Russell Crowe has not kept a low profile during his latest sojourn to Ireland. The Oscar-winning actor has been spotted dining in eateries across south Dublin, cycling through Wicklow and on set at locations throughout the capital. The Australian is shooting The Pope’s Exorcist, a movie based on the real-life story of Vatican-based Fr Gabriele Amorth, who carried out over 100,000 exorcisms before he died at the age of 91 in 2016.
Crowe is not the only A-lister knocking about Ireland. Jonathan Rhys Meyers has been in Wicklow town shooting The Last Girl, while Colm Meaney is also currently filming in Co Wicklow. Adam Driver, star of the most recent tranche of Star Wars films, has been in Ardmore studios, while Antonio Banderas has been in Ireland for Jon Keeves’ thriller The Last Girl.
The productions are in Ireland for various reasons: location, talent, infrastructure. But let’s be honest, they are also here for tax breaks. Last year, television and film productions claimed €98 million in tax credits through the Section 481 tax break for the sector. This was a slight fall-off on the previous year when the figure peaked at €113.8 million. However, the 2021 number was impacted by the pandemic, and it is expected to rise again this year.
The tax breaks are designed to help Ireland’s cultural output across animation, feature films and television shows (video games have a similar scheme of their own) and lure in foreign investment into the audio-visual sector. And, by and large, it has achieved its desire. Rosanna delved into the number of productions being routed through Ireland in recent years, including a breakdown of their specific category and location.
But the scheme also represents an investment opportunity. The days where investors could plough money into individual productions through an investor-based tax relief ended in 2015. Instead, the new model allows for a credit against the production company’s corporation tax liability.
So, instead of getting a tax break, investors can secure a return. A recent fund by BCP outlines how it works. BCP’s Film Finance Scheme 4 offered investors the opportunity to participate in the sector and targeted “an attractive targeted return of 5 per cent to 6 per cent a year”. This was net of all fees and charges and assumed reinvestment of the coupon over a seven-year window.
The scheme provides short-term finance to medium-sized film and TV projects which meet strict criteria. The firm said BCP Film Finance Schemes had provided nearly €34 million to more than 60 projects over the previous seven years, and that no project funded by BCP Film Finance Schemes has defaulted on capital to date.
They are not the only firm offering a section 481 product. Saffery Champness, a global leader in entertainment finance, has an office on the ground in Dublin and works with most of the big-budget productions in Ireland. Crowe also offers a product.
For the production, the credit is granted at the lowest of 32 per cent of the lowest of eligible expenditure; 80 per cent of the total cost of production of the film; or €70 million. However, there have been repeated calls for the €70 million cap to be enhanced, something that would open up more investment opportunities here.
The scheme is to cease at the end of 2024 and is currently being reviewed by the Department of Finance ahead of the upcoming budget. After all, if it is to be extended or enhanced, a decision needs to be made this year, given the lengthy timelines in getting a production off the ground.
The recent report of the Future of Media Commission said the government should consider a further extension of the scheme, “with consideration given to expanding eligibility to broadcast media”. This would be a game changer, as it would allow international studios the capacity to produce shows directly in Ireland as opposed to routing the production through local partners.
It might represent a short-term hit for a small number of indigenous producers, but it would undoubtedly lead to a more holistic and sustainable industry in Ireland. If the big studios come to Ireland, they are also likely to build big studios, something that would benefit everyone. As the commission said:
“It is also acknowledged that this incentive alone is not enough to sustain screen production in Ireland into the future. Investment in sectoral infrastructure is seen as crucial to continued success.”
The relief was also examined in the Tax Strategy Group papers, released last week. The papers highlight the fact that production companies must commit to training and upskilling outlays that are proportional to the amount of tax relief that they ultimately receive. They also show how the sector has helped the animation sector thrive, with 33 per cent of the productions certified in recent years coming from this genre.
However, surely, we could go further and look at other genres. Reality television and shiny floor talent shows were not in vogue in the mid-1990s when the legislation was introduced, and as such falls outside its scope.
However, there is a growing industry in that space in Ireland now. BiggerStage, the production business led by former Virgin Media Ireland boss Pat Kiely, recently produced the US classic musical game show Name That Tune for Fox – in Dublin. Just to be clear, this was not an Irish version of the show. Far from it. Host Jane Krakowski and band leader Randy Jackson flew to Dublin – as did the competitors – for recordings that took place in front of an Irish audience but were broadcast on US television. This was classic FDI – but without any of the enhancements.
I have heard rumbling that some independent producers are against extending Section 481 on the grounds it would give foreign producers an advantage. I am struggling to see the rationale. It would mark the first time I have ever seen an industry object to a tax break to help it.
It would seem logical to enhance the tax relief for unscripted dramas. When tax breaks work well, they can have a positive effect. The trouble is if the industry becomes addicted to them. That is something we need to avoid too, but, for now, the sector seems to have worked the right balance.
Ireland’s film and television sector has been booming in recent years. It is creating high-value jobs and promoting Ireland on the world stage. And, for rank-and-file investors looking for somewhere to put some money, it would also offer more opportunities.