Climate 'great' for indies
Panel: Equity financing on riseEquity financing is back, and investing in a wide slate of films is all the rage, American Film Market attendees were told Sunday at a panel entitled "Who Backs Movies and Why."
William Morris Independent co-head Cassian Elwes, Sidney Kimmel Entertainment senior vp production Holly Becker, Cherry Road Films CEO Bo Hyde and Participant Prods. executive vp documentary production Diane Weyermann spoke to an overflowing room at the panel, hosted by Film Independent and moderated by entertainment lawyer Michael C. Donaldson. They dealt with how films get financed and the state of the marketplace.
"Gap and super gap financing, Section 181 (tax deductions) and presales take up about 70%-80% of financing a film, but getting the rest in equity has always been the hardest part," said Elwes, whose division helped along 27 projects last year. "The climate is now so great for equity partners. We're seeing groups running for this. It's one of the best environments ever for financing independent film."
More investors are learning to put money into a range of projects, often around six to 10 at a time. "Investing in a slate of films is not as risky as one crapshoot," said Hyde, who coordinates allocation of capital from several high net-worth investors. "There'll be some breakouts, a couple that break even and some that lose money, but you can make a profit."
Becker, whose company is interested at the moment in finding political thrillers and psychological horror films, said that under- $5 million projects are the most difficult to finance today. Elwes agreed. "They're the lifeline of independent cinema, but they're very time-intensive to put together for a small profit," he said.
Many people were interested in the types of films each company would back and how to get them made. Weyermann, whose company is beginning a "Train the Trainer" program to have people duplicate Al Gore's speech from "An Inconvenient Truth" around the country, jokingly said she'd be open to a "socially responsible horror film." Aspiring docu filmmakers were welcome to submit a treatment directly, she said, but narrative filmmakers need to go through an agent or lawyer.
Elwes delivered the most practical advice of the day, however, to the crowd of producers looking to pitch their product. Namely: Arrive for a meeting with a full production plan, don't give any long pitches (five lines is ideal), and don't say the script needs work.
"If you think it does, why am I going to read it?" said Elwes. Most importantly, he added, don't approach him with a pitch in the bathroom, and "don't bullshit" him about having a director, actor or anything at all. "I know everything that's going on. I know all the con men, all the people from prison, and in 10 minutes I can find out the truth," he said. "My life's too short."