Veteran players adapt to new rules of game

Factors change, but struggles are a constant

As far as the indie film biz is concerned, death and taxes aren’t the only inevitable things in life. There’s one more item on the list: The going is tough and it always will be.

“It has never been easy,” says Paul Colichman, co-prexy and a founder of Regent Entertainment. “The only variables that change are the factors making it tough at any given time.”

Regent made a big splash three years ago when “Gods and Monsters” won a best adapted script Academy Award. Since then, the Santa Monica-based company has chugged along in increasingly choppy waters, selling genre titles in the international TV market and continuing its domestic theatrical biz. (“Speedway Junky” with Daryl Hannah and exec produced by Gus Van Sant preems this August).

“Things change day-by-day, minute-by-minute in the independent film business,” adds Mark Damon, chairman and CEO of MDP Worldwide. He maintains there’s no indie crisis, as some industry observers have asserted. But there has been a wholesale change in the ground rules.

“You can no longer depend on (foreign) pre-sales to get 60% of a film’s budget,” he notes. Where once, for example, gap financing was a mainstream vehicle, now it’s a side-car. And the briefly popular insurance-backed funds of three years ago are as desiccated in 2001 as an Internet mutual fund.

Financing a non-studio project entails swiftness of foot, keenness of mind and, more recently, an encyclopedic knowledge of government regulations and bureaucracies around the world.

“The deals are more complicated than they’ve ever been,” says Damon. “The amount of paper-work is mind-boggling.”

For its last three pics MDP concocted a stew of tax shelters and foreign subsidies with a soupcon of gap financing and pinch of equity.

The soon-to-be-released Tim Roth starrer “Musketeer” used a Luxembourg subsidy (where part of the film was shot), a U.K. sale lease-back arrangement and the services of German bank. “We shoot where we know we can derive some benefit,” Damon continues.

If anything, some indie companies are glad the easy-money days are over. “A few years ago there were a lot of shit movies getting made,” says one exec. “It really harmed the international market for the companies that were making good product.”

Perhaps more than any of the major studios, with their deep wells of cash, the truly independent companies have to concentrate their efforts on a core audience if they want to survive.

Case in point: Los Angeles-based Providence Entertainment. While the wags say that with God on their side, Providence has no worries, the privately financed company has prospered in a tight market mainly because of its tight focus on the Christian demo.

Its debut pic “Omega Code” generated decent coin ($13 million in domestic receipts, the highest limited-release indie grosser of 1999) and got some positive mainstream reviews to boot.

“We saw the (Christian) audience as an underserved niche and we went after it,” says CEO Victor Vanden Oever. And it may not be such a small niche. A recent Newsweek cover story estimated the Christian music, film, TV and publishing businesses as a $3 billion marketplace.

Among other things, Providence recently signed an output deal with Spartan Entertainment. And if you think Providence will stay in the Christian business only, think again. Later this summer, the company is releasing “Extreme Days” which Vanden Oever describes as a Tom Green-less, non-religious, family road trip flick.

“People who think we’re a ‘Christian company’ are wrong. We’ve made in-roads with that brand, but it’s just one that we’re going after.”

The indie biz is both Darwinian and Draconian, which begs the question: Why bother? Love of film? Well yeah, says Colichman but let’s not get too sentimental. “We’re in the business to make movies that make money,” he says. “As long as we’re able to do that, that’s what we’re going to do.”

Adds Shoreline Entertainment’s co-principal Morris Ruskin: “I have friends at the studios who have their nightmare stories too. I love my job because we get to do everything — develop, cast, produce and market. We live and hope for those great titles that take people by surprise.”

As players such as MDP Worldwide have to cobble together increasingly sophisticated and cross-border deals to get films made, government lobbying will be just as important as finding and following the private money.

In Germany recently, a coalition that included American Film Marketing Association topper Jean Prewitt helped defeat a proposed federal regulation that would have made selling ancillary rights tougher for indie prods.

“We have to consistently work to make sure the indie scene survives worldwide,” says Prewitt, a former D.C. lobbyist and one-time attorney for UIP Pictures. “Making a film is hard enough, distributing it is getting ever more difficult.”

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