Lining up money for making films is always a difficult experience, but anxiety is running particularly high in Hollywood right now. A $10 billion-plus tidal wave of film-slate production funds provided by Wall Street institutional investors from 2004-08 washed across Hollywood, but that tide has gone out.

Yet film financiers at the 3rd Film Finance Forum West see a positive in their pitches to other types of investors — such as high net worth individuals, overseas film distributors and production/tax incentive vehicles — noting that the surplus of movies funded by the funny money has ended, and now, “the marketplace is now less crowded, which should make the films that are produced and distributed more profitable,” says Joe Chianese, VP of business development and production planning at financial services outfit Entertainment Partners.

According to Rentrak, the number of films unspooling in 1,000 theaters at some point in their domestic theatrical release tumbled 23% from a recent peak of 168 movies in 2007 to just 129 in 2010, the lowest number of wide release films in at least six years.

Mitigation-risk panel moderator Clark Hallren is now developing prints-and-advertising investment vehicles, where capital funds marketing costs instead of production, reasoning this is attractive as the last money in and first money repaid by theatrical film rentals.

And with P&A funding, film distributors don’t have to give up valuable distribution rights, as is the case when strategic investors in the movie business demand domestic TV or all rights in some offshore territories, notes Hallren, who is managing partner at investment advisor Clear Scope Partners and a former Hollywood corporate banker.

He also points out that creative talent, hungry for jobs as fewer films are made, are moderating compensation demands, particularly agreeing not to take royalties until financiers recoup specified amounts. “This is a healthy sign for the business,” says Hallren.

Long-ago busts in public limited partnerships and insurance-backed financing of film slates leave a few investors leery. “As I talk to investors,” says Hallren, “some occasionally say, ‘Is this about movies? Thank you but never mind and don’t call again.'”

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