Recently, in an interview, director-producer Mahi V Raghav of Yatra fame stated that Hollywood producers never invest money and that they only bring their skill to the table. Who then invests money in movies not made by established studios like Disney, Warner Bros., or Universal?
Among others, Private Equity Investors do the investment. High-net-worth individuals, venture capitalists, or private equity firms provide cash in exchange for an ownership stake and a share of the profits.
Secondly, producers sell the distribution rights to different international territories before the movie is even filmed. They take those signed contracts to a bank to secure a production loan.
Also, many states in the US and countries offer refundable tax credits or cash rebates (sometimes covering 20% to 40% of the local spend, a report by The Washington Post says) just to get the production to shoot there. It is also common in Hollywood for top-tier actors or directors to receive a credit as a producer. This rarely means they put in money.
Many Indian films are made by secret investors, whose names are never known to the public. This is not an above-board system that parallels Hollywood.
