It has been quite the season for Declan Caddell as Crusaders manager, who has successfully secured the north Belfast side’s Premiership status for next season after a penalty shootout victory over Annagh United.
The Crues had a one goal lead after the first leg, but Philip Donnelly’s penalty levelled the aggregate score after just five minutes before Lee Upton edged Annagh ahead.
In the 71st minute Stewart Nixon equalised in the play-off and sent the game to extra time, but neither side were able to find a goal.
During the penalty shootout, Musa Dibaga saved two penalties as the Crues sealed their survival and avoided what would have been just their second relegation in the club’s history.
“Credit to Annagh, they put it up to us,” Caddell told BBC Sport NI.
“For me, that game summarised our whole season in terms of a wee bit of bad luck, not playing for a full 90 minutes, injuries, everything relying on a last gasp, last minute, and credit to Dibaga as well for stepping in and making a difference.
“I’m just relieved to get over the line because it’s been a difficult year. Who would be a football manager, eh?”
Last year, studios and Hollywood labor unions lobbied hard to ensure animated movies and shows could compete for California’s expanded film and television tax credit program.
The payoff came last week, when three animated movies were among the nearly 40 film projects that received a production incentive in the latest round of awards, the California Film Commission announced Thursday.
Walt Disney Co.-owned 20th Century Studios received $21.9 million for “The Simpsons Movie 2,” Disney Entertainment Television got $3.5 million for “Phineas and Ferb” and DreamWorks Animation was awarded $24.7 million in credit allocation for a yet-untitled animated film.
The three are the first animated feature films to receive tax credits from the state of California. (Last month, two animated shows — a spin-off of “Rick and Morty” and “Stewie,” which branches off from the “Family Guy” cartoon — also received tax credits.)
I spoke with DreamWorks Animation Chief Operating Officer Randy Lake about the award, which he called a “potential game changer” for the Glendale-based studio known for the “Shrek” and “Kung Fu Panda” franchises.
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“Unlike live-action, our projects are years long,” he said. “You’re talking about not just a job for six or nine months on set. It’s literally three or four years that these projects can take. It’s long-term employment.”
Like most of Hollywood, the animation industry has suffered from the effects of the 2023 dual writers’ and actors’ strikes, as well as the retrenchment in studio spending after the initial rush to invest in content for streaming services.
And like much of U.S. film and TV work — particularly in California — the animation business has been deeply affected by the increasingly rich tax credits offered by other countries.
Over the last 15 years, countries including Canada and Ireland have slowly built up animation hubs, aided by their local talent and lucrative production incentives specific to animation and visual effects.
DreamWorks, too, has outsourced work to partner studios, particularly in Vancouver and Montreal, as costs in the U.S. have increased and studios face pressure to rein in their production expenses while theatrical box-office revenue has become less reliable.
Just three years ago, DreamWorks cut about 70 jobs across its corporate functions, feature films, TV and technology departments. In 2024, Disney-owned computer animation studio Pixar laid off about 175 employees as it pulled back on its production of streaming series.
But with the recent tax credit allocation, DreamWorks will hire about 100 people in California for its upcoming untitled film. Those jobs would probably would have been outsourced to a third-party studio, Lake said. Keeping all of the jobs on that film in California helps improve collaboration among the teams and foster more creativity, he said. Today, DreamWorks has about 1,000 employees.
To understand why the new incentives are meaningful, consider that a DreamWorks Animation movie similar to the one that received the credit will typically have a crew of about 400 to 500 people.
That film is a big feature, though Lake declined to share details since the project hasn’t been announced.
Both the Animation Guild and studios have pointed to the incentive as a way to bring back animation jobs to the Golden State.
“Studios have been chasing animation tax credits in other states and countries for years, so it’s incredibly rewarding to see them use California’s for the very first time,” Marissa Bernstel, a trustee on the union’s executive board and member of the task force that helped lobby for the expanded production incentives, said in a statement last week. “The results feel very real, and I’m excited to see what future employment opportunities the incentive inspires.”
Lake said DreamWorks hopes to take advantage of the state incentives for all of its full-budget films.
“We’ll be applying for the next window,” he said, adding that he hoped they will be successful so “we’ll be able to have more and more of our films be fully produced in state. That’s the goal.”
Stuff We Wrote
Film shoots
Number of the week
Lionsgate’s “Michael” had a massive opening weekend with just over $217 million in global box-office revenue. In the U.S. and Canada, the Michael Jackson biopic hauled in about $97 million, far surpassing studio expectations.
The film, which stars Jackson’s nephew, Jaafar Jackson, as the late singer, chronicles the pop star’s rise from his early days in the Jackson 5 through the growth of his solo career. The movie ends in 1988 while Jackson is on tour for his hit album “Bad.”
