Industry geal making terms ?

[James Steven Beverly]

I'm about to brave AFM amd have been researching the business end of film making which has made me realize just how much I DON"T KNOW!!!! I'm starting to feel like a moron. I DID read an article where they described how the mafia envied Hollywood's accounting practices. ONE link I and my partner came across was:

 

http://marshallinside.usc.edu/mweinstein/teaching/fbe552/552secure/notes/deal%20structures.pdf

 

which is a GREAT link....HOWEVER, this is Film Industry Business 101 and IIII need to be more well versed in this particular idiom as this is going to be my bread and butter. ANYONE with any information along these lines would be most welcome to chime in on the subject. One thing of the bat I'd like to know is what in the Hell are "Lull fees"?? There are more questions but I'll wait until the discussion progress OR I get totally frustrated before asking!! Thanks in advance for your replies. B)

[James Steven Beverly]

I'm about to brave AFM amd have been researching the business end of film making which has made me realize just how much I DON"T KNOW!!!! I'm starting to feel like a moron. I DID read an article where they described how the mafia envied Hollywood's accounting practices. ONE link my partner and I came across was:

 

http://marshallinside.usc.edu/mweinstein/teaching/fbe552/552secure/notes/deal%20structures.pdf

 

which is a GREAT link....HOWEVER, this is Film Industry Business 101 and I need to be more well versed on this particular subject as this is going to be my bread and butter. ANYONE with any information along these lines would be most welcome to chime in. One thing off the bat I'd like to know is what in the Hell are "Lull fees"?? There are more questions but I'll wait until the discussion progresses OR I get totally frustrated!! Thanks in advance for your replies. B)

[James Steven Beverly]

AAAHHH!!! LONG, long day. Sorry that should read DEAL not Geal and the second post was an attempt to edit the first BUT moving on, I'm having trouble specifically with the industry terms on top of page 2. AGAIN any help would be greatly appreciated. B)

[Guest]

Welcome to the producing world. I tell people all the time, I know way more about film finance than I ever wanted to learn.

 

You'll soon discover that anyone can direct a movie, it's finding the money and selling the damn thing that is the hard part.

 

If you're going to AFM I seriously would not worry too much about any of that terminology on your PDF. 99% of the people there don't know what any of that stuff means either. Besides if you do get to a deal stage you do what any smart producer does and you hire an entertainment lawyer trained in these aspects of the film business. You wouldn't want to handle it yourself anyway.

 

The main things you need to know as a producer are what kind of advance a company can pay? Will that be cash or a bankable contract? If you're selling a completed film what will the rev share be after the advance is recovered? The advance is never recovered so that's a moot point anyway. :D Your most important piece of info to find out is what kind of money your film is worth in a particular territory.

 

I think you're worrying about stuff that is very technical and won't come up in discussions, let a lawyer handle it they will do a better job than you. I seriously doubt "lull fees" will come up at AFM, that is a post AFM lawyer to lawyer discussion. The main point of AFM is to sell and sign short form contracts. The long form is always done post AFM.

 

R,

[Guest]

Oh one last thing, set up a relationship with an entertainment lawyer before you leave for AFM. This does not mean you need to pay him a retainer, it just means you ask him, "will you handle any contracts I bring back from AFM?"

 

Keep his contact info at the ready at AFM just incase. You come across as being much more credible if when asked who your lawyer is you are ready with an answer vs saying, "uhhhh I dunno, I have to find one when I get home."

 

Then again, it's likely no one will ask, it's nice to be ready though.

 

R,

[James Steven Beverly]

Richie, you da man!! :D Thank you for the information. I'll definitely look at securing an entertainment lawyer and heed your sage advice. On anther forum someone suggested partnering with a sales agent at AFM, any thoughts on that?

 

Any tips on the best way to sell short form contracts, I.E. what are these guys looking to hear from us and what they're looking for in terms of the deal? I've been a salesman (best way I've found to give me the freedom to pursue my goals) in one capacity or another for most of my adult life so sales, I am fairly well versed in. This market though is one I'm less familiar with in terms of nuts and bolts deal making and I could use any information on what the customers I'll be pitching want.

