CINEMANX chairman Steve Christian has also offered a robust defence of the industry and explained how the Island has benefited from it.
He said: "Any film investor will confirm that a return in the film business has to be based on a long-term, slate (i.e. many films) basis.
The £33 million investment quoted against a £6 million return does not in any shape or form represent a 'loss'. It is simply cashflow on a small number of films in the overall slate.
"For example TT3D: Closer to the Edge will be a profitable film, but using the Liberal Vannin interpretation it has generated a 100 per cent loss!
"The investment (or expenditure) is made wholly upfront and the investment return (the income) arises over a period of time following release of the film.
"Using TT3D – all the expenditure went out in March – June 2010 the revenue back to the MDF will take at least 18 months to arise. But when it does, it will exceed the expenditure.
"The NX slate is a relatively new slate so is showing more expenditure than investment return – for example: The Shadow Line, The Decoy Bride, TT3D, Albatross and Ashes or, over half the slate, have yet to show any investment return, simply because they are not at market or if they are (TT3D) are at the beginning of the investment return phase.
If a Government Fund Manager spends £1 million on shares and gets no dividend for a couple of years, would the expenditure be treated as a loss? Absolutely not. Film is no different, save that it suits Peter Karran (and his unnamed, hidden 'advisors') not to understand.
"Unfortunately, this ignorance makes for the sensational headline. However, it is the sensational headlines that feeds the frenzy and will kill the business.
"Given the challenges faced by the Manx economy, that is simply a disastrous anti-business policy to pursue.
"The £200 million referred to as 'profit' is just that – long-term cash profit and excludes the £75 million local spend.
"The numbers also exclude the masses of positive off-Island coverage that we have generated.
"Most countries have a hunger for international visibility, that's just one more thing film brings.
"Not to mention diversity, incremental seasonal revenue and something just a little aspirational for our kids.
"But, the profit is cash in versus cash out – including the so-called loss making investments, made over the long term, 15 years.
"The Media Development Fund was set-up in March 2002, with a balance of £25 million.
"That balance is now over £33 million – so quite where the huge losses arise, I am not sure.
"I fully accept that reconciling the numbers is difficult, but the Public Accounts Committee did reconcile the figures as recently as autumn, 2010, and at no time throughout their investigation did they question the probity of any of the financial arrangements underlying the film business.
"A further final point. The entire £25 million original MDF balance sits in a wholly fixed deposit account, charged to the Treasury of the Isle of Man Government.
"That deposit matures on the last day of the NX contract.
"It is not at risk, never has been at risk and will remain intact as long as I have responsibility for it. No Manx taxpayer has funded the film industry, the total reverse is true.
"At a time when we are faced with outright hostility from the UK you would think the last thing we should do is fight each other.
"There is potentially another £200 million to be made from film and media, but maybe Mr Karran has better economic development policies that will raise our future revenues. Let’s hope so."
For Economic Development Minister Allan Bell's comments click here