The premiere for “Michael” marks the biggest domestic opening for any biopic, musical or otherwise. The 2015 movie “Straight Outta Compton” previously held the record for highest opening weekend total for a musical biopic, with $60 million in the U.S. and Canada, followed by the Queen biopic “Bohemian Rhapsody” in 2018, which had a $51.1-million domestic opening.
Critics’ reviews of “Michael,” however, were largely negative. Many noted the plot sidesteps the child sexual abuse allegations against Jackson and said the film presents a more one-dimensional view of the singer.
An earlier cut of the film did end in 1993 and addressed the allegations, but that ending had to be scrapped due to a clause in a legal settlement with an accuser that stipulated he could never be pictured or mentioned in a dramatization of Jackson’s life. Jackson and his estate have denied that the pop star abused children.
What I’m watching
I finally finished the Hulu series “Paradise” this last week, which kept me guessing about literally everything all the way until the end. I’m interested in seeing where this genre-morphing show goes next season.
Asset-light companies reshape private credit as lenders embrace intellectual property collateral, despite valuation challenges, legal risks, and AI-driven obsolescence concerns.
Asset-light companies are changing the world of private credit.
Unlike businesses that can rely on a heaping basket of assets like inventory, equipment, and real estate as collateral for private direct lending, these companies tend to use some of the most illiquid and difficult-to-value intellectual property (IP) as collateral.
“Capital is increasingly being formed around asset-based finance [ABF] strategies, but it’s still relatively early innings of where ABF will grow to within private credit markets,” says Brian Armstrong, managing director, US Direct Lending at Benefit Street Partners. “We believe ABF has the potential to be one of the fastest-growing asset classes over the next five years.”
Private-credit assets under management are expected to exceed $2 trillion this year, according to Moody’s 2026 Global Private Credit Outlook, published in January, which predicts they will approach $4 trillion by 2030. “Corporate lending still makes up most of the private credit lending, but momentum is shifting towards ABF,” the authors wrote. “While more difficult to track, ABF has the potential to eclipse the size of more traditional corporate lending.”
Pledging IP for collateral is not new; specialty retailer J. Crew used a mix of IP and other assets as security for more than $540 million payment-in-kind notes about a decade ago. The difficulty in using IP as collateral has been obtaining a fair valuation of assets such as data sets, proprietary software platforms, and patent and trademark portfolios.
Approaches to doing so include discounted cash flow analyses of the asset, benchmarking against comparable transactions, and estimating the asset’s replacement or reproduction costs. Often, businesses rely on an independent third-party valuation firm such as Alvarez & Marsal, Holihan Lokey, or Kroll.
One of the greatest concerns of ABF lenders, however, is the transfer of IP out of the basket of pledged assets.
“In many deals, covenants permit the borrowers to certify in their reasonable commercial discretion what the value of a given asset is,” says Jake Mincemoyer, partner and global co-head of Debt Finance at law firm A&O Shearman. “That’s what has gotten lenders very concerned, given a handful of transactions where borrowers have taken advantage of that and taken a crown-jewel asset out of the collateral package and levered it up elsewhere. So, it’s really been how do we make sure that if we’ve lent against it, we keep it?”
A prime example is the aftermath of J. Crew’s 2017 transfer of pledged IP to a new, unrestricted subsidiary, which was excluded from the parent company’s restrictive covenants and debt limitations and enabled it to raise further capital by pledging the same IP. What has become known as the “J. Crew Maneuver” has led to the inclusion of a “J. Crew Blocker” provision in debt covenants that prevents borrowers from transferring material assets into unrestricted subsidiaries.
That safeguard has not stopped borrowers from executing a variation on the theme, however. In February, Xerox moved IP assets pledged to existing debt to a joint venture in which it owns a 49% stake and raised an additional $450 million in funding. That minority stake prevents the joint venture from being considered a subsidiary under its debt documents, according to Ropes & Gray’s Distressed Debt Legal Insight, published in March.
“Borrowers have found more creative ways to operate within their credit documents, which has driven lenders to be more careful and thoughtful around tightening any unintended flexibility,” Benefit Street’s Armstrong says.
Transatlantic Divide
As in real estate, the ease of obtaining ABF while pledging IP as collateral depends on location. North America is approximately five years ahead of Europe due to EU law regarding governance of intellectual property and its use as collateral.
For example, under the European Parliament and Council’s Directive/24/EC, the original software developer, whether an employee or a consultant, owns the copyright to their code, unless their contract states otherwise. But proving the provenance of software code can be difficult, especially if it contains open-sourced content and third-party APIs.
Steffen Schellschmidt, Clifford Chance
“The market is not fully prepared yet to take on the whole financing of software, given the uncertainties around ownership,” says Steffen Schellschmidt, Munich-based partner and private credit specialist at the law firm Clifford Chance. “You have to do a comprehensive and costly due diligence on this.”
This has led most European private lenders to focus more on registered IP like patents and trademarks, whose ownership is easier to determine.
