TUESDAY'S SCRIPT BIZ TIP:
A few years ago a screenwriter friend optioned her
script to a Producer and threw a party. Though the option was only $100, she knew the film was going to be made because the Producer already had a distributor who would co-fund the film, so
she spent more than $200 on food & booze. Two years later, and the film hasn't been
made. Why? Her Producer was setting up a coproduction with the wrong half of the
money! He had the Matching Funds, which aren't really funds at all! So here's a quick
lesson in Indie film financing.
These days most companies only produce films in partnerships either with other companies or
with outside investors. You have probably seen the expansion of production company title cards at the beginning of a movie grow from one or two cards up to a half dozen or more. That's because money is tighter than ever in this economy and one company - even if they are on a studio lot with a studio deal - often can't afford to make a movie on their own. So this means instead of finding *one* company who wants to
make your script, there have to be at least *two* companies who want to make your script... and often there have to be a *half dozen* companies that want to make your screenplay...
and they have to get along with each other and want different rights: One will want
some foreign territories and the other will want domestic and the others will want other foreign territories.. Or a company will put up part the money (in
exchange for foreign rights) if the producer can find a private investor or cable TV company to put up the other
half. If you get dragged into this situation by an Indie Producer, it's good to know the
FIRST MONEY: Actual cash money invested in a film. It's real, it has
pictures of dead
Presidents on it. This money may come from the distribution company or an outside
investor, but it is *real* money in the bank... not the *promise* of money. Often this money is put in an escrow account so that other potential co-producers can check to see if it's really there. When we are talking about a film, we are talking about hundreds of thousands of dollars to *millions* of dollars pulled out of some better paying account and put into that escrow account. Even if they keep the money, they have lost money.
First money is the most difficult to get... it's like a bunch of high school kids down at the lake who want to go swimming (and maybe forgot their suits) - is the lake water freezing? Are there critters in it that might bite? Even bite them *there*! And who is gonna strip down to their skin first in front of the others? Someone has to jump in first, and that person is taking a big risk. The water might be freezing cold and cause massive "shrinkage"! There may be gators or crawdads or snakes that might bite them! And there's always the chance the others may just watch him jump in naked and laugh and walk away. First money is a major risk, but if someone actually puts their *millions* of dollars on the line, it will often attract other co-producers. They don't just get their feet wet, they have to dive in.
MATCHING FUNDS: A form of Second Money. Just a promise until you find First
Money. If you get someone to actually put up their millions, come back to us and we'll put up the same amount (or sometimes less - never more). Many companies will match funds from outside sources in exchange for foreign rights or some other rights (video used to be a major player, but after Neflix killed DVD and BluRay sales it is less of a factor now). If your producer only has Matching
Funds, they don't really have *anything*! I can get Matching Funds from a company who doesn't even know me with a phone call, because they are the second one into that lake.
Often Matching Funds are like the kid who says "If you do it, I'll do it." They don't actually risk as much because someone else has discovered whether the water is freezing cold, whether the cute girls laugh at you when you're naked, or whether a crawdad is gonna latch onto your private parts with their claws. Once that first guy proves it's safe, they'll jump in. Matching Funds often don't have to prove they have the money, and there are some producers who don't actually have any money... just know someone who does. If they can prove someone has already invested first money, their contact may be interested in investing... or not! Hey, that kid who says "If you do it, I'll do it" may not actually do it. I'm sure many a guy has jumped into a freezing cold lake naked because some cute girl said she'd go second... and then she never does.
SECOND MONEY: These days Second Money may not Match the worth of First Money - but be some small part of the budget... so you end up with lots of Second Monies (or maybe Third through Twelfth Monies). Often each major territory becomes part of the production - so you may end up with a half dozen or more European countries plus somewhere like Australia or New Zealand represented. A movie like Finland's IRON SKY is not only produced by a half dozen countries, part of the deal is that it's *shot* in some of those places (Germany and Australia in this case). Plus, the cast comes from all over the place in order to satisfy the needs of these different producers. These days a film production is like a jigsaw puzzle with all of the various producers as pieces that have to connect... or there is no movie.
Hey, I'll strip down and jump in if Lisa does... and Lisa will only strip down and jump in if Phil does, and Phil will only do it if Jennifer does, and Jennifer will only do it if Curt does and... things can get complicated and have many more chances to fall apart with all of these folks. And often they have competing requirements and everyone wants someone else to star or wants some rewrite... and in the end, no one gets naked and wet.
FACILITY DEALS: Sometimes Second Money isn't actual dollars, but deals on post production facilities or equipment or special effects *worth* part on the film's budget. I look deeper into Facility Deals in another Script Tip, but it's like someone at that skinny dipping party offering to bring the beer. They offer something of value that isn't money, but will help get the film made.
