The keys to unlocking film finance
Financing independent films is notoriously tough, so how can new producers attract backing? Geoffrey Macnab speaks to the seasoned professionals
In an industry where accessing finance can be tough even for veterans, rising producers can find that funding their projects — and even securing meetings with potential funders — is a struggle. “We were all young at one point and it’s not that we’re trying to be mean, but from a business [viewpoint] and being practical, it’s not possible to meet with everyone,” says Christopher Woodrow, CEO of New York-based production and investment outfit Worldview Entertainment.
New producers who manage to secure meetings can scupper their chances at the outset by not preparing or behaving properly. One common mistake, says Jean-Baptiste Babin of French outfit Backup Films — which has packaged the financing and distribution of more than 100 films since it was set up in 2002 — is for new producers to “talk all the way” and forget to listen. Babin talks of having producers “camped outside of our office in Cannes so they get a meeting”. When he finally sees those producers, “They have no understanding whatsoever of how you could be helpful to them,” says Babin, adding that often they do not follow up on the meetings.
UK producer Gareth Unwin of Bedlam Productions, whose credits include The King’s Speech, laments a tendency among some newcomers to describe themselves as “creative producers” who do not really understand finance. “My response is almost always, ‘In that case, you’re not a film producer.’” The inference is clear — every self-respecting producer should know the nuts and bolts of co-production, accessing soft money, working with tax credits and so on.
At the same time, financiers are looking for strong material. If a project is well packaged and has commercial potential, they are unlikely to complain just because a producer doesn’t have a track record. As one leading US agent puts it, “The way I was trained as an agent was that you’re supposed to return everybody’s calls. You never know who is going to become what. The call you don’t return ends up becoming the biggest producer five years down the road.”
While the agent advises newcomers to be bold, it doesn’t pay to make promises that cannot be kept. “If [producers] say or promise something, make sure you deliver,” warns Woodrow. “There’s a lot of money on the line, and no-one likes to be disappointed.”
Financiers will soon lose patience if a producer claims prematurely or falsely to have talent attached. Nor are they impressed by overly optimistic finance plans. “Producers overestimate what they can get from regional or federal funders. Also, what they can get as pre-sales out of the market,” says Daniel Baur, partner and producer at German finance and sales outfit K5. “Maybe the biggest mistake we see from first-time producers is they come in with too-high budgets. You can see a $5m or $10m budget for a project that should cost $1m or lower.”
“There is a lack of realism in what newcomers put forward,” agrees Adrian Politowski, founder and CEO of Belgium-based producer/financier uMedia. “This translates to the finance plan, the talent wishlist and the understanding of the market value of the film.” Politowski argues that “it resonates” far more with financiers when producers are honest.
“Imagine that cast all of a sudden goes to a studio film and is not available any more, a lot of producers might delay telling financiers because they’re scared of losing the financing,” Politowski adds. “I think that on the contrary, if you’re a producer and you’re upfront about the problems, it shows confidence and that you know what you’re doing. It allows the financier potentially to help you.”
Financiers agree that newcomers can help their progress by surrounding themselves with experience. As Baur puts it, they need “an angel” to guide them, such as a more experienced producer or an entertainment lawyer.
“I always advocate getting an early legal view. It doesn’t have to cost a whole hill of beans to sit down with a lawyer and say this is how I am imagining putting my film together,”notes Unwin.
On the newcomers’ side is their youth and enthusiasm. Bob Benton of UK financier Bob & Co points out new producers do not have “the inherent cynicism” of some of their older counterparts.
“They haven’t yet been totally jaded by this business,” agrees Nigel Thomas of UK financier and production outfit Matador Pictures. “They are keen and enthusiastic. Provided they approach everything with the right attitude, everything seems to go quite well.”
Producers without a track record may struggle to establish a foothold but are an essential part of the chain. What they need to remember, financiers caution, is making the film is only a part of the story.
“We’re most impressed by the ones who can see a project through from development to delivery,” says Hilary Davis of UK sales company/financier Bankside. Her remarks are echoed by Paul Brett at Prescience. “It’s not that difficult to finance a film, it’s not that hard to make one,” Brett declares. “The real trick is to get someone to see it.”
FINANCING TIPS FOR NEW PRODUCERS
“Find the hook or special sales pitch on your project. If you can’t sell or pitch it in a fantastic way, nobody else will be able to.”
Bob Benton Bob & Co
“For someone who is young, they’re far better off co-producing or co-financing a project with a more experienced producer or financier and build from that — to show investors they know how to make money and then in time to branch off on their own.”
Christopher Woodrow Worldview Entertainment
“Be realistic and upfront about your project. Financiers are seasoned enough to see through it.”
Adrian Politowski uMedia
“There always needs to be an understanding of the different types of finance and the underlying principles of finance… equity, debt and the different derivatives of debt financing.
“It doesn’t really require higher maths, just a ready acceptance that this is a required skill.”
Gareth Unwin Bedlam Productions
What can new producers do to keep hold of the upside in their projects? Geoffrey Macnab reports
Opinion among financiers is sharply split over how much ‘upside’ newcomers can hope for when they make a film.
One commonplace belief is that new producers need to prove themselves — and will often have to sacrifice their own financial position in a movie to do so. “When you’re a new producer, you need to get your credits and your stamp before you can also be aggressive,” says Faye Ward, a senior producer at Ruby Film and Television.
“They should stick to trying to get a decent fee and use their first films as calling cards,” suggests Christine Corner, a partner in the media and entertainment group at accountants Grant Thornton.
Daniel Baur of K5 points out that many first-time producers do not “earn a single dime” on their first movie. “The movie is so important you would rather put the last $50,000 into the music or the colour grading, whatever is missing — and there is always something missing.”
Others argue that investors and financiers want producers to have a stake in their own films because that is the best way to motivate them. “To take the upside away is to play into the hands of the people who have no great interest in the further success of the film but have just taken their fee for getting the film made,” says Bob Benton of Bob & Co.
Whatever the case, new producers are warned they should draw up finance plans that protect their own position. “Our golden rule is that if you can afford not to use the expensive money — the equity, the gap financing — don’t actually go and see them,” states Backup Films’ Jean-Baptiste Babin. “The best way to keep some of your upside is to optimise your soft money. Get as much cheap money in your financing plan as possible.”