Secondly, and unlike in the US, EU law does not permit the inclusion of software IP in a floating charge, Schellschmidt notes: “So, once security is perfected under European law, assets can still be transferred, but their value is diminished as they remain subject to the existing pledge.” That creates a funding gap for businesses that fall between early-stage startups and large, successful companies in pharmaceuticals and other knowledge-based industries.
“That is why we don’t have a Silicon Valley,” Schellschmidt contends.
The EU is working to eliminate the funding gap. As part of its Strategic Plan 2030, the European Intellectual Property Office (EUIPO) and the European Commission brought together policymakers, IP offices, financial institutions, business leaders, and subject-matter experts in an IP-Backed Finance Steering Group and Technical Working Group on IP Valuation at the end of last year.
The Technical Working Group is mandated to develop an IP Finance Roadmap to “help businesses across Europe, especially startups, scaleups, and SMEs, access finance based on the value of their intellectual property.” The Steering Group will then review the roadmap and shape the EU’s strategic approach to IP valuation and financing, according to EUIPO statements.
AI Speeds IP Obsolescence
AI is affecting ABF, especially at businesses that plan to pledge enterprise software as collateral.
“Whether an asset is tangible or intangible, it will decay over time. Nothing holds all its value forever,” says Mark McMahon, managing director and global practice leader at Alvarez & Marsal Valuation Services. “If it’s a mine, it’s called depletion. If it’s a hard asset, it depreciates. If it’s software or another form of IP, it’s obsolescence.”
Computer code-writing AI engines, such as Anthropic’s Claude Sonnet and Microsoft’s GitHub Copilot, are only shortening the window to obsolescence for existing software stacks and lowering the value of software as collateral as market competition heats up due to lowered barriers to entry.
“The risk associated with a long-term software revenue stream might not necessarily be today what you estimated it to be even half a year ago,” McMahon notes.
However, AI should not be considered the death knell for software’s value as collateral, A&O Shearman’s Mincemoyer says.
“The same way that people figured out how to come up with all kinds of very creative and useful software programs that then they could package as SaaS businesses and really be constructive in the economy, I have to think that AI tools are going to allow even greater advancements and even greater new businesses and new tools as people are using them,” he says. “Does that mean the question is, Will the three or four people running the most powerful AI tools take over everything? There’s a risk of that. Do I think that actually will happen? Probably not.”
That said, the increased speed of software development should lead to more active management of collateral. As Benefit Street’s Armstrong advises: “If your IP collateral could conceivably be directly impacted by AI, you should certainly more frequently review and revalue that collateral to ensure your loan continues to be covered by the value.”
Despite these trends, ABF lenders’ appetite to accept various types of IP as collateral is growing. “Over the last five to 10 years, I have seen a large increase in financing being done where lenders are comfortable lending on nontangible assets,” Mincemoyer says.
Even as California’s soundstages suffer from a slowdown in local production, the local economy may get a boost from the state’s expanded film tax credits.
Medical drama “The Pitt,” a “Family Guy” spin-off and a kids’ science competition show from late-night host Jimmy Kimmel are among the 16 shows that received tax credits for filming in the state, the California Film Commission said Wednesday.
In total, the projects represent $871 million in qualified in-state spending and are expected to generate $1.3 billion in economic activity in California. More than 4,500 cast and crew members will be employed across the 16 shows, along with more than 50,000 background actors, the film commission said.
New to this round of awardees are animated shows and competitions, which were added to the film and television tax credit program during its revamp last year. Under the program, producers can receive up to 25% of qualified production expenses back in the form of credits that they can apply toward tax bills they have in the state.
“California’s creative economy isn’t just part of who we are — it helps power this state forward,” Gov. Gavin Newsom said in a statement. “From the folks on the soundstage to the people designing the sets, these are jobs that anchor communities.”
HBO Max’s “The Pitt” received a credit of $24.2 million, while “Stewie,” a spin-off of Seth MacFarlane’s irreverent adult cartoon “Family Guy,” was awarded $6.4 million. Kimmel’s “Schooled!” competition show, which pits young scientists and their experiments against one another, secured $6.9 million.
Since the state’s production incentive program was bolstered last year, more than 100 films and TV projects have received tax credits.
But it has taken a while for those shows to jump-start local production, which has seen a sustained slump since the pandemic, the dual writers’ and actors’ strikes in 2023 and spending cutbacks at the studios.
That lag has affected the business of local soundstages.
For the first half of 2025, the average occupancy rate at Los Angeles County soundstages was 62%, slightly lower than the 63% average recorded in 2024, according to new data from the nonprofit FilmLA, which tracks local production.
Those figures mark a significant decline from the average occupancy rate of 90% seen from 2016 to 2022, according to FilmLA data.
That’s been a problem for local soundstage operators, which had aggressively funded development of new properties or acquired them only to see production slow.
