I attended the IIFF and Film Financing Townhall last night organized by Tyler Pukatch, in Hollywood at the LA FIlm School.  They had a solid panel of guests, which included: an attorney I’ve worked with in the past Matt Thompson (Stroock), entertainment banker Brian Stearns (Union Bank of Cal.), Bill Sutman (CFO, Relativity), bankable sales agents *Nadine de Barros (Voltage) and Ruzanna Kegeyan (IM Global), and financiers Joe Cohen (American Entertainment Investors), and Clint Kisker (Screen Capital).  My expectations were high going in for this group.

One thing that all the panelists could agree is that the good news and the bad news about the state of the film market are the same: film production is down 30% year-over-year.  This is good news because for those who manage to get movies made will find less competition in the marketplace competing for distribution (foreign and domestic).  The downside is that less capital is going into indie films.  This is mostly due to poor returns on investment Wall Street received from the gold rush of 2003-2008, when they were drawn to Hollywood because of its appeal as a non-correlated asset class (meaning it has no relationship to the stock or bond market), coupled with that lottery mentality.

The topics of P&A, presales and gap loans, equity investors, and tax credit advances were covered ad nauseum.

A great take-away from the evening was Matt Thompson’s simple rules for establishing credibility for your project:

  • Have the rights you say you have;
  • Have the attachments you say you have (and understand that unknown actors have no value);
  • Get a real budget done and make sure it’s rights (music, VFX, contingency, are often under-budgeted);
  • Hire a reputable financial advisor to advise on the structure of your financing and assist in the closing of your films, “they’re worth their weight in gold”;
  • Get to know the bond company and get them to know your project.

Expanding on Matt Thompson’s establishment of credibility, Clint Kisker discussed how paying a small retainer to respectable a finance attorney, and getting a short form agreement with a bankable sales agency are two ways of getting sponsorship for your project.  These kinds of key alliances also function as a form of endorsement currency for you and your project that can open doors and predispose people to considering your project. In other words, this is not the time to be miserly with your cash.

Bill Sutman reminded the audience that film financing is a game of losers, and that one winner will make up for a multitude of sins.  Translation: the film gods owe you nothing, so just because you produce a slate of 15 films, doesn’t mean one will hit.  They could all tank, even if they’re all good.  But if one does hit, it could offset the rest.  He also conveyed some interesting statistics: in 2009 video sell-thru was down 14%, whereas rentals were up 7%.  The profit margins on sell-thrus are in the dollars, whereas rentals are in the cents.  Kiosks, Netflix, and Red Box are showing the most gains in the rental space.  Blu-Ray is also showing enough promise that Wal-Mart is allocating more shelf space, so that’s potentially good news for all.

Nadine and Ruzanna gave insights into how foreign buyers are your film’s real audience. They can’t market your project to your intended audiences; they need to market it directly to the buyers and distributors.  Those are the ones who call the shots on for that piece of your financing.

Brian Stearns gave some interesting insight from a bankers perspective, that when it comes to financing presales, the financial risk on a film is lower if the project is bigger.  Buyers are more inclined to pay for big films than they are for smaller films, and their gap loan is more inclined to be covered on higher budgeted films.  For the record, a small film in this case is anything under $10m.

This audience had more film students than normal, so I tried to let the redundancies of how film financings are structured slide.  I also would have liked to have seen more conversation and questioning between the panelists. All-in-all I thought it was a fresh group for IIFF with some  sound advice, and potentially good news:

Due to the film financings status as (1) a non-correlated asset class, (2) having decent but not great returns, (3) having a chance of getting a film that pops, and (4) long-term alternative to (now out of vogue) short-term/currency trading, we may be seeing (cha-ching!) the return of Wall Street money shortly.

*And lastly, during the Q&A Nadine de Barros gave a shout-out to FilmClosings as the best place for information on the foreign sales market and the indie film finance business as a whole.


  1. Bravo, Jeff: Getting your review is far more effective for me than having been there. I tend to get glassy-eyed in that type of seminar and find my mind drifting when speakers drone on.

    Great to hear that production volume has dimished but sad to hear that buyers are more inclined to pay for films with budgets over $10 million.

    Sad for them, too, of course. They’ll miss out on films such as “The Lives of Others” ($2 million budget – $80 million global take) – “Paranormal Activity,” (buget: $15,000 – Box office $108 million) – Blair Witch (35,000 – gross: $249 million) Mad Max ($200,000 – gross $99 million) My Big Fat Greek Wedding ($5 million – gross 368 million) the list goes on and on.

    • Andy please tell us you were being sarcastic by mentioning the three horseman?????

      contrary to popular opinion, they’re not going to perform like Paranormal Activity, Blair Witch, or Greek Wedding (note: never ever include those films in your prospectus, ever!) It’s comparable to using the Lottery as an example of how to get rich quick.

    • We all missed out on those gems (well, Stuart Ford didn’t, but the rest of us did.) The overlooked story about Paranormal is that the filmmaker sold this $15k film for $300k. That’s a 20x multiple! Cash-on-cash, it’s not much, but it’s a worthy victory in its own right.

  2. Thanks for the recap of the event. Were any new financial sources uncovered?

    It is worth remarking that despite a tremendous decline in the cost of production (digital, VFX) that there is an overall decline of 30% year-over-year. Does this have more to do with tight credit or do other issues such as piracy play heavier?