 

How do I figure out what kind of percentage should I push for in any given territory? How can I turn these pre-sales into leverage to hook a star? What will entertainment banks be looking for out of all of this? A lot of questions I know, but I REALLY need to know what you know my friend. ;) Help me out here and I'll wine and dine you at the Bonaventure in L.A. as soon as we've set a production date!! B)

[Guest]

Well in this market I think pre-sales are a non-starter sad to say. Unless you're a known producer with an established track record and a bankable star attached, no one is going to look at a pre-sale. What happens at AFM will answer the question as to why for you, there are thousands of completed films already on the market. So why make any pre-sale deals?

 

Also, 99.99999% of the buyers at AFM will not be able to produce a contract that would be accepted by a bank to loan production funds against. There may be some private companies out there that will accept the paper of a few international distributors, but the banks have been burned so many times on these deals they are pretty much out of the picture.

 

A bankable contract would need to come from a Paramount or Warner Bros, and none of the studios will hand out a pre-sales contract to the likes of you and me.

 

If you can find a private lender that will accept your pre-sales contracts that would be the way to go. I don't know any. If I did I would be dealing with them now. :D

 

R,

[James Steven Beverly]

Wattarya tellin' me ol' buddy, goin' to AFM is a waste of time? I mean if so, let me know. I'd hate to think all the money I'm gonna spend and the time there is gonna n=be a waste, but if so, please, let me know what your think. I kinda got the idea from a tread on dvxuser.com Freya turned me on to:

 

http://www.dvxuser.com/V6/showthread.php?151846-Corrado-Part-II/page85

 

You may have already seen this thread but in case you didn't, this guy, Adamo, is very similar to you in that he made a feature that got him a much bigger film and is now looking at his 3rd project. If you read through to the end of the tread (Adomo's posts are really the only relevant information you need to read although there are a few working professionals that chimed in) I'd love to hear your take on his comments. Let me know, I'm probably going anyway but I'd love to hear your thoughts. B)

Edited August 2, 2011 by James Steven Beverly

[Guest]

Wow great thread over there, I wish we had threads like that one over here!

 

Here's what one guy says about the film they are discussing, " That's the complete wrong way to look at it because, even though I haven't seen it, I'm 90% sure it's total crap. All amateur narrative features are. It's the name of the game. And, 95% of those filmmakers think they're freaking amazing." Priceless, wow!

 

In answer to your question, what is it you want to get out of AFM?

 

A: Getting pre-sales for your current project? Like I said this will not happen. Any of those distributors there will have to pay you cash and they won't do that. And none of them can offer you a bankable contract.

 

B: Sell an existing movie? This you can do, yes.

 

C: Meet industry people? This you can do, yes.

 

R,

[James Steven Beverly]

We DO, dude. YOU had one where you explained how you got a 50/50 distribution deal with indy digital theaters by picking up a freakin' PHONE and parleying that into an incredible dvd DEAL which was positively inspirational!!

Now HERE is some things Adamo said:

 

"Sure. I go through this all the time on FilmSpecific.

 

There are THREE things required to get a film made, only three. You must bring TWO to the table to get the other ONE.

 

Money - the $$ to make the movie

Talent - Bankable, name actors

Distribution - a promise to distribute the film in one or more territories

 

That's it. Pretty simple, huh?

 

kinda sorta. If I have the money and the talent, I can easily get distribution. If I have the talent and the distribution, I can easily get the money. If I have the money and the distribution, I can easily get the talent.

 

It's kind of like a rubix cube in a sense....you have to make all the pieces work.

 

So to answer your question, how would I do it now?

 

I would go to a reputable distributor (read, studio), and tell them I have project such and such and I could get so and so in the film if they were willing to paper the deal. Then, I would go to the bank, who would finance the paper. Then, I would go get the talent.

 

And that's how my latest project was done.

 

What if you are a neophyte and don't know anyone?

 

You need to FIND the producers who can GET you one of the three items!

 

Many people confuse a producer with someone that makes the movie. You know what - you can hire those chumps for ten-a-penny. Real producers bring you one of the three - either money, talent, or distribution.

 

My personal focus is to avoid looking for money. It is a hard road, and money is hard to come by. Distribution, however, is not. There is a deal waiting for every one of you who can bring a package to the table!

