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- Sale-and-leaseback is a financing method for releasing capital and improving liquidity.
- Comprehensive legal classification includes civil, tax, commercial and insolvency law.
- Areas of application include real estate, machinery, IT infrastructure and the media industry.
- The advantages are improved liquidity, balance sheet optimization and flexibility of financing structures.
- Disadvantages include higher costs, long-term commitment and complexity of the contracts.
- Special features in the media and film industry relate to film rights and international transactions.
- Current developments take into account digitalization and ESG criteria for sustainable business practices.
Sale and leaseback is a financing method in which a company sells an asset to an investor and then leases it back from the buyer. This method is often used to release tied-up capital and improve liquidity. In Germany, sale-and-leaseback is used in various sectors, including the media and film industry.
Legal classification
1. civil law: combination of purchase contract and leasing contract
2. tax law: complex tax treatment, depending on the specific structure
3. commercial law: accounting regulations according to HGB and IFRS
4. insolvency law: Possible contestability in the event of insolvency of the seller/lessee
Functionality
1. sale: company (seller) sells asset to investor (buyer)
2. leasing contract: simultaneous conclusion of a leasing contract for leaseback
3. use: seller continues to use the property in return for lease payments
4. term: typically medium-term to long-term contracts
5. options: Possible buy-back option at the end of the lease term
Application areas
1. real estate: office buildings, production facilities, logistics centers
2. machinery and equipment: production facilities, vehicle fleets
3. IT infrastructure: servers, networks, computer systems
4. media and film: film rights, licenses, technical equipment
Advantages
1. liquidity improvement: release of tied-up capital
2. balance sheet optimization: possible improvement of balance sheet ratios
3. tax aspects: Potential tax advantages
4. flexibility: adaptation to changing business needs
5. off-balance sheet financing: possible under certain conditions
Disadvantages and risks
1. costs: often higher total costs compared to traditional forms of financing
2. long-term commitment: restriction of future freedom of action
3. dependency: risk of financial difficulties of the lessor
4. complexity: legal and tax challenges
5. impairment: risk of impairment of the leased asset
Special features in the media and film industry
1. film rights: sale-and-lease-back of film rights and licenses
2. production financing: use to finance film productions
3. catalog exploitation: monetization of film catalogs
4. international aspects: Cross-border transactions and exploitation of rights
Legal and tax challenges
1. attribution of beneficial ownership
2. value added tax treatment
3. accounting in accordance with HGB and IFRS
4. contract design and risk distribution
5. compliance with industry regulations (e.g. Film Subsidies Act)
Current developments and trends
1. digitalization: adaptation to digital assets and business models
2 ESG criteria: Consideration of sustainability aspects
3. regulatory changes: Adjustment to new accounting and tax regulations
4. innovative structures: development of hybrid and flexible sale-and-lease-back models
Conclusion
Sale-and-leaseback is a complex financing instrument that offers companies, particularly in the media and film industry, opportunities to raise capital and optimize their balance sheets. Its use requires careful consideration of the advantages and disadvantages as well as precise legal and tax structuring. In a changing economic and regulatory environment, sale and leaseback remains a relevant but challenging financing tool, the use of which requires thorough analysis and expert advice.
