Trying to gauge the correct amount to make a movie for is probably one of the toughest jobs for a producer. How do you spend the least amount so as to maximize profit, without sacrificing production value, VFX, and talent, which also help maximize profit (in other words, you need to spend and conserve, to make money)?
Here is the most consistent call I’ve received for as long as I’ve been in film finance….
JEFF: What’s the budget?
INDIE: Four million, but I can make it for less.
JEFF: That’s good. But, this fund only does movies with budgets ten+.
INDIE: Dude! Hey, I can totally make it for ten!!!!
JEFF: No “Dude” you can’t.
A wise producer named Ellen Krass used to say that, when it comes to budgets, “I can decorate a house for $750 or $75,000 — both will look great, but one will have antique styles, the other will have antiques.”
Same goes for movies. There is a general misconception in the indie world that a film should be made for as much as you can raise. Which would mean that a single location drama should be made for $10m for no other reason than you happen to be lucky enough to raise it.
Just because a movie can be made for more, doesn’t mean it should be made for more. – Jeff Steele circa 2010
In “The 70% Gospel” post I recommended filmmakers use their sales agent as an initial frame of reference for establishing a budget amount. In short, the bottom-line Take/Low amount on the foreign sales estimates should not be less than 70% of your budget. As your cast and other creative elements change, your agent can revise those estimates accordingly.
Certitude speaks volumes in this business, so make sure you approach financiers knowing how much money you need. Just having a below-the-line (BTL) amount with above-the-line (ATL) being predicated on how much you raise, tells me that a producer is out of touch. ATL and BTL do not exist independently of each other. Higher value talent expect higher productions values, as well as higher value perks. To say you’re going to do a film for $3m BTL and go after a $10m star is ludicrous (unless it’s that star’s passion project or Oscar project). A producer needs to be able to demonstrate to a financier (as well as talent reps) that the VFX, music, and other production values are going to be commensurate with the caliber of talent you attach (and for which you’ve allotted in your budget.)
Raise the money you need to execute your movie. If you can make it for less, great. But it’s irresponsible to your investors to raise (and spend) more money than can be recouped. Buyers keep track of what kinds of films producers deliver, so if you deliver a theatrical star in a TV or video quality movie, good luck on your next round of pre-sales or casting talent for that matter.
Not pricing your film’s budget can give the impression that you and your team just stumbled out of a smoke filled van.