 

Find a distributor, sell your way in, and get a relationship going. Find someone who says "I will give you a deal for X territory if you make such and such a movie that has these actors in it"

 

It costs them NOTHING to make this commitment. It's all on you! They don't pay until you've made the film! They'll write this all day long!

 

You can bank their promises to distribute, then go chase the actors!

 

I can tell you this - stop focusing on finding money. Wrong angle. Big mistake on my part. Get distribution, and all will follow.

 

Distribution, of course, presupposes a marketable genre, script, and actors.

 

Or, you could keep making non commercial fest winners......let me know how that goes for you, lol. Sure. I go through this all the time on FilmSpecific.

 

There are THREE things required to get a film made, only three. You must bring TWO to the table to get the other ONE.

 

Money - the $$ to make the movie

Talent - Bankable, name actors

Distribution - a promise to distribute the film in one or more territories

 

That's it. Pretty simple, huh?

 

kinda sorta. If I have the money and the talent, I can easily get distribution. If I have the talent and the distribution, I can easily get the money. If I have the money and the distribution, I can easily get the talent.

 

It's kind of like a rubix cube in a sense....you have to make all the pieces work.

 

So to answer your question, how would I do it now?

 

I would go to a reputable distributor (read, studio), and tell them I have project such and such and I could get so and so in the film if they were willing to paper the deal. Then, I would go to the bank, who would finance the paper. Then, I would go get the talent.

 

And that's how my latest project was done.

 

What if you are a neophyte and don't know anyone?

 

You need to FIND the producers who can GET you one of the three items!

 

Many people confuse a producer with someone that makes the movie. You know what - you can hire those chumps for ten-a-penny. Real producers bring you one of the three - either money, talent, or distribution.

 

My personal focus is to avoid looking for money. It is a hard road, and money is hard to come by. Distribution, however, is not. There is a deal waiting for every one of you who can bring a package to the table!

 

Find a distributor, sell your way in, and get a relationship going. Find someone who says "I will give you a deal for X territory if you make such and such a movie that has these actors in it"

 

It costs them NOTHING to make this commitment. It's all on you! They don't pay until you've made the film! They'll write this all day long!

 

You can bank their promises to distribute, then go chase the actors!

 

I can tell you this - stop focusing on finding money. Wrong angle. Big mistake on my part. Get distribution, and all will follow.

 

Distribution, of course, presupposes a marketable genre, script, and actors.

 

Or, you could keep making non commercial fest winners......let me know how that goes for you, lol..........A distribution deal for one or more territories is a contract, a promise to pay upon acceptable delivery of the film. The deal points will include an MG (minimum guarantee - the cash), back end (if any) and what the project is about - the script, the budget, and the anticipated cast.

 

This contract will be looked at by any reputable entertainment bank, and if the distributor is credit worthy (most US ones are), the bank will advance you money on that distribution deal. If the distributor is a decent size (like Vivendi, who picked up H14), the bank will advance you face value on their paper (minus legal fees and bank charges, of course).

 

This is why getting distribution is so important! This is why I keep pleading with you guys to look at the commercial side of things. If you can get distribution deals, your films are financed out of the gate.

 

Getting distribution is all about knowing your genre, what sells, what does not, and what actors sell.

 

It's not rocket science......Regarding genre, simply put, genre means genre.

 

I at first struggled with this concept because I failed to see how simple it really was. As a matter of fact, if I had truly understood it before Corrado, I would have had even less story and more action.

 

Corrado's story was seriously hamstrung by a series of mishaps with the actors, scenes not shot, etc. You can't really call it "action" because there's just not a whole hell of a lot of action in it. It was based on the budget...but my priorities were wrong.

 

The major genres that sell well today are:

 

Action

Horror

Thriller

 

The genres that may sell but are really hit or miss are:

 

Religious

Children's

Animation

Family

Comedy

Western

 

The genres that do not sell (perennially), are:

 

Drama

 

 

So is there latitude here...of course. You can have a really great script with full story and real 3d characters, etc, in any one of those genres. As long as the CORE genre trait is present in the movie, it frankly doesn't matter.

 

So if you bring a movie that is supposed to be action but is instead talky talk with too much story, you will suffer. If you bring a hardcore action movie that has a surprisingly deep and rich story, it will do perfectly fine.

