FilmNation COO Milan Popelka tells Arab producers that there’s more money out there than good projects, but that capital is very specific in what it’s looking for.
Dubai Film Market’s finance panel told a packed audience of Arab filmmakers and producers that there is an untapped well of financing out there for those disciplined enough do their homework, be realistic and focus on universally resonant stories.
“The good news right now is that capital is a commodity. There is more money out there looking to find good projects than there is good product,” insisted Milan Popelka, chief operating officer of leading production and sales outfit FilmNation Entertainment. “So if you can put together good material, you’re in a really great spot. But that capital is very specific in what it is looking for.”
“It is really important to understand whom it is you are sitting across the table from,” advised John Hadity, executive vice president, EP Financial Solutions, which lends money against the promise of tax incentives.
“There are some investors who really did not care about the story. They just want to hear how their investment will be protected. But there are other investors who didn’t care that much about the economics and much more about the story, and the director’s passion. Those are completely opposite ends of the spectrum and there is everything in between. You have to do your homework because it will be different every time.”
“If there is any formula I would have to bet on, it would be people every single time,” added Popelka. “Everybody always says ‘X percent of movies lose money’. But if you start to divide the total number of films up by producers with a track record and financiers who have a sensible approach, you’ll see such a disparity. You want to work with thoughtful people who are disciplined, that do their homework and that ask for advice when they don’t know how to do something.”
“There is no short cut,” agreed Mohammed Hefzy, chief of Cairo-based Film Clinic. “It is about how to create more value in the market. You need to have a realistic financing plan and recoupment plan. Maybe there is a way to attach an actor who has value in the TV market. There is also the emergence of the VOD market, which is making that side of the value chain really quite significant.”
“In the thirty plus years, I have worked with a lot of first-time directors and with great success. But what scares me are first-time producers,” cautioned Hadity. “Because the producer is the CEO. They’re the ones managing the investment, managing the director and managing the business enterprise. They are there to support the director on the one hand, on other hand their primary responsibility is to protect the investment. Because the last thing you want to do to say with an equity investor is to say ‘I’m really sorry but you are never going to get your money back’”.
Added Popelka: “That is not to say that first-time producers can’t be trusted with a film. They just have to know where they are going and have a strategy. People in a room can read that very easily. If you come in with incomplete bits of information and you pitch a $1m movie to a company that makes $10m movies, and someone asks you where you want to shoot and your answer is sort of discombobulated, people can pick up on that very very quickly.
“It’s people that ask questions and have a plan, know what their movie is before they even walk into a room…those are the producers you want to work with. It’s the one that pretend to know everything and just answer off the cuff without doing their homework – that is when you really get into trouble.”