You’re written the script to die for. It has passion, an original voice and it’s about something important. It has to be made. Now what?
A panel of experts, who’ve been through this process many times, came together at this year’s American Film Market (AFM) and shared what they’ve learned in the trenches.
Once you have that script to die for you need a budget. A budget that’s real, and will hold up under scrutiny by the most seasoned financiers and allow you to make the film you envision.
“You have to build the skeleton of your budget first because that’s going to be your bible,” said Shirley Davis, Executive Vice President, Physical Production, Alcon Entertainment.
You can give making a budget a shot or better yet, find someone who’s an expert. This arcane skill is best handled by what’s called a “line producer.” They’ll go through your script and determine how many days you’ll need to shoot, the locations, the number of actors, props, costumes, what it will cost for equipment, feeding your crew and the rest of what you’ll need to finish the film so it’s ready to been delivered to the distributors.
Before you ask someone to do a deep dive into budgeting your film you need to be able to tell them whether it’s going to be a small film or a large film. That can help them determine whether you’re on the right track.
Equally important is making sure you’ve cleared whatever rights, such as chain of title, you may need to clarify in order for you to tell your story. That’s the Intellectual Property or IP.
“Get it cleared, get it right,” said Stefan Lutje, an attorney with Greenberg Traurig.
“Once you confirm your IP, consider how cost effective you can make your budget,” said Davis.
Budget in hand, along with your great script, you’ll now be prepared to see what your film is worth in the marketplace. This might mean looking at it with a variety of casting options from a no name cast to having one or two recognizable actors in lead rolls. Distributors and financiers are looking for actors who they think will bring in an audience. Of course other factors can offset a lack of A listers such as the topicality of the script, having an up and coming actor who is poised to break out, a brilliant director or something else like a commitment from a broadcaster that lessens the need for a large financial commitment.
You’ll need to interest a production company or producer who can help assess the viability of your film at a particular price point.
They’ll work with a reputable sales agent to get estimates from foreign and domestic distributors. These estimates will tell them, and more importantly, it will tell the banks who you’d turn to for loans to finance your film, if and at what price point this project could be viable. It’s all about the budget versus the film’s financial potential.
In addition to presales, you’ll be looking at getting a loan from a bank. There are several banks that have an expertise in film financing.
“It goes back to the fundamentals of your budget, because that for us validates the film in the marketplace,” said Senior Vice President, Entertainment Industries Division, Pacific Mercantile Bank.
Before going to the bank you’ll also look at film incentives and tax credits that are available from different states in the US and from countries internationally. These incentives and credits can be substantial.
You can get from “5% to 40% back from your budget from incentives,” said Joe Chianese, Executive Vice President, at Entertainment Partners.
The funding might not be available until after you complete your film but banks can loan up 90% of the value and that can get you going.
The incentives and credits plus the 10% to 20% you might be guaranteed from presales will still live a hole in your budget of 30% or more.
That will likely come from equity investors who have experience in funding films.
You can also explore film subsidies that are available in different countries. Many of which you may not have to pay back. Navigating these requires some expertise. This so-called soft money can help with your equity investors.
“Sometimes equity likes to see a lot of soft money,” said Brian O’Shea, CEO, The Exchange. “You should know the expense of soft money because it ties into confirming the financing,” he said. “Also focus on tax credits, really know that stuff.”
The streaming services, Netflix, Amazon, Hulu, etc. are the real game changers. They have the money and are buying films and series outright. If they wade in you may not need presales but working with a sales agent you might still be able to carve out some territories you can sell later.
“Best thing you can do is build a team like this, a sales agent, banker and a lawyer,” said Davis. “People you can trust and ask questions. So when your film is ready you can ramp up.”