 

Just be careful NOT to forget the core trait you are selling. If it's horror, scare people. If it's action, make sure there is actually action. If it's thriller, keep people riveted in their seats.

 

No discussion of genre would be complete without the mention of casting. Cast actors that are well known in the genre you are making. Don't cast a dramatic actor in an action role. Get action actors (tons of them are out there.)

 

So in my case I'm pretty suited to action films because I am a second degree black belt as well as a military reservist. I can do action.....but it doesn't really matter. All that gives me a slight edge but frankly if you get an action script, you can also use a consultant to help you with the guns/shooting part (i.e. your armorer) and a super stunt coordinator to help you with action sequences...it's what they do.

 

I used a stunt coordinator on H14, a really great guy that made my stunts bigger and my fights more brutal than they would have been since he knew what we could safely execute. Very important!

 

As my films mature, I am trying to inject more story into them. I'd eventually like to be at the "blackhawk down" and "man on fire" level. TONS of action, but also a good story as well.

 

Corrado had too much story, and too little action. Then the story was hacked due to production issues. Hangar 14 has less story, and more action, and my next film will instead have even MORE action, but more story as well.

 

So I've told you what genres sell, now I will tell you why certain ones don't.

 

 

Religious - niche market that could either be huge or totally implode. Not alot of middle ground here. A few notable exceptions in a sea of failures.

 

 

Children's - needs a clever and established marketing angle to sell, preferably franchise based.

 

Animation - Really tough one here. Almost 98% chance of failure, even with the talents of a guy like Ruiari Robinson. Just a really tough genre all around unless you are dreamworks / pixar.

 

 

Family - sells well to Lifetime network and Movie if the Week type networks. Cookie cutter, not alot of inspiration, but is kind of like an 'ol reliable genre. Success here depends on pre-sale to the network. Would not make a family movie on spec.

 

Comedy - tough genre.....American humor is lost on foreign audiences so unless the humor transcends cultural boundaries (i.e. slapstick) and has good names, this genre should be avoided.

 

Western - If it contains lots of action, it will do okay. If it's a lonesome dove style dramatic romance, it will crash and burn. 3:10 to Yuma is a good example of a marketable western. Appaloosa is not.

 

Drama - all forms of this are anathema to any sales, be they romantic drama (notebook), straight drama (King's speech), war drama (Hurt Locker)...whatever. Traditionally films that win oscars are money losers par excellence, with a few exceptions. The Academy loves non commercial movies and almost always picks Hurt Lockers and Kings Speeches over Avatars and Inceptions. It's just the way it is.

 

The Oscars are an exercise in art, and not sound film making principals.

 

I would love to win an Oscar as much as the next guy, and I have a script that I want to direct that is a dramatic piece that I would make in hopes of doing so someday.....when someone else wants to foot the bill for it. I wouldn't invest a penny in it no matter what actor was in it. They are just money losers, plain, and simple..........What I'm saying Shawn, is in you and Kholi's case, you already have a body of work that you can demo. I think either of you could make a feature that would sell.

 

Now it's time to stop sitting around and thinking of the BUDGET and how you are going to raise that money.

 

It's time to start packaging a film together.

 

Get the word "scripts" out of your vocab for AFM. They are MOVIES. Take your best one, and draw up a realistic budget for it. Say $500K. Plan on spending $150-200K on talent. Pick one or two marketable names and call those agents up, do availability checks, feel them out.

 

Head to AFM with a one sheet and poster and tell the distributors it looks good that you can make Movie X fly with these guys, and see if you can get deals out of them.

 

See how far you get. If your names are realistic and achievable, you will get pretty damn far.

 

Start trying to actually get the film made. You will be surprised at the results.

 

The project is only waiting on you.....you know that....right?......Really great quote that applies to this thread, and filmmaking in general. File under: How can I get my movie off the grouns?

 

"We are all faced with a series of great opportunities brilliantly disguised as impossible situations." - Charles R. Swindoll......

