Phantom funding

The (fictitious) financing of a scary biker-action-thriller

Financial breakdown
(Figures are a percentage of the total production budget)
U.K. sale/leaseback: 15%
Grosvenor Park Prods.
Isle of Man equity: 25%
Media Development Fund
Canadian government financing: 25%
Telefilm EIP (equity)
Canadian Television Fund (non-equity)
U.K. presale: 10% Redbus Film Distribution
French presale: 8% Metropolitan Films
Canadian presale: 3% Remstar Prods.
Gap financing: 14% Comerica Entertainment Group

Financing an international co-production in the current economy can be a nightmare. Company cash flows are down, foreign costs keep rising as the dollar keeps falling, subsidy laws are slip-sliding around and deals take forever to close. It all means tighter budgets, fewer films, higher risks and more anger-management bills.

If raising coin for a real film drives you mad, lighten up and check out how the experts helped us cobble together coin for a fake one. We picked the brains of a few producers and financiers who shared some creative funding strategies.

Our title: “Phantom Biker.” The locations: the Isle of Man and Quebec. The strategy: A sale-leaseback deal mixed with good-old overseas tax subsidies.

Genre: Action-thriller-ghost story
Budget: $15 million
The pitch: “The Others” with motorcycle racing. Lots of action soaked in dreary weather.
Logline: While competing in the famed TT biker race on the Isle of Man, a legendary racer is haunted — and nearly killed — by a phantom biker chasing him at every turn. Cornering his prey at the finish line, the deadly specter reveals himself to be the biker’s beloved kid brother, who through sheer terror has pushed our hero to win the race in which he lost his life the year before.
Writer-director: Denys Arcand
Cast: Ewan McGregor, Milla Jovovich, Devon Sawa
Producer: Michael Kuhn (Qwerty Films)
Exec producers: Laura Polley (Independent Film Financing), Dan Christian (Isle of Man Film Commission and Gas Works Media); Donald Starr and Daniel Taylor (Grosvenor Park), Don Carmody (Don Carmody Prods.), William F. Lischak (First Look Media). With the participation of Telefilm Canada and the Canadian Television Fund.
U.S. distrib: Screen Gems

The package

“A biker ghost pic has a nice ring to it!” enthuses film consultant and AFMA member Rob Aft, who has read enough bad biker scripts to know. “Motorcycling is getting huge worldwide, the hard-core action will make foreign buyers drool and the horror element will lend broader commercial appeal.” Not to mention pulling in that crucial teen male demo.

Our $15 million budget is a “straddler,” meaning it’s low enough to qualify for foreign subsidies but high enough to secure a theatrical release.

The talent

We pick McGregor as our biker — a solid, affordable B+ star. Since he’s Brit, he’s a slam-dunk to meet our U.K. content requirements and to lead our foreign pre-sale package. He’s also a motorbike enthusiast (saving us money and time in training) who’s documenting his own solo motorbike trip around the world. His agent “promises” he’ll be home before our start date.

We also need a hot foreign femme to co-star as McGregor’s love interest. Though Ukrainian by birth, Jovovich is considered French by residency and fits nicely into a French presale deal as well as the Canadian/

Quebec part of our funding strategy. She’s also prime bait for the testosterone-charged 16-25 crowd, as well as for our U.S. distributor. “Based on her work in ‘Resident Evil,’ Screen Gems believes Milla is a movie star,” assures production/sales veteran Kirk D’Amico.

And in a blatant bid to help rope in Telefilm subsidy, we pick Canuck actor Sawa (“Extreme Ops”) as the phantom.

“OK, but how the hell did you come up with Denys Arcand to direct this?” marvels a production exec. Luckily, there are advantages to sheer stupidity in making fake movies. One of our (nameless) producers mistakenly assumed Arcand’s “Barbarian Invasions” was an action pic, and called the Quebecois director to have him write and direct. Perplexed, Arcand decided since he’d won his Oscar this year, he could afford to sell out.

The funding

Our financing plan may look easy, but the migraines to make it work aren’t. Unlike the German tax funds and their expensive loans, the U.K.’s sale-leaseback companies won’t take any backend money or producer fees. We’re cheap, so we nix shooting in Germany. Alas, the British government has yanked the U.K.’s tax deferment loopholes and doubled the amount of our budget we need to spend in the U.K. (40%) to access them. But the salaries of producer Kuhn and star McGregor can count toward that, so we take the money and run to…

The Isle of Man Film Commission. Ever frugal, we strike a nice equity and services deal with the IOM, which likes the idea of partnering with Screen Gems to recoup in first position out of the U.S. We’ll have to shoot 50% of our movie there to qualify, but that’s a no-brainer since we’re making the movie to shoot on the island’s TT racetrack anyway. To trigger even more savings, the production sked will be tweaked to overlap with the real race, taking care of some costly action b-roll.

Believe it or not, the Isle of Man — which, last we checked, was part of the British Isles — doesn’t qualify as “British” in counting toward our U.K. spend. First Look chief Bill Lischak suggests we 86 this obstacle by importing some “keys” from our British crew — our cinematographer, for instance — to shoot on the island. Done. Of course, we’ll have to burn the other half of our budget in a country that shares a co-prod treaty with the U.K. — Canada, anyone?

Doing the splits

“Too bad both the Isle of Man and Canada are each competing for the same spend — 50% of your budget,” says Laura Polley, funding guru from Independent Film Financing in Toronto. “You see, in these deals your financing split has to equal your spend split, which has to equal your creative split.” We then spend a half-hour calculating the details of all these splits — how to shell out half our budget in Canadian dollars to grab 25% of our budget in Canadian subsidies — and narrowly avoid a splitting headache of our own.

By now, we’ve front-loaded our movie with nearly 10 harried producers and funding partners who may never speak to each other again “and may even get divorced by the time this film is finished,” notes Polley. But hey, we’ve already raised 86% of our budget and had to pre-sell only three territories to get there. No wonder Comerica Ent. Group chief Morgan Rector pronounces our fictitious movie “very doable” and agrees to cover our $2.1 million gap.

Billable hours

So, is this endless wheeling and dealing to put “Phantom Rider” on wheels over yet? Fat chance. The credit block alone is a war zone. “The lawyers spend hours just arguing over the placement of an actor’s name on the poster,” reports Myriad Pictures’ marketing maven Maxine Leonard.

“From a closing standpoint, co-productions are a nightmare,” adds Comerica’s Jared Underwood. “From a lawyering point of view, they’re a wet dream. Everyone’s hashing out different contracts from different time zones in different languages. The bills will be crazy and it’ll to take at least three months to close. Maybe a year.”

In the meantime, anything can go wrong. Maybe McGregor decides to move his family to New Zealand? Maybe Arcand flakes out on the rewrite? Maybe our start date gets pushed back, the subsidies pulled and our movie dumped?

Maybe “Phantom Biker” remains … a ghost? For a fake film, the headaches are feeling awfully real.

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