and content development and to allow Singapore companies to use government cash to become equity owners in the film and media products they create.

Over months of consulting, the industry argued that the current system of co-investment had led to a short-term, project-by-project mentality. Grants, it argued, allow more time for content development and can improve long-term corporate sustainability.

However, the MDA says that its funding must still reflect the marketplace for media content and that government money should be matched to and complement private finance. "We should not be the first money in to a project, better we are the last," MDA sources said.

The production segment, which is expected to involve the largest cash flows, will calibrate funding according to the degree of Singapore partnership and Singapore spending. Specifically, it will grant finance up to 40% of the Singapore spend and provide a further bonus of 10% if the beneficiary company starts another production within the following 12 months.

Grant funding under Production Assistance is discretionary and cannot be triggered in the automatic fashion of rebates or offsets. But the MDA says it believes the scheme is broadly comparable to other countries' rebate schemes. "We need this to work before we get to a more comprehensive scheme," the organisation said.

Another difference compared with fully automatic funding systems is that MDA finance is finite and that projects will have to compete for limited resources. The organisation did not announce the value of funds available under each of the five schemes. Instead it said that the size of the cash pools would be "dynamic". Actual figures will be published on the MDA website at a later date and kept current to reflect available finance and amounts drawn down. "This will help people plan ahead," the MDA said.

Among the schemes that Production Assistance will replace are the International Film Fund and the Stereoscopic 3-D Fund, which have been criticised by overseas companies as difficult to use in practice. "Key to any international production using the scheme will be finding a good Singapore partner," the MDA said. "Recipients of the grant have to be a registered Singapore entity. We would expect Singapore spend to be managed by a Singapore entity."

Under the Talent Assistance proposal, which spans scholarships as well as wages, a notable change is that funds can be paid to freelancers. The move reflects the high proportion of individuals working in the Singapore entertainment industry outside of established companies. Intended to groom the next generation of talent and expose it to higher levels of activity, the Talent Assistance scheme can be applied to talent and crew working on international or local productions.

The Enterprise Assistance scheme provides seed capital of between S$250,000 and S$1 million ($192,000 — $770,000) for a maximum of five years to selected companies. Singapore shareholding must be a minimum of 30%.

While the new structure wipes away the 46 previous schemes, the MDA says it will honour all existing funding commitments made to companies and projects.

In the case of the co-investment schemes set up with overseas film and TV companies including Hyde Park Entertainment, Fortissimo Films and Tiger Gate Entertainment Ltd existing contracts have differing expiry dates. It is understood that some of them have chosen to proceed with projects under the old terms, while others have opted to wait to see the small print of the five new schemes before deciding how to go ahead with new projects.

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