1. Some studios, some foreign distributors. Can't really get into specifics.

 

2. A poster with a synopsis on the back in 8 1/2 x 11 (otherwise known as a 1 sheet) is enough to get the discussion started. They will ask to see a script if there is further interest. Some will not ever ask to see a script - they will buy off the poster- especially if your film is in a definable genre with a good cast.

 

3. As with all distro deals, you usually get a small amount down on the first day of principal, with the rest due on delivery. You finance the paper for the rest.

 

4. That part is still classified.

 

5. No issues getting a bond. All films stand alone and are judged on their individual merits. Yes, a bond is required every time you finance something.......I think the question is "Can you get into making theatrical features after making DTV pictures"...or more like "how do you get there from here".

 

Let me start by stating the obvious (to me).

 

1. No one wants to make low budget, non paying wear-fifteen-different-hats type movies.

2. No one wants to make directo to DVD pictures their whole careers.

3. Most everyone who makes movies wants to some day see their movie playing on the big screen (and not for a one time deal....for a big release!).

 

 

You guys may not agree, but the above three points are the way I feel. I really, really want to someday have my films in theaters, period, end. I think most of us share that goal.

 

To that end, the same rules apply per my previous posts:

 

1. You can get there via critical acclaim

2. You can get there via commercial success

 

I challenge anyone to tell me otherwise.

 

The path I am proceeding down is one of commercialism. It's all I know. I know nothing about fests, awards, and gala events. I know about packaging, casting, ans getting distribution.

 

So keep in mind that there are more ways than my way, and I know nothing about way #1.

 

Having said all of that, you will start finding that as your films get larger (like my next one), you start seeing verbiage like "to be considered for theatrical release" in the contracts.

 

What this means is that if you make a good enough film, they will put it in theaters! You won't find this in the smaller movies, and even on a picture of substantial size, you have MUCH working against you as far as theatrical release.

 

DTV is a huge proift center that costs the studios and distributors next to nothing besides the strike price of the film. They make movies with big stars, you see the film, rent it or download it, and bang, profit is made. There is no buzz. There is no hype. There does not need to be.

 

Countries all over the world will buy the film and play it on their TV stations and stream it in their languages. The cost for them to do so is minimal, apart from what they pay to acquire rights in that territory. They don't advertise this stuff.

 

Switch gears to theatrical...

 

Even the smallest limited release (couple hundred theaters) comes with a massive p&a budget for posters, commercials, radio ads, marketing, merchandise, etc. It costs MORE to market a $5M film than the film costs (much more) and the profits could be huge or non existent. No one knows!

 

This is why you will seldom see films in theaters that cost less than $25M to make. The P&A budget is just not worth the risk to a studio.

 

They like to spend money on the $50M+ films and get them out there. You can spend $50M to market a $50M movie easily!!!!!!

 

 

How does this relate to me directing theatrical pics????????

 

You have to be a reliable and proven profit earner to even be considered to get your film released theatrically. I may not EVER see my movies in theaters. Harsh, but true. I am fortunate to see them in stores and on netflix even.....

 

My plan is to make larger and larger films with bigger cast.....to the point they will HAVE to take them theatrical.....of course they don't HAVE to do anything...but that is my hope.

 

Only problem is this.....you get ONE chance in the beginning to do well in theaters. Your film must look good and screen test well. Audiences must like it and numbers have to be good. Bomb it out of the gate and you're done.

 

Yes, I know a dozen directors who have done just that and now can't even get a $2M DTV gig."

 

Now GRANTED, this guy had a REALLY sucky movie with Tom Sizemore in it which got him started, BUT what if one did enough homework to present a complete package to potential buyers, would one have a chance of securing funding for said picture, in your opinion? OR is a finished, kinda under funded picture placed out there for sale a better strategy? B)

[Guest]

He says:

 

"I would go to a reputable distributor (read, studio), and tell them I have project such and such and I could get so and so in the film if they were willing to paper the deal. Then, I would go to the bank, who would finance the paper. Then, I would go get the talent."

 

Way easier said than done. When we says "real studio" does he mean, SONY, Paramount, Warner Bros? They give out pre-sales once in a blue moon and ONLY to well established producing teams, with a script that they "must have."

