Winston-Baker / Variety Film Finance Forum
I attended the film finance forum today, in Century City. In general, I find these forums to be informative, but not necessarily educational, whether I’m sitting on a panel or not.
However, unlike any other finance forum, they did offer a 3 hour crash course on film financing fundements, so that any lay-producers could better contextualize the large amount of technical/financial information. Kudos to the Winston-Baker team for that! Jeanette Buerling represented Magnet and indie equity.
For those who didn’t attend, the overall consensus, was that P&A and independent US distributors are the holy grail of indie filmmaking. As I’ve stated in previous posts, buyers want to know: (1) where is the equity coming from, and (2) who is the distributing it (and more specifically, how many screens at widest release).
Without US distribution, you generally won’t get the bigger numbers out of foreign (unless you have star power), which means budgets need to come down to a reasonable amount (like $10-12m), where a $2m domestic video sale makes financial sense. Many were recommending zeroing-out the value of domestic (in your finance plans), and making your movie under the assumption that you’ll make nothing from the US. While not entirely realistic, it does instill a good discipline. Nonetheless, senior and gap lenders are still doing single picture deals without domestic distribution in place.
In other news, “performance-based” slate financing is still dead but cross-collateralized, multi-picture, senior bank facilities are alive and well. Get’m while they’re hot.
The highlight for me was when one panelist (a guilty contributor to the film bubble) commented at the beginning that too many movies had been made over the past few years that shouldn’t have been made; but then at the end, told an audience member that he’d get their movie made if they had 50% equity. This is called: a finance plan looking for a film, instead of a film looking for a finance plan.
Once a junkie, always a junkie.
I tweeted last week that Japan and Greece were becoming virtual-zeros on my sales estimates, but now there’s a sense that South Korea and Russia are too, and that Latin America is paying 30 cents on the dollar. This would imply that budgets need to come down that much further. The good news is that this downward pressure is also applying to cast salaries. These days, there’s little reason to offer an actor equity/profit participation in your indie film, unless you’re getting them for way under their rate and they’re (1) playing a character type/genre they’re known for, and (2) demonstrably getting the move made.
All in all, no big surprises.