Completion bonds are a little-discussed but essential part of the independent film financing process, the insurance by which indie films ensure that a film will be completed on time and on budget. You don’t really hear about them unless you need it. Today, though, two of the largest guarantors of such completion bonds are merging in a move that could have a big impact on the indie film space.
Film Finances International (FFI), the parent company of completion bond provider Film Finances, is acquiring Media Guarantors Insurance Solutions (MGIS) to create a completion guarantor giant. The combined company is part of STX Entertainment and the Film Services International family of companies, and the merger helps Film Services become not just a studio but also a service provider. It can add an insurance component to complement its indie flywheel — which already includes financing, physical production, and post-production.
The combination is being presented as a one-stop shop for the indie film market, something that can give studio-quality support and risk assurance across multiple territories, including the U.S., UK, Australia, Canada, and Europe, while also speeding up the investment in data-driven risk assessment tools, which can make it quicker for indie producers to obtain a bond and give financiers more certainty earlier.
“We’ve built something special for the independent market,” said Peter Coleman, CEO of Film Services International, in a statement. “Producers can now rely on one partner for everything a film needs, anywhere in the world, from first dollar to final cut. That is a fundamentally stronger foundation for the films and filmmakers we support.”
Fred Milstein, president and CEO of Media Guarantors, will now serve as CEO of the combined bond company. Steve Berman will become president, and Greg Trattner will assume the role of executive chairman, all under group CEO Coleman. Film Finances has been around for decades and has a large history of experience and knowledge, while Media Guarantors has become very hands-on with filmmakers and entrepreneurial, and the idea is that those two strengths will complement each other moving forward.
What Does It All Mean for Indie Films?
The concern is what taking a guarantor out of the space means for indies who might now have to work with just a single company to get their film bonded. We know how consolidation has impacted and threatens to impact the rest of the industry. But in this case, the bond market is still a very niche space. A majority of films don’t bond if they can avoid it. And the broader challenges facing the indie film market mean that some smaller mom-and-pop vendors are struggling, and there isn’t necessarily a single entity with the breadth of knowledge to help indie producers across the board.
A merger like this creates a healthier vendor that can be a full-service company. Film Services sees this as an opportunity to attract indie projects even if they don’t need a bond, namely because guarantors have the skills necessary to look at scripts and schedules and help identify anything that can go wrong. Through its post-production arms, Pivotal Post and SilverTrak, Film Services can also help at the finishing stage. It’s one of the leading renters of Avid tools, and STX is the studio-facing side of the operation, now building out a new slate from the old STX library.
Case in point: the Katie Holmes-directed “Happy Hours,” which premiered at this year’s Tribeca Film Festival, was one film for which Film Services used all its resources to finance, bond, produce, and support post-production. The film is now working through distribution. Film Services believes that would not have been possible without the combined resources of the entire set of brands and services, and other indies will now have an avenue to do the same.
Deadline first reported the news of the merger.