 

I also disagree, that you can ink a deal sans talent. From everything I've seen the studios want the producing team to attach the talent before they'll even look at closing a deal with the producers. This is a very difficult stage to be in. Agents want to hear you say the words, "we are fully financed with studio XYZ," BEFORE they send the script to the talent. But you can't say those words until the studio signs off on the talent. It's a real Catch 22 many producers deal with.

 

Steve, I'm not trying to be negative but I just think you'll find that putting together a deal that involves a pre-sale and a bankable contract that the bank will give you money against. Is going to be much harder than you can possibly imagine. I'm just being realistic and not sugar coating things. If you do get into that situation you're going to discover that the banking fees, legal fees, and production bond, are going to take a whack load of money out of your budget before you even set foot onto set.

 

Frankly I'm having a hard time believing that this guy on the other forum has enough industry street cred today to get one of the Hollywood majors onboard any project. The number of bankable distributors outside of the majors are very very very few and far between.

 

There are better models out there that have not been discussed, for instance you shoot in a tax credit state, Michigan or Louisiana. Then you set up your package with the tax credits as part of the finance plan. Now you ask potential buyers for 60-70% of the budget because you are bringing 30-40% as the producer in the form of public funds which you will need to monetize somehow. In Canada we use the banks for this all the time.

 

Saying that you need 70% of the budget sounds a lot better than saying you need 100%.

 

Also, pre-selling some foreign territories is a good idea. But those contracts won't be bankable either so that is only good to give an equity investor peace of mind.

 

R,

[James Steven Beverly]

I think this guy may be including mini-majors and well established production companies under the umbrella of "studio" but YES I do see your point, and Rich, I NEED you to be as straight up as possible. Without brutally honest, completely unbiased information, how could I possibly plan an effective strategy to win this thing? I'm THANKFUL you're not candy coating you comments, my friend. I don't find them negative at all, they seem factual and informed which is exactly what I need. Thanks buddy, I really appreciate it. B)

[Hal Smith]

On the subject of trying to get a movie made:

 

Hunter Thompson in a Major League Snit

 

(Oscar nominated, bankable stars attached and this Dartmouth graduated airhead couldn't figure out how to find some money.)

 

It finally got made recently with a $45 million budget by a different company, releasing in October. Johnny Depp stayed with the project, Ms. Sorenson did not.

[James Steven Beverly]

GOOD GOD!!!! GIVE ME that cast and that pedigree and let me take a shot at finding the money. I can't believe in 2009, they didn't jump on this like a duck on a June-bug.

 

WOW!! I understand Fear and Loathing in Las Vegas was a bust but STILL even though it had the same cast of Johnny Depp and Benecio Del Toro, and the same material source which was Hunter S. Thomson, Depp was and is STILL the second biggest star in Hollywood then and now, Benecio was and is huge and even though Nolte is a bit over the hill, he's still a GREAT asset. IF they did have trouble finding the money to make the film, it's only because the B.O. F.A.L.I.L.V. had was a bit disappointing, but that could have been overcome by pushing Michael Thomas as the writer and dropping Del Toro as a sacrificial lamb. I AM glad to hear it it was released though. I love Amber Heard so that's a plus. B)

Edited August 16, 2011 by James Steven Beverly

[Hal Smith]

GOOD GOD!!!! GIVE ME that cast and that pedigree and let me take a shot at finding the money. I can't believe in 2009, they didn't jump on this like a duck on a June-bug.

 

WOW!! I understand Fear and Loathing in Las Vegas was a bust but STILL even though it had the same cast of Johnny Depp and Benecio Del Toro, and the same material source which was Hunter S. Thomson, Depp was and is STILL the second biggest star in Hollywood then and now, Benecio was and is huge and even though Nolte is a bit over the hill, he's still a GREAT asset. IF they did have trouble finding the money to make the film, it's only because the B.O. F.A.L.I.L.V. had was a bit disappointing, but that could have been overcome by pushing Michael Thomas as the writer and dropping Del Toro as a sacrificial lamb. I AM glad to hear it it was released though. I love Amber Heard so that's a plus. B)

 

Dear Cap'n,

 

I thought you'd like that link!

 

Love,

 

Admiral Halsey

[James Steven Beverly]

Dear Cap'n,

 

I thought you'd like that link!

 

Love,

 

Admiral Halsey

And I thank you for it, sir.