Paul W.S. Anderson’s 3D “The Three Musketeers” is one of Europe’s biggest productions this year. But it’s not just the scope of the film that’s of interest to a funding-challenged international film biz, it’s the financing.
“Musketeers” underscores one new direction for indie financing as companies seek more upside from the U.S. by bringing fully financed movies to the table. The film — which begins lensing Aug. 26 in Bavaria and is being produced by Germany’s Constantin, has four key fiscal elements.
n U.S. coin. Summit Enter-tainment, which sold the pic worldwide, is making “a major U.S. distribution commitment,” says Rob Friedman, Summit co-chairman/CEO. But Constantin hasn’t had to call on that commitment to fund “Musketeers”: Despite a sizable budget of $80 million-$100 million, “Musketeers” has been fully financed from outside the U.S.
Summit is aiming for an April 15 release Stateside, but it’s the international audience that really matters for big-budget epics, which can take in two or three times their domestic gross overseas (U.S. auds haven’t been as receptive as overseas fans to recent period actioners like “Robin Hood” and “The Prince of Persia.”)
n Subsidies. “Musketeers” is a testament to the continued strength of German subsidies.
Shooting two-thirds on location in Bavaria, the rest at Berlin’s Studio Babelsberg, the production has drawn $1.31 million from the German Federal Film Board, $2.1 million from FFF Bayern (Bavaria’s regional film fund), and $522,800 from the Bavaria Bank Fund.
Though subject to approval, “Musketeers” can hope for up to $2 million from the Medienboard Berlin-Brandenburg, and some $10 million from a DFFF German Federal Film Fund, which offers 20% rebates on movies’ German spend, says Martin Moszkowicz, Constantin head of film and TV.
Adding a Canadian tax credit triggered by vfx work carried out by Mr. X in Toronto, subsidies will cover about 20% of the “Musketeers” budget, he estimates.
U.K.’s New Legacy and France’s Nef co-produce.
n Gap financing. Constantin taps a revolving credit facility with a German banking consortium, led by DZ Bank.
n Presales. With a trans-Euro cast including Orlando Bloom, Christoph Waltz, Logan Lerman, Matthew MacFadyen, Ray Stevenson, Luke Evans, Milla Jovovich and Mads Mikkelsen, “Musketeers” was one the few high-profile titles at Cannes that sold quickly to virtually every major territory — even hard-to-convince Japan, where it went to Gaga Communications.
That’s “symptomatic of the whole market at the moment,” says Summit Intl. prexy David Garrett. “Everybody needs and wants potentially big theatrical titles. Anything marginal is too risky, because you’re not able to mitigate the risk anymore through DVD and TV sales.”
Moszkowicz explains that on the right project, the U.S. can still bring in 40% to 50% of revenues worldwide. These days, however, advances for the U.S., are rarely more than 25% of a budget: The U.S. P&A expenditure is so huge that U.S. distributors have tended to reduce their advances.
“You can always try to get an advance and a lot of money out of the U.S. and finance the movie with it,” Moszkowicz says, though he cautions it’s unlikely the producer would see any overages out of the territory in that scenario.
Friedman agrees: “It is a tribute to the way that Constantin has financed this movie that it allows them to benefit in the upside in such an enormous market.”
Of course, those benefits will come only if the pic scores big-time at the U.S. box office. And few companies are able to assemble such high-profile elements.
But Constantin’s ambitious effort gives hope to German film orgs.
“Constantin is one of the biggest film production companies that can actually develop and realize such a project — and on location, not in a studio, says Bavarian Film Commissioner Anja Metzger, adding that it’s the biggest film project to be shot in Bavaria in years.
With questions still hanging over the future of companies like Apparition and Miramax, it’s likely foreign producers will increasingly look to fully finance films before addressing U.S. distribution.
That approach has worked well for StudioCanal on the low-budget, Eli Roth-produced verite-style horror pic “The Last Exorcism,” which bows Aug. 27 Stateside. In February, Lionsgate took U.S. distribution rights on the completed film for a high-six-figure advance. But it reportedly made a $16 million P&A commitment.
While the international box office continues to expand, the U.S. is still the single biggest territory. So companies spending millions on U.S. P&A are hoping that the effort multiplies box office around the world. Or, as the Three Musketeers say, One for all and all for one.