After the fall of the Soviet Union, my friend Jim and I were wandering through Location Expo and got tackled by the guy who was now stuck running the studio in St. Petersberg... which used to turn out films for the Russian government but was now a ghost town and *needed* people to come there and make films and spend money. They offered us all of the equipment the studio had if we paid crew wages... oh, and they'd get rights to ex-Soviet territories (which the USA had no way to sell anyway). Lots of places have studios that no one is using, and are eager to offer them in exchange for a territory or two. The producer on my never-ending MANHUNT project at MGM kept changing the country we were going to film in because he would find a better facilities deal. We started out in Mexico - a studio that was shooting a couple of syndicated American TV shows that got cancelled and needed someone to come in so that the crews could earn a living. From there we went to Portugal, and then to Eastern Europe... and then to South Africa. Each of these places was offering the MGM producer a better deal than the last... but that meant I had to keep rewriting the script for each location!
INCENTIVES: I *should* do a whole Script Tip on Incentives, which are kind of like facilities deals... except they're usually tax credits or rebates or sometimes actual partial funding for filming at some location. That might be a state or a country. In the USA Incentives are a constantly changing way to get your film made... and they kind of don't make any sense to me. They don't create any new jobs in the USA, they just change the jobs from one state to another. So if Louisiana offers a major tax rebate for filming there, films that would have filmed in Los Angeles go there to film because it will cost them less. At one point in time Louisiana had a low budget deal for films shot under $200k... they'd *give you* another $100k if you filmed in The Other LA. There are places like Costa Rica that offer a 40% rebate for shooting there, which means you can shoot a film with only 60% of your budget in hard cash (though you have to borrow the other 40% until you get your rebate). There are producers who are experts in incentives... but it's still a form of Second Money.
MATERIAL AND PACKAGING PRODUCERS: Then there are producers who don't have money, they have *connections*. There are producers who just option (or develop) screenplays and then take them to the producers with money to set them up. What I always find strange about these guys is that they are only as good as their connections... and sometimes *you* could get a great script to the same connections they have, and save the money producer from having to pay these guys off. A Packaging Producer is similar, but they have connections with talent and try to put together a "package" with your screenplay, a star or two, a director, and maybe some other element... and then take *that* to the producers with money. The problem with any package is it's only as strong as its weakest link. The producer may sign some "star" who can no longer open a movie, creating a *liability* for the project. Now they have to pay this faded star *not* to be in the movie so that they can hire a star who *can* open a movie. I always worry about "producers" who don't have any actual access to money. Yes, having stars attached can lead to money, but the kind of screenplay that can get stars attached doesn't need some guy with connections to help with that. The money producer can get people attached just as easily.
GAP FINANCING: Usually, even with a stack of co-producers, there still isn't enough money to actually make the film, which is where Gap Financing comes in. Gap Financing is a loan against the value of unsold territories. So if you have a USA/UK/GERMAN/FRANCE/AUSTRALIA/SPAIN/POLAND/ARGENTINA co-production, you can get Gap Financing using the money you will earn on sales to all of the other countries as collateral. This is becoming more and more important over the years, to the point there is now something called SuperGap Financing which does not wear a cape and fight crime... but deals with projects where there are *a lot* of territories that have not pre-sold. High risk. There are producers who are pros at Gap Financing and Facilities Deals and Incentives... and producers who have no idea how these things work. As feature film production moves away from 100% funded by big studios to co-productions, lots of producers who only know the studio method are having to scramble to learn how to get their films funded.
REAL PRODUCERS? Whether they have first or second or monopoly money, people often ask how you can tell a producer is "real"? One of the methods people have mentioned is whether they have a website... except that really doesn't make any sense. A film producer is not someone who works in the public eye, so they do not need a website. They aren't selling anything, offering a service, etc. They don't even need to publicize their films - the distributor is responsible for that. So Silver Pictures (THE MATRIX) has no website... but there's a good chance some podunk producer who has never made a film *does* have a website. Hey, I have a bunch of websites. Costs almost nothing to have a website, costs millions to actually make a film.
The other theory is a real producer has a real office. Though this is usually true, sometimes a big studio producer leaves one studio and is waiting for another studio to pick them up... but still making movies while they wait. So they work out of some temporary office... or their pool house. A producer I've worked with (who makes big studio films) lives down the street from the Jackson Compound and has an office in his *huge* two story pool house. That place has at least a dozen different rooms and is bigger than most houses I've been in. So "working out of their home" may not be a strike against the producer.
The real way to judge a producer? What have they produced? Producers *make movies for a living*. So if some producer is interested in your screenplay, look them up on IMDB and see what they've actually produced.
