Film Financing: How to Find the Right Partners and Make Sure You’re Protected
By Dr. Ted Baehr, Publisher, with Dr. Tom Snyder, Editor
The Producers Guild of America’s panel on film financing at its “Produced By” conference held at Paramount Studios in Hollywood last weekend looked at finding the right partners and Return on Investment.
The panel members included Ashok Amritaj, Chairman/CEO of Hyde Park Entertainment Group (THE YOUNG MESSIAH and GHOST RIDER: SPIRIT OF VENGEANCE); Charles D. King, Founder/CEO of MICRO (MUDBOUND and FENCES); Jessica Lacy, Head of International & Independent Film for ICM Partners; and, Bill Mechanic, Chairman/CEO of Pandemonium Films (HACKSAW RIDGE and CORALINE).
Moderating the panel was Gary Lucchesi, president of the Producers Guild (THE LINCOLN LAWYER, the UNDERWORLD franchise, and RUNAWAY BRIDE).
Jessica Lacy, an agent, said foreign sales are becoming more difficult and many of the television and digital distributors people used to sell their movies to have moved to producing their own movies in house, so they’re not in the acquisition business any more. This means you have to bring your projects in early, at the pitch stage, she advised.
Jessica also said the mid-range movies are shrinking and now a $2 million budget is considered a mid-range budget when, only several years ago, it was considered really small.
Ashok said the focus on film production has changed into producers not only making movies, but also producing music, TV and digital content.
Bill Mechanic said the problem today is that the top people heading up the media conglomerates aren’t filmmakers. He said the bigger the movie it is, the better it is. He’s done HACKSAW RIDGE and BRAVEHEART in the $60 million category.
“I grew up with movies that have some spectacle to them,” he noted, citing movies like David Lean’s LAWRENCE OF ARABIA. “Big is not bad, small is not good. Good is good, and bad is bad.”
Charles King said analytics and data are the best tools for producers.
Ashok said there are only three major companies still acquiring movies, Lionsgate, Global Road and STX. Jessica says all three of them call her every day looking for films.
Mechanic said Netflix doesn’t give him as much artistic freedom, but Ashok noted Netflix is making 60 movies a year to be distributed around the world, so you have to fit into their model. Amazon is doing the same thing. Jessica noted that Netflix is no longer buying things they don’t make themselves in house.
Jessica pointed out that agents are becoming more like producers, bringing the money and all the elements together for the movie. Ashok said it’s important to ask yourself how do you get to the customers for which your movie is intended.
Mechanic said people today make two types of movies. One is movies for everyone, like the big Marvel movies. The second is movies for some niche audience, such as THE BOOK CLUB for older women. The biggest audiences now are Hispanic and black, he noted.
Mechanic added that, in the first two quarters of 2018, China’s box office surpassed the United States and will continue to grow bigger.
Charles said everything depends on proof of concept. You have to present your vision to the people who might finance your movie.
Charles explained that his model is to put 75% of the money into the movie, get 25% from the studio, and get all the P&A from the distributor.
“Development [of movie projects] takes time,” he noted.
“Studios need to [keep up] with the marketplace,” he added, mentioning the fact that Disney is so successful right now because it’s doing new and bigger things with the properties it owns and is now developing its digital platforms. “Some of the more traditional studios are playing catch-up.”
“Return on Investment is the most important thing,” Ashok asserted.