Everybody thinks that to be a producer, all you need is a good script or good story. However, no matter how great your material is or who you know, the Film and Television Industry is still rooted in the world of finance.

When approaching a financing source, in any of the below categories, you have to be prepared to show your “Buyer” a clear path that your project has some good chances to bring ROI (return on investment). More often than not, young producers try to chase the movie money by promising unrealistic distribution expectations and projections, dreams of Festival Awards, Oscars, Emmy and the chance to hobnob with the famous and walk the “Red Carpet” so they can show off to their friends. That’s all very fun but ultimately, making a movie is hard work and securing financing is a long uphill road. It is VITAL that you have a Team of knowledgeable professionals with you prior to approaching Investors that knows how to answer the right business related questions and can help you have the most financially accurate presentation of your project.  Show Business contains the word BUSINESS. The viability of whatever it is your selling is the key to the new producer’s success.
Over the years, film financing has become one the most complex and risky investments, so here are a few things you need to have ready for your journey.
 

The Business Plan

Once you choose a script to produce, you must immediately decide upon a distribution platform (i.e. theatrical, digital or cable). This decision impacts every element of your production from your budget to your casting decisions.  After you determine a distribution platform, it’s time to do some research.

Who will see my film?

An average of 50-100 films that are similar to your own that have been released within the past 5 years. How may of them actually made money? And in what time frame? You will see that you will probably end up with a handful of films only.  Determine the distributor for each film, their success or failure with films similar to yours and their requirements for distributing films.  This research is imperative.  Who is your audience? What is the demographic you are trying to reach? Showing a potential investor a clear, detailed business plan along with enthusiasm, you will make them feel More comfortable in investing in your project.

The Myth of the Studio Deal

The most obvious choice for film funding is industry financing. Wrong. If you do not have previous credits as a producer or have a movie with an A-list actor or director, or in your hands a best seller book that everyone has talked about, you are most likely going to waste your time trying to get into a Studio. Find a champion producer, someone who has the track record with Studio films, and you will be able to at least get in the door. However, you also have to be willing to wait for years for your movie to get green lit. You are better of getting a US Distribution commitment as a vital piece to your financing puzzle first. Then you can look for independent distributor financing, talent agency financing, end-user financing, and completion funds.

Studio Development Production Deals

Should you hit the jackpot with your project and actually get a Studio deal, you are in no way an overnight success. An in-house studio production will usually start as a development deal. As a filmmaker, you will first have to pitch the concept to multiple creative executives, do a sleuth of rewrites based on the notes of the Studio executives, often losing creative control to your material and being considered the last voice in the room. If the Studio decides to finance the development, production, and the distribution of your project, then the studio will ultimately own most of the rights associated with your film.
When a studio gets involved in your project, you can expect a challenging and ego filled road ahead of you. The first phase will be a “Development Deal Memo,” which is a
short form written contract between you and the Studio. The agreement will mention salary, time schedules, screen credit, and percentage points. Most likely there will be bigger and more experienced producers on the project so your salary will be a fraction of what the other producers make. Most studios will give points of the net profit to unknown talent. Which means ZERO In your bank account. Typically, net profit deals do not pay-off. Most Studio films have the same budget of P&A (print and advertising) as the production budget so it will be a long time coming before net revenue kicks in. Studios not only recoup their 30 percent distribution fee, but also recoups the extra money spent on the advertising, and their bookkeeping most of the time show a deficit to eliminate virtually any chance of the Studio having to pay net profit participants their due.
 

The “Step Deal.”

A Step Deal is when the people working on the development of your project are paid incrementally as the project develops. In addition, the development work is reviewed and evaluated at each stage. This may sound great as you can tell all your friend you have a Studio as your Partner, but the real deal is that the studio has the right to stop development of your project at any given point and then you have to start from scratch all over again and perhaps wasted a couple of years in the process making your project the “unwanted child”. And when your project is in “turnaround”, you will owe the Studio all the money they spent in the development of your now “unwanted child”.
 

And now, it’s time to add some hustle to your hassle, roll up your sleeves and learn about the “puzzle piece” way of chasing the money..which I will cover in my next blog. Your Business Plan will be your best friend for the “puzzle piece” way….