Orion's Belt (film) - Financing

Financing

In the early 1980s, Minister of Culture Lars Roar Langslet increased subsidies for Norwegian film. In addition to increased focus on quality and costs, the system encouraged films to be organized as a kommandittselskap (KS)—a model from the shipping and petroleum industry where each ship was owned by its own KS and had a mix of limited and unlimited liability. This resulted in an increase of private capital to invest in films. While the 1970s had been dominated by dramatizations of classical novels and popular plays, the 1980s saw inspiration from Hollywood.

Work on financing the film started in 1982. Alveberg and Borgli established the production company Filmeffekt and hired Scanbroker to secure financing through KS Orion Film. The business magazine Økonomisk Rapport warned against investing in the film, characterizing it as an unrealistic "castle in the sky". In December 1983, the Embassy of the Soviet Union placed an official complaint against the filming of Orion's Belt, accusing it of being covered military activity. The complaint was plainly rejected by the Norwegian Ministry of Foreign Affairs.

The film received problems when applying for state grants from Statens Filmproduksjonsutvalg. Despite that the screenplay was regarded as exceptionally good by independent consultants, it was used as the reason for the initial rejection. Minor modifications were made, after which the board argued that the Norwegian film industry was too small for such a project and that an action film, with a potential for international viewership, was beyond the mandate of the board. Part of the film industry wanted the board to give Orion's Belt and another film equal recommendations for force the government to make a film-political decision, but the board twice ranked Orion's Belt second. In mid 1983, the film was awarded grants of NOK 6.4 million of a budgeted cost of 10.5 million. Private financing of the KS was completed in 1984. By then the cost estimates had escalated to NOK 15 million, largely because of the delays.

Orion's Belt was the first film to be financed as a KS, with some investors investing capital and others only guaranteeing. The state grants were structured in such a way that had the film been withdrawn from the cinemas after a revenue of NOK 5 million, all investors would have received more money at the expense of the state. This was in part because increased grants reduced the tax advantage of the KS model. Susequently the rules were changed to increase the incentive to make a high-grossing production. The tax rules also caused problems for Alveberg and Borgli to finance their next film, Etter Rubicon.