Indie producers are on a relentless quest to find the elusive "final 20%" of their budgets. They've raised the equity, made the presales, maxed the gap, and still they come up 20% short. Even with a whopping 40% cash rebate! So why then are they still stumbling around trying to fill that final 20% of their budgets?! Because producers can't get out of their own way.
If you are planning on shooting in Hungary in the near future (or preselling to Eastern Europe), then you may find great opportunity as well as great opportunity for concern in the "very grave situation" facing the region.
I have this theory that film financing follows real estate: as goes real estate, so goes film. This is nothing I can quantify with statistics; it's a gut feeling, solidified over time, observational, not empirical. And, hear me out, what's got me thinking we may be seeing more film investing is an increase in the sale of U.S. Treasury bonds.
Recently, I was interviewed by Kingsley Marshall, contributor to Big Screen, Film International, Little White Lies, and Shook, for a story on film finance.Do you find this Q&A interesting? What additional information would you like to know about?Here is the Q&A from this article not yet out:Kingsley Marshall: How hard is it to find movie financing in 2010?JEFF STEELE: It's very, very tough out there for single-picture, indie films. There are about six entertainment banks left that are actively lending, down from 12 in 2008, and only a handful of gap funds, down from a zillion in 2008. Wall Street equity, like hedge funds, has pretty much abandoned the single-picture finance business as well, but is still present in slate financing structures. And yet, films are still getting made.Kingsley Marshall: How much is the credit crunch to blame?JEFF STEELE: The credit crunch definitely played a key part in the production freeze in 2009, where the streets of Cannes and Toronto were paved with dead deals. 2010's glut has to do more with (1) the plethora of bad film deals that were made during the go-go years of 2005-2008 that have barely recouped this budgets, (2) high net worth individuals not having the disposable income they once had (or thought they had), and (3) the lack of U.S. distributors (and P&A) available to the indie market. The credit crunch is definitely having a direct impact on the ability of foreign buyers and distributors to finance pre-sales and pre-sales deposits, which are critical elements in indie film financing.
Just to set the record straight from previous comments about one of the main reasons entertainment banks ignore film budgets under 10m.The traditional finance model (via senior banks and mezz lenders) does not willingly service films with budgets under $10m because there are numerous hard costs that (as a percentage of budget) cannot be reasonably sustained by low budgets.
Let me assure you - it's got everything to do with the state of filmmaking worldwide and no one is talking about it.