The trend toward soft money, minimizing risks, the rising importance of private equity and putting together the right package were just some of the topics discussed by a leading panel of industry vets gathered for the IFP/New York panel “Financing Independent Film,” moderated by Prospero Pictures prexy Martin Katz Monday as part of the Variety Conference Series.
Participants included Comerica Entertainment Group prexy Morgan Rector; Caroline Kaplan , senior VP of production and acquisitions at IFC Entertainment; Stratus Films prexy Bob Yari; Capitol Films chief operating officer Hannah Leader; Miramax chief operating officer Rick Sands; and Cinetic Media founder John Sloss.
Sloss and Sands got so many laughs trading barbs during the informative sesh that they could consider taking their act on the road.
Quips aside, pros on the panel provided a blueprint to finance an indie for the overflow crowd eager to learn how to get pics made and distributed in an ever-changing entertainment environment. And “changing” was a word heard often.
“The U.S market is in a changing mode,” Sands said. “Even with a four-star review, you aren’t guaranteed box office. There’s too many movies, and with so much product there’s pressure on the exhibitors to pull you off screens quickly. In terms of getting money back, it’s really hard now.” He said the Miramax philosophy is to take intelligent risks and then manage those risks.
Comerica’s Rector, with whom Sloss said he always agrees because he’s got the money, said the game changes in different ways.
“If you’re looking at a (financial) model of the late ’90s, it’s not a good business model anymore,” he says. “We didn’t see the concept of soft money five years ago. Now we don’t see many projects without some level of it.” Generally, he added, if there is a $10 million budget, nearly a third of that may be soft money.
“You must approach it by looking at what the commercial value of the project is,” said Leader who strongly cautioned about the use of soft cash. “Soft money is making films get made that shouldn’t get made. It should be the tool, not the reason.”
Leader and most of the panelists agreed that pre-selling a few territories is a good idea to take to the bank, as it gives a project a certain credibility.
“You have to make sure the international value of your picture exceeds your budget by a considerable margin,” Yari said. “You really need to show your true value is at least 120% of your budget. And if you show that, you have a financeable film.” The Status topper also said minimum guarantees are a good bet against failure.
“Scripts we would have been keen on two or three years ago, we now think, ‘How does it break out and avoid the clutter,’ ” IFC’s Kaplan asked. “It’s not as easy to finance the nice American indie anymore. The stakes are higher.”
But Sloss had the simplest advice for a hopeful producer in the audience confused about where to find money to make her movie.
“Go global or go family,” he said.