Foresight CEO and chairman Mark Damon first came to Cannes in the mid-1970s as an acquisitions executive. This year, Damon is celebrating Sony’s multi-territory deal for his Neil Bogart biopic “Spinning Gold” starring Justin Timberlake. Damon sat down with Variety to talk about how producers are getting movies made now, versus back then.
Variety: So how has indie financing changed since you first started coming to Cannes?
Mark Damon: Back in 1975, it was very tough. At that time, usually the producers found funding from private sources. They couldn’t use foreign contracts as collateral; that’s something our company kind of invented. (Producers Sales Organization sold “Never Say Never Again,” the only James Bond film ever licensed by an independent to independent international distributors.) They would try to get advances from domestic distributors, but the idea of using foreign contracts as collateral wasn’t in existence then. And most of the pictures came from major studios. At that time, the independents just did tiny little low-budget pictures. There were no big-budget pictures done by independents.
V: So when did the banks start lending to you against foreign contracts?
MD: This happened (around) 1984. They gave us a revolving line of credit for about $40 million for the purpose of discounting contracts. It was the first time banks had accepted foreign contracts as collateral … In those days, for the most part, they required letters of credit. There wasn’t much discounting … If they had letters of credit, they gave 100%, less of course any interest. (Now) it averages out to about 75%.
Most sales companies don’t require letters of credit any longer. It’s just too cumbersome and distributors don’t want to do it. So banks will discount contracts from distributors based on their knowledge, their history, the country where they’re from.
V: What kinds of returns are investors expecting now, as opposed to a few years ago?
MD: There are more investors who are interested in going into pictures than there were five years ago, (but) now the money has gotten more expensive.
It used to be a 20% overall premium under investment … but when (investors) began to realize that if the film went into straight distribution with the studio then there wasn’t an advance from the studio, and it could take as long as three years to recoup their money. Then they got smarter, then they got 15%, sometimes 20% percent per annum. And then (net participation). This is different for every film, (but typically) the financial side will get 50%.