Case | HBS Case Collection | November 2002 (Revised November 2006)

Tax-Motivated Film Financing at Rexford Studios

by Mihir A. Desai, Gabriel J. Loeb and Mark Veblen


The head of production for Rexford Studios must analyze the terms and value consequences of an international financing involving a German film fund. The financing involves a sale-leaseback structure where international tax rules give rise to a sizable economic pie that is divided up among the fund investors, the studio, and the arrangers. To conduct the negotiation, the producer must value the cash flow streams to each of the parties and recognize the nature of the tax arbitrage in the context of his overall financing needs. As a consequence, the major issues involved in film financing and the nature of sale-leaseback transactions driven by tax considerations are explored, as is the competition between countries for film production. Finally, the underlying determinants of opportunities created by international tax rules are valued. To obtain executable spreadsheets (courseware), please contact our customer service department at

Keywords: International Finance; Financing and Loans; Taxation; Cash Flow; Financial Strategy; Financial Management; Competition; Film Entertainment; Entertainment and Recreation Industry; Financial Services Industry; Germany;


Desai, Mihir A., Gabriel J. Loeb, and Mark Veblen. "Tax-Motivated Film Financing at Rexford Studios." Harvard Business School Case 203-005, November 2002. (Revised November 2006.)