  3. Great post Jeff, but I do want to throw my 2 cents into the ring here about a couple of things that were said.

    1. Based on who was on the panel and how they make a living I think filmmakers need to do more homework on the idea that gap lenders are only looking at films over 10M. This is common statement made by people who are in the business of selling debt and their income is based on fee’s, interest and interest reserve hold backs. As a strategy to prevent content glut I think this is a sound business move but they should be more open to telling people why they don’t want to fund 1000 films at 1M.

    2. I think you’re right about the last comment about the return of wall street but I’m afraid that the return from Wall Street will be pointed in the direction of the new and emerging futures markets like Cantor is setting up. Its sexy…and the returns (or losses) happen a whole lot quicker and its something to talk about at the water cooler.

    • David, I’m not sure where the Wall Street money will end up in its second coming, but I do hope it will be smarter and more experienced money. This previous iteration was too smart for its own good (the smartest men in the room…)

  4. I was in attendance last night as well and Jeff is spot on. As a somewhat seasoned entertainment attorney myself, I also was hoping for a little bit of a higher level of discussion, but understood that this was aimed at a more student crowd than normal. It was also an excellent opportunity for me to bring one of the partners in one of my small, independent production companies clients to hear some of the best experts in town speak about the current market and environment. Having worked with many of the members of the panel and represented Relativity in the past, I too knew this was a gold mine of information.

    I was especially fond of Clint’s presentation as he not only expanded on what other members of the panel had to say but also really set forth certain concrete things and steps that independent producers could do to increase their chances of having their movies funded. It is so important to be pick the right sales agent and know who you can take to a Union Bank that will add value or not. Only certain sales agents can presell a movie, and it won’t be every film either.

    Clint then provided my 2nd favorite gem of the night and one that made me so happy I had a client in attendance (and something that all other independent producers should listen to). Of institutional investors who are pitching their financing for your movie to you he said this “If you can’t find [that financier] on Google, they simply aren’t really”. That alone was worth the cost of admission times a thousand. So many scams are out there. And just remember that.

    But my favorite gem of the night? Provided by Matt Thompson. His top three tips for becoming successful and getting your movie funded?
    3. Cross your t’s and dot your i’s- make sure that your presentation to investors, sales agents, attorneys, etc. (and that includes your presentation of you) is 100% perfect.
    2. Its a small town (or, as Matt put it, one big gradeschool room). E veryone knows everyone. Your reputation is everything. Be honest in your dealings. Be upfront, do what you say and say what you mean.
    And…Number 1. “Marry rich”.

  5. Terrific site – thanks a lot for the taking the time, priceless.

    I am an indie filmmaker pushing my own projects around seeking the elusive and diminishing financing opportunities and appreciate the common struggle and ongoing market correction. I have satisfied Matt Thompson’s simple rules and during my exhaustive search and I certainly am thankful for any help and support offered. The shortcomings are retaining a finance attorney and finding the right sales agency – anyone wanting to consider such a role – please advise.

  6. I wished I was available to attend. Would’ve liked to meet Jeff and the panelists.

    As far as scams go in this town, here is a gem I received this week I thought I’d share. I have redacted to protect the guilty —

    “I have a project that is $60,000,000. We have a banking group in [U.S.] that is considering and probably will lend $54,000,000. to my company ([Joe Blow Films]) to produce 6 films with A-list people (actors and [TV director] DGA). We need $6,000,000.00 to put the project together. For that we give the investor(s) 50% of the entire project with no recourse. There is a business plan that breaks down the strategy and another plan that discribes iPG. If this is something you or your company may be interested in, please let me know ([eMail addy]).”

    I replied we could meet for dinner at the Beverly Wilshire, if they were willing to pick up the tab.

    Never heard back.

    Thanks Jeff for a great post!

  7. hi jeff, great post and great site. i had been considering attending the event and am glad to hear summary. i’ve found the iiff events to have great panelists/speakers, although with some tighter moderation some really positive sparks could occur. (that is, deeper conversation, more intelligent/cross talk.) anyhow. glad i found your site.

  8. Regarding:

    “Clint Kisker discussed how paying a small retainer to respectable a finance attorney, and getting a short form agreement with a bankable sales agency are two ways of getting sponsorship for your project…”

    How do I know if my attorney is “respectable,” and where can I find a list of “bankable” sales agents?

    • @Fritz, Unfortunatley, there is no list of bankable sales agents because the list is always changing. If in doubt, call an entertainment lender that you’re intersted in working with (e.g. Comerica, Union Bank, etc.) and ask one of them to give you a few names that they would work with and who might be good for your project.

  9. Great post Jeff. For me, I also liked the last part about the possible return of Wall Street to the film biz, but for a different reason. As a filmmaker who prefers at this point to stay just slightly under the $1 M budget I find this very encouraging. Small investors, people who invest in the $20k or more level are also skeptical of investing in small films. If they see Wall Street becoming more interested in investing in bigger pictures it will show that the film business as a whole is seen as a good investment. Right now investors in any business are holding back, watching to see if things turn around in the economy. People in the film business have been waiting to see the business become more profitable, especially on making money on their films after they are no longer running in the theaters.

  10. FYI: Jeff will moderate the next IIFF/LA Townhall event, Wednesday, May 26, 7-10 PM, at the Goethe Center
    5750 Wilshire Boulevard
    Suite 100, Screening Room
    Los Angeles, CA 90036
    Click above or on the iiff link in the footer at the bottom of the page


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