Sunday, April 01, 2007

Would you produce it?

If anyone has a good idea for film financing, please tell me.
John Sayles, Thinking in Pictures: The Making of the Movie Matewan

Recently, I overheard an aspiring filmmaker and executive producer talking. The filmmaker asked the financier: "I'm making a short film. What kind of short do you think I could get financial backing for?" I wanted to pause the conversation, pull the filmmaker aside, and get him to ask himself the same question... as if he were a producer: would he produce his own short?

Financing is and always has been the most painful issue filmmakers face. The problem with filmmakers is that they're filmmakers, not producers. Everything would become clearer if they could only take off their filmmaker hat and put on their producer hat because producers want to invest in films that will make them money. Sure, film is art, with varying degrees of beauty (and beautiful people), but when the crew is wrapped, the game is still about how much money the financiers are going to make from their joint venture. Art or not, film is also commerce.

Oddly, filmmaking is similar to real estate: instead of buying a house for $100,000 and selling it for $500,000 after two years of equity appreciation, you're creating $500,000 of equity with only $100,000. And, just like real estate, you make money when you buy a product at a low enough price. Films like The Devil's Own (1997) with Harrison Ford, Brad Pitt, and director Alan J. Pakula—three of the hottest talent and crew (at the time) and an exhorbitant $90 million budget to prove it—are doomed before they ever leave the starting gate. Buy low, sell high. [Ray reminded me that films are also unlike real estate because they depreciate in value. While true, a filmmaker's library, if worthy enough, can eventually be sold for gobs of cash. Just ask Roger Corman who sold his 400-film library to Disney.]

The magic formula for financing films is the rule of four: a film should only cost a fourth of what it's expected to make in gross profits. Unfortunately, that could mean a Come To Jesus meeting which filmmakers don't want to hear. But that's the reality of it—if a film is only going to make $400,000, then that film's budget can't exceed $100,000. Is it even possible to make a film for $100,000? A good film? Even a great film? Of course, some successful films have been made on less, but they are by far the exception to the rule, mainly because their total costs soar after a major production company picks them up and massages them up to spec. Robert Rodriquez loves touting that he made El Mariachi for only $7,000, but if you include the costs of post-production sound, distribution, and advertising, the total bill probably exceeded $500,000.

Back to my eavesdropped conversation—what kind of short do you think an aspiring filmmaker could get financial backing for?

From a producer's point of view, the answer should now become obvious: except for some generous patron of the arts, filmmakers wouldn't likely get any financial backing because short films don't make money. There's no market for shorts... so why would anyone want to put money into them? (Unless you're going for the Academy Award for Best Short... but if you do that, all bets are off.)

At the heart of this financing conundrum is risk assessment. If I wanted to grow my money, I'd invest in stocks, real estate, or I'd build a business. While producing a film is similar to real estate, investing in films is similar to the stock market. You can't win on every stock you buy, but if you diversify your risk enough, you'll cover your ass by releasing Kevin Smith's tanker Jersey Girl with Ed Sanchez's runaway hit The Blair Witch Project.

From a producer's eyes:

  1. Short films cost less... but aren't marketable, and are a higher risk investment than investing in a feature.

  2. Feature films without named talent cost less... but aren't as marketable as features with named talent, so they're a higher risk investment.

  3. Low budget feature films cost less, but their usual low quality makes them unmarketable, and thus riskier.

Strange as it sounds, if you want to produce really low budget films by cutting costs on actors, sound, editing, post-production, etc., then—in the eyes of a producer—you're actually decreasing your chances of getting financing.

Producers understand money, which breeds this singular truth: if you can convince a producer your film will make them $50 million, you can easily ask for $10 million to make that film. Of course, $10 million sounds like a ginormous budget to an aspiring filmmaker, but to a producer, that pile of gold assures them they're doing everything possible to protect their $50 million jackpot. New filmmakers operate under a false ceiling about how little their film is actually worth, but a film's ability to turn a profit, not its budget, is all that really matters to a producer. Budget is an afterthought, like a pricey insurance policy, which buys them peace of mind.

Thus, quite simply, the barriers to getting film financing are:

  1. Find a money-making film idea

  2. Convince producers it's a money-making film idea

  3. Make money with that film idea

At San Francisco's Classically Independent Film Festival, I asked Kevin Smith, "What advice would you give aspiring filmmakers?" After thinking for a moment, he said, "Make sure you have a killer script. That's your secret weapon."

Great stories yearn to be retold... and that means money to any film producer. So ask yourself, if you were a producer, would you produce your own film?

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