AFM: part I - who backs movies and why

last sunday i attended the poor-folks afm, i.e., the seminars. although it's fairly expensive to attend the conference, they offer seminars that are open to the general public. the two i attended were just $35 each. another perk of living in los angeles.

sunday's seminar was titled "who backs movies and why." from the program description:

Have you ever wondered what made an investor say yes? Is a great script enough, or can a killer idea be thwarted by a poorly thought-out business plan or budget? Players in packaging and film financing reveal why they say "No" most of the time, and what producers need to assemble to hear that elusive "Yes." Learn about current sources of financing; finding the right fit for your project; attracting interest from talent; and the do's and don'ts of approaching an investor.

• Moderator:
• Michael Donaldson, Partner, Donaldson and Hart
  
  
• Panelists:
• Holly Becker, Senior Vice President, Production, Sidney Kimmel Entertainment
• Cassian Elwes, Senior Vice President, William Morris Agency
• Bo Hyde, CEO/Co-Founder, Cherry Road Films
• Diane Weyermann, Executive Vice President of Documentary Production, Participant Productions

the star of the show had to be cassian elwes. he was smart, tough and straight to the point. bo hyde and diane weyermann were both also very informative, but holly becker was the weak link and seemed out of place and unprepared.

i took notes and although i don't pretend they're comprehensive, it's better than nothing if you couldn't be there...

-------------------------------

moderator: show me the money

cassian: overall current environment is very good for independent financing, lots of money available, however of course, “there’s no dumb money”. people are still looking for quality. agency packaging and managing of financing becoming much more prevalent; agencies are getting involved in distribution as well.

bo: cross-slate, hedge funding – average return 8-15% return with a couple of winners, couple of break-evens, rest losers/year (~8 film slate). with the right oversight and intelligence, investing in film can be as predictable and reliable as the stock market; lot more soft money now (part of the budget that isn’t being paid back; i.e., incentives from states, tax breaks, etc.)

moderator: what are you looking for?

cassian: to make money; stuff they won’t be embarrassed by – prestigious material; business that attracts business; e.g. 'bobby'

$5mil and under are hard to finance – and anything over that is really a studio film that someone has figured out how to make smaller; financiers aren’t as interested in doing the work on smaller films because the returns aren’t as obvious – lots of work to finance a film, so tendency is towards greater potential return films ('half-nelson' is a good example of small budgeted film they like)

however, the under $5mil films are the lifeline of independent film; hard to get financed but some of the best work comes from this part of the spectrum (i.e.,'monster's ball', which he helped put together).

holly: quality films obviously; wide-audience films; $20mil-under; political thriller, psychological horror film (eg: 'the others'); agreed that small films in the $5 and under are difficult to sell to financiers

bo: not niche focused; like to diversify; wide-audience/breakout returns obviously incourage; smart comedies, scifi thriller (southland tales), horror film (of course); his investors aren’t involved in production; more like a brokerage; passive investors (6-8); although they become less passive over the years!

diane: dramatic division: open to various genres so long as they can fulfill the social change/awareness doctrine – would consider horror and comedy. mostly have so far backed dramas (charlie wilson’s war)

moderator: what credit do you get on the films you finance?

diane: presentation credit, exec. prod credit

bo: exec prod. producer also if involved in production. production company resentation credit

holly: presentation; exec prod for syndey depending on production

cassian: none; sometimes special thanks if anything; credits are hardest part of business; everyone wants ‘em; area of most negotiations; biggest issues on credits are when no one is clear about them up front

moderator: who gets control of the films?

diane: fully-financed, they own, so lots of control – but they always are very collaborative with filmmakers; never had to wrest control away from directorroducer; not a heavy foot – but don’t just write checks; often directors for them do have final cut – and often they’re the most collaborative

cassian: control is a big issue; %95 of control ends with financiers; but he fights to give filmmakers a chance to prove their vision; if studio and test audiences have problems with film, that’s when control issues arise; many directors with final cut are still very respectful of studio’s desires (else they won’t support your film); mostly control is used for perhaps one small thing they’re very passionate about
its really about distribution rights – which is the real control of the film, regardless of owning copyright. unless you’re creating a library it’s not as important as how you get paid by the film and it’s success.

bo: do like to give directors as much freedom as possible, however final cut can be dangerous; the company owns copyright and ownership

holly: own films that they fully finance; share with partners

moderator: tips for pitching?

bo: usually aren’t getting involved at pitch level; develop novels and adaptations; aren’t usually just paying a writer to develop a pitch; are looking for hyphenates who can work at reduced rates; the more elements attached the better for them – rather than starting at scratch

diane: 1st step would be submission of treatment/budget; must go through an agent or lawyer

holly: they don’t do development; independents aren’t doing development as much; you should at least have a pretty good script done and additionally some talent (producer/director) with experience attached; very important to bring legitimacy with affliations

cassian: arrive with a plan! ideas for director/cast/budget/locations/etc. he works on 25-30 films a year, the better prepared you are, they more attractive you are.

no long pitches! (keep it simple – 5 lines, but be prepared to give more info if they’re interested)

they’re an agency – don’t develop; they’re looking for ready scripts with a plan; you should believe your script is amazing and doesn’t need work – even if it does – they’re not looking for more work up front

don’t bullshit – be as open and honest as possible; he knows everyone and whats going on; they’ll find out

find an appropriate meeting – don’t pitch in the bathroom; approach respectfully; politeness counts for a lot

not a bad idea to have list of actors/directors in mind - his job is to have his clients working; however very few movies they work don’t have a client of theirs; as long as it at least involves someone they represent.

what’s the next step (after pitching)?

cassian: find line producer; work on budget; package the talent – arriving with a broken-down script is a bonus – at least as a starting point

diane: just the addition of the social action consideration; does take time – some folks come in wanting to get started right away – but financing takes time

audience questions:

why would investors move from the safety of the stock market to film risk?

bo: investing in wall street (tech) is also risky; and of course, the glamour

cassian: if you can be smart and mitigate risk, and have fun making films, it’s a more interesting way to develop your money and also see a real response with your investing. it’s not just watching your stock ticker.

would you fund unknown directors?

cassian: at least half the films he works on have young brand new directors; worked on “everything put together” and “monsters ball” (marc forrester). ball changed his life and lionsgates

what’s the writer’s profit participation and where can you go in the door w/o an agency?

cassian: writing is the hardest part of the business; writers are always first ones taken off; everyone/studio wants to rewrite; guys gets $100,000/wk to polish; he likes scripts that the director is either also the writer or very involved, usually results in a more interesting project

bo: do read outside of representation sometimes; also like working with writer/directors; independent is about getting a vision on screen so pure writers aren't as in demand

[note: all confirmed that you need representation to get in the door. no getting around that. "it's not that much to require when you’re asking for millions of dollars for a film"]


how do you verify your financial backers?

cassian: do not sign anything with anyone until you a lawyer/manager/agent who can advise you; be very careful

michael (moderator and lawyer): trust your gut; no lawyer can protect you from a producer; they can’t write a “tight” contract

completion bond – how do you get it, do you need it?

cassian: yes you must have it – especially if you have multiple funding streams; you need that objective oversight; many many times the bond company has been been very helpful; they know what it will really cost and they watch everything; money very well spent

are american films less attractive now with so much riding on foreign sales?

bo: yes, you try to lay off risk on foreign – if you can only get %20 on foreign it’s a lot harder

cassian: napoleon dynamite – only $1m overseas but made so simply it was worth the risk of only making money in usa

-------------------------------
up next: AFM - part II: the 'everything you wanted to know about film festivals' seminar.