A year ago, film crews were in Philadelphia shooting the thriller Law Abiding Citizen, starring Jamie Foxx and Gerard Butler.
A year later, the independent film company behind that movie is trying to wrap its initial public offering.
However, pulling off an IPO has been something of a thriller for any company over the last 18 months.
Law Abiding Citizen was the first release in the United States by Film Department Holdings Inc., of West Hollywood, Calif. It hit theaters in October and grossed $73 million in North America and $115 million worldwide.
According to a document filed with the Securities and Exchange Commission on Monday, Film Department had a gross budget of $52 million to make Law Abiding Citizen, which was primarily shot in the city.
The filing also makes clear that seeking “significant government incentives” to make movies is key to its strategy. For Law Abiding Citizen, Film Department got a transferable tax credit of $8.65 million from the State of Pennsylvania. The company said it swapped the credit to an unidentified third party for a cash payment of $7.68 million.
Hmm. Make a movie for $52 million. Take in $115 million at the box office. Should be a money-maker, right?
Accounting is never that easy, plus Film Department is a start-up. Industry executives Mark Gill and Neil Sacker, who were involved with Crash and March of the Penguins, founded Film Department in May 2007 - just in time to endure the Writers Guild strike, a threatened strike by the Screen Actors Guild, and the recession.
So while the company generated its first revenues in 2009 - $40.3 million - it lost about $10 million and remains highly leveraged.
According to Bloomberg News, only 11 U.S. companies have gone public so far in 2010, and on average they had to cut the size of their deals by 28 percent.
Sure enough, Film Department, which first filed for its IPO in December, has trimmed the number of shares it’s offering by 29 percent. It now hopes to sell 4.6 million shares at between $12 and $14 per share.
All of which has little to do with Philadelphia, except possibly this: They want to make Law Abiding Citizen 2.
Keep those Pennsylvania tax credits warm.