Often USA screenwriters see those arty foreign films and think they would be more at home writing films for producers far far away from home. Aside from potential commuting problems for meetings, the larger problem ends up being that most writers in the USA don't understand the difference between foreign mainstream and foreign indie films and how each is financed. It's not how you think.
"Mainstream" foreign films are often funded through government arts programs or lottery money or some other government program... so these films usually have to be government approved, and that usually means *arty*. "Independent" foreign films are made outside the government system so they are funded by sources out to make money, and usually end up being commercial genre films. Yes, that seems completely backwards. It also usually means that the type of more laid back dramatic noncommercial films that the government programs favor are arts films that have all kinds of conditions attached. Main condition is usually that you be born and raised and a resident of that country to sell them a screenplay. These arts programs are designed to help *local artists*, not people from America who just don't like American Films.
I don't know everything about other countries, but I know *a lot* about Canada's rules because I've fought to get a credit once, and lost a handful of jobs because I wasn't Canadian. You may have seen those InkTip script searches where *you must be Canadian* to submit. There's a reason for that: To get funding in Canada, you need a certain amount of "Canadian content"... people involved in key positions on the film who are Canadians. The government money is all about keeping *Canadians* employed and making *Canadian* movies. Canada has a 10 point system. Each key job on the film gets a point. The more points, the higher the tax credit or government investment. I think if you have less than 7 points, you're on your own. Scripts account for 2 points - story and screenplay. That means if you want to sell your script to a Canadian company, the stars, director, and other key jobs *have* to be Canadians. That means the Canadian producer has to decide between buying a US script and only being able to hire Canadian movie stars, or buying a Canadian script and hiring US movie stars. Most other countries have similar systems in place, which is why it's hard to sell to a foreign company.
If you plan to sell your script as a foreign co-production, you should know what that entails.
If you plan to sell your script to a domestic Indie, you should know how that works.
It's hard to imagine anyone going on a job interview and not having a clue about the company: what they do, what kind of people they are looking for, what kind of skills are required... Well, it's hard to imagine going on that interview and getting the job. We have some idea of how mainstream movies from studios work, because we've seen so many of them. But there are still some producers who specialize in a genre, or were recently burned in a genre, or only make a certain kind of film. Would you pitch your rom-com to Mace Neufeld? No - they make the Tom Clancy movies. Closest they got to a rom-com was co-producing "The Saint". Part of our job as screenwriters is to know how the film business works... the business we are working in or want to work in... operates. If show up at a job interview at McDonalds and have no idea that they make hamburgers, they are not likely to hire you.
Whenever you are dealing with an Indie Producer or any other producer, make sure they actually have access to funding. Anyone can go down to Staples and have business cards made that say they are a Producer for $20... A real Producer has actually produced films and brings something to the project that a distrib or financier will find valuable (cast, money, etc.). And make sure the Producer's funding is *first money*, not the promise of money once they find first money. You don't want to celebrate selling a script that will never be made!
Okay... are you ready to strip down and jump in the lake?
Go ahead! You first!
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DESCRIPTION & VOICE Blue Book!
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E BOOKS PAGE
E BOOKS: New Blue Books and Novelettes!
I am expanding all of the Blue Books from around 44 pages of
text to around 200 pages! Some are over 250 pages! See what is availabale and what is coming soon!Also, I've been writing Novelletes and there
will soon be novels.
E BOOKS: BLUE BOOKS & NOVELLETES
MY OTHER SITES
B MOVIE WORLD
Cult Films, Exploitation, Bikers & Women In Prison, Monster Movies.
FIRST STRIKE PRODUCTIONS
Producing my own scripts, investment possibilities, pipe dreams.
NAKED SCREENWRITING CDs
The NAKED SCREENWRITING CLASS ON CD!
The 2001 London Class on 8 CDs! Recorded *live* the morning after the Raindance Film Festival
wrapped. The two day class on 8CDs, plus a workbook, plus a bonus CD with PDFs.
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BOOKLETS & PRODUCTS
FIRST STRIKE BLUE BOOKS
Each Blue Book is 48
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THE SECRETS OF ACTION SCREENWRITING The Best Nuts & Bolts Screenwriting Book On The
nineteen produced films, interviews with me in magazines,
several sample scripts, my available scripts list... And MORE!
CLASSES ON CD
CLASSES ON CD! Take a class on CD! GUERRILLA MARKETING - NO AGENT? NO PROBLEM! and WRITING THRILLERS (2 CDs). Full length classes on CD. Now Available: IDEAS & CREATIVITY, WRITING HORROR, WRITING INDIE FILMS, more!
Take classes on CD!