Branded Entertainment

Branded Entertainment Financing

Branded Entertainment Financing

Imagine if you could create an entire TV Series specifically designed to feature your brands and products, normally draining $6 million from your marketing budget…but have zero impact on your marketing budget and zero impact on earnings?

It sounds crazy, but through the end of 2008, the U.S. tax law allows this.

Last year, an unprecedented change in U.S. tax law occurred that may allow shrewd corporate executives to partially or fully “subsidize” the costs of branded entertainment and product placement using government funding. The change in law occurred as part of the American Jobs Creation Act of 2004 (the “Jobs Act”), the primary purpose of which is to bring jobs back to America soil.

Several provisions of the Act may be relevant for companies wishing to advertise or market their products in a cost-effective manner. For instance, the Act grants a 100% same year write-off (instead of capitalization & amortization) of production costs of films and TV programs if 75% of the total compensation paid with respect to such production is compensation for services performed in the United States.

Versus paying a Mark Burnett or an NBC for product placement and hitting your P & L as an expense, you become a financier of a Television series or Film and have it cost you nothing by receiving the same year write-off netting your expense to zero.

The Act also effectively reduces the marginal rate on “qualified production activities income.” Many states have also joined in by granting various credits for films and TV shows produced within their borders.

Because some of the tax incentives will sunset in 2008, now is the time for companies to get serious about branded entertainment.

   Watch a Clip of Jeff Greenfield discussing Branded Entertainment

Our team handles all aspects of the process from beginning to end. In direct consultation with us, we will not only specifically tailor a financial structure that reduces or eliminates production costs; we will also provide creative and strategic marketing consultation and create proper content in which to integrate the advertiser’s product or service. In many cases, we will even guarantee worldwide distribution of the content prior to principal photography even beginning.

Our financial structures are designed to provide the advertiser a vested equity ownership interest in the production. This means that the advertiser will have creative control over how their product is integrated as well as substantial upside if the show is a blockbuster hit.

Ownership is a key ingredient in permitting the advertiser to qualify for some of the tax incentives. As an owner, the advertiser may qualify to write-off the full cost of production, and if the initial investment has been leveraged, the advertiser may obtain more in tax savings than it initially invested in the production.

Watch an episode of the “The Apprentice” – it’s one big commercial for brands, with each brand paying $3-5 million per episode!

This is the kind of commercial we want to create for our clients, but without the enormous costs that brands are currently paying, and with continuous exposure versus just one night!

Request The White Paper
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