Comments on: Why Films Under $2m Can’t Catch a Break

By: Jeff Steele

Jeff Steele — Mon, 03 Oct 2011 21:05:19 +0000

Nothing in Hollywood is etched in stone – there are exceptions to everything. Bond companies don’t like bonding films under $2m for many reasons, but it mostly comes down to:
1. Fees: Their average fee is between 2% – 3% of the budget. So it becomes pretty insignificant, given the amount of work they have to undertake.
2. Cost of doing business. There are hard costs associated with doing every deal (e.g. legal) that don’t get covered by 3% of a low budget film.
3. Combustibility: Most low budget films fall apart before they close their financing or go into production, so that becomes a lot of wasted labor.
4. Risk: Most low budget films are made by less experienced or less scrupulous filmmakers who are prone to cutting corners and making mistakes. As insurers, bond companies don’t take-on undue risk.

Exceptions are usually favors to higher-budget filmmaker clients who happen to be doing a low budget film that needs bonding. Either way, just call them and see if they’re interested; if business is slow then anything’s possible.

By: frank

frank — Sat, 01 Oct 2011 20:45:24 +0000

Great post Jeff!! I was just wondering though. You say that any indie film under 2 million cannot get a completion bond. Is that some sort of financial rule etched in stone? I mean, if you had a 1.9 million dollar budget and everything else was in place, would they not give you a completion bond? And if so, why? Can you please elaborate on this point a little bit.

Thank you

By: Jeff Steele

Jeff Steele — Tue, 10 May 2011 06:41:53 +0000

Just get the film done; you’ll find your luck along the way. The stars won’t align themselves; you have to put an object in motion first.

By: George Monteiro

George Monteiro — Sat, 07 May 2011 00:23:37 +0000

Hi Jeff,
Love your blog and the exchange of ideas. The particular film I am trying to get funded could go either way, 2Mil or 250K depending obviously on how many bells and whistles I put on it and who is in the cast. Would I be better off holding out for all the stars to align or just getting the film done? It is a very unique and specialized subject matter that I am uniquely qualified to produce and once done I’ll never get another crack at it.

By: Jeffrey Allen

Jeffrey Allen — Sun, 13 Feb 2011 21:19:06 +0000

Jeff, I love the part about the “cash in brown paper bag”.
We’ve discussed the same syndrome in our prior blog “the Death of Dumb Money for Film Finance” on google.

By: Tweets that mention Featured | Jeff Steele's Film Closings -- Topsy.com

Tweets that mention Featured | Jeff Steele's Film Closings -- Topsy.com — Fri, 11 Feb 2011 08:58:43 +0000

[...] This post was mentioned on Twitter by A. M. Esmonde, Jeff Steele. Jeff Steele said: Why Films Under $2m Can’t Catch a Break – http://tinyurl.com/24mgxg4 (via @filmclosings archive) #indiefilm #filmfinance #producers #fb #in [...]

By: Matches Malone

Matches Malone — Tue, 30 Mar 2010 01:30:40 +0000

But you still have to find the $250K….

By: Stan

Stan — Thu, 25 Mar 2010 04:26:30 +0000

One thing to remember is a producer with a smaller budget is worth their salt when they can get accomplished what a producer with a larger budget just relies upon money to solve the problem – creative or logistical.

By: John

John — Thu, 25 Mar 2010 03:28:49 +0000

Hey Chris et al.

I’m sure these comment sections on the blog are moderated and I thought it was pretty cool that Jeff let your comment be in here and took the time to respond. So many places like Huffington Post would never allow a comment like yours to go through about Arianna.

kudos to Jeff. I don’t know any other site like this where a financier is willing to share intel on the state of the industry like this.

By: steelejeff

steelejeff — Thu, 25 Mar 2010 00:16:25 +0000

@Jane You are abosolutely correct. There are extremely professional and efficient ultra-low-budget producers out there that are just as effective as any high-budget indie producer.

In fact, probably even more so because you generally can’t throw money at problems to make them go away. I have not been addressing this demographic because I’ve been laying a lot of foundation in these posts. I plan to raise the level of discussion into more nuanced topics that you’ll find more relavent to your skillset.

Paramount has jumped on the $1m band wagon, and other studios will follow. As I said in this post, $250k is the new $2.5m, so if you already have that infrastructure (and relationships), then you’re ahead of the curve and this is a good time for you: there is a great convergence of accessible technology, distribution, and production values, coupled with lower cast costs, that will all work to your benefit.