How to get indie movies made now
EmptyThe road to Sundance can be long and lonely. Consider the journey of Jake Scott.
The 44-year-old director spent months searching for money for "Welcome to the Rileys," about a grieving middle-age man who finds salvation by rescuing a teenage stripper. Scott was shopping the dark, lowish-budget drama at precisely the time when studios and specialty divisions were slamming the brakes on those kinds of features.
True, he had a little financial help and a lot of emotional support from a filmmaking family that includes father Ridley Scott and uncle Tony Scott. But that wasn't enough to get his film made. It was barely enough to secure a meeting with two key financiers, Argonaut Pictures principals Scott Bloom and Giovanni Agnelli.
Bloom and Agnelli had been in business together for years, launching a soft drink company and opening a nightclub. They wanted their first foray into movie-making to be a commercial success, and advisers strongly warned them about the troubles in the indie sector. But finally, intrigued by the script, the pair showed up at Scott Free's offices in West Hollywood on a sunny afternoon in August 2008 to let Jake pitch.
Scott got his $7 million project fully financed by Argonaut. He arrives in Park City this week as a rare good luck story amid one of the worst periods for indie filmmakers in a generation.
"This is one of the hardest times I've ever seen to finance a film," says Hal Sadoff, ICM's head of international and independent film.
Just as producers are finding it tougher than ever to presell foreign rights, there is also less access to mezzanine and bridge financing thanks to a tight debt market, and state production incentives are being questioned nationwide. Most of all, the decline of distribution outlets, including the recent downsizing or closure of Miramax, Paramount Vantage and Warner Independent, has caused financiers to shift their strategies for recouping film investments -- if they decide to invest at all.
Some of this year's Sundance titles arrive almost miraculously. Consider "Blue Valentine," for example.
In 2006, Derek Cianfrance won a screenplay competition sponsored by the Chrysler Film Project, providing him with $1 million for his film plus the promise of P&A support. David Bergstein's ThinkFilm came on board to pick up the rest of the tab and sell international rights.
Jamie Patricof at Huntington Lane Films, who toiled as a producer on the film for five hard years, calls the experience a "roller coaster of stops and starts, directly related to the economy being so unstable."
During this time, Graham Taylor at WME worked furiously to raise the needed money. "The reality is that you need to get more creative these days," he says.
Eventually, Cianfrance was able to complete the film with stars Ryan Gosling and Michelle Williams after the gap in financing was covered by Incentive Film Entertainment, a joint venture between WME and Screen Capital International. Now WME is selling U.S. distribution at Sundance.
Film finance gurus say these kinds of new strategic partnerships are helping to fill the hole left by the hedge funds and high net-worth individuals that have abandoned the business since the recession took hold.
Even with so-called vanity producers (individuals attracted to the glamour, if not the fiscal prudence, of making movies), the trend these days is toward a different kind of equity investor. Those who have the money, and are interested in film, want to play a greater role in the filmmaking process. And because the moneymen are being flooded with scripts, the deals increasingly come with strings attached.
"We're not just seeing one-off Wall Street guys who are investing their bonus checks in films," says finance lawyer Andrew Hurwitz. "These days, equity tends to be more serious, active and controlling. These are men and women who love art, have formed small companies, and are going into business to produce movies."
Elizabeth Redleaf and Christine Walker are two such producers. After raising enough capital from film lovers in the Minneapolis area, the duo set up shop as Werc Werk Works, sending out a release at the 2008 Telluride Film Festival announcing they would produce and finance three or four "high-caliber, story-driven films with wide appeal" per year.
The ink on the release was barely dry when William Morris sent the new company the script for "Howl," set to star James Franco as poet Allen Ginsberg.
Before greenlighting the film, Redleaf and Walker insisted on flying to Los Angeles to meet all of the principals, including Franco, to gauge how seriously committed he was. The producers also wanted to make sure there weren't any "encumbrances," like previous deals made with other investors, that would have intruded upon their opportunity to play a leading role production.
Werc Werk Works must own at least 51% equity in a film and prefers to have it all, Redleaf says. In the case of "Howl," the company was able to fully finance the film by negotiating the budget down to slightly less than $5 million. At that price, the principals felt they could eke out a profit.
"One of the reasons financiers become so disenchanted is that there has traditionally been a lack of caring about returning investor money," Walker says.
But with financiers now able to call more shots from the beginning of a project, many believe that equation is changing. At the same time, the dwindling prospect of an immediate payday in the form of a domestic distribution deal is causing financiers to evaluate potential investments more carefully.
"I would have a line out the door of people willing to give me equity in certain projects if they saw distribution," says Anonymous Content producer Steve Golin.
And even when a distributor does show interest, producers and their reps are being forced to accept complex recoupment structures rather than the upfront fees of yore.
"With all U.S. distributors, it's shifting to more of a partnership, share-the-backend kind of a relationship," says Bob Berney, head of distribution entity Apparition. "There are so few distributors (that) a lot of producers take deals just to get their film out. And they probably won't see a lot in return."
Berney says he and Pohlad are careful to keep their two companies separate, but getting a first look at a film budgeted at less than $10 million and featuring two of the stars of "Twilight: New Moon" was certainly an advantage.
"We didn't really decide until the film was completed, but we talked it through and it seemed like this one would be a perfect fit for Apparition," Berney says.
Even without that kind of unique relationship, there are optimists who believe there are rays of hope in the indie field. CAA's Micah Green says that, as studios cut low-budget movies from their slates, producers are being sent better material, and actors are willing to work for less to get into awards-potential films.
"There are a lot of people who are out there hustling to put together ventures to take advantage of the tremendous opportunity right now," Green says. "This is a great time for producers to prove their mettle to develop cost-effective projects with high-end talent."
One of those producers, Raymond Markovich of Parallel Media, invested about 60% of the $18 million comedy "High School." The rest was picked up by Michigan production incentives. The comedy, by first-time filmmaker John Stalberg Jr., has no domestic distribution deal in place, but, like many recent indies, "High School" was financed with a P&A cushion just in case a distribution deal can't be made.
"Before, there were limitations because indies couldn't self-distribute," Markovich says. "But these days, with digital projectors, it's not that tough."
That sentiment might be optimistic, but plenty of upstart producers are still willing to put their own money into projects or to ask family and friends for financial support.
Ron Simon at SimonSays Entertainment says he took out margin loans secured with his own assets to fund most of Tanya Hamilton's $5 million period drama, "Night Catches Us." For the rest of the money, he called business friends, explaining the risks and upside -- and, more importantly, that the story set in the post-civil rights era of the 1970s needed to be told.
"I certainly wouldn't pitch indie filmmaking as a traditional kind of investment," Simon says. "Many indie films won't recoup, so in large part it's got to be a passion project."
But, as every good film pitchman knows, lightning can always strike.
Case in point: At that August 2008 meeting between Argonaut Pictures and Jake Scott over "Welcome to the Rileys," much of the discussion centered on whether Stewart had what it took to play the female lead. At the time, Stewart was little-known. Scott cast her on the recommendation of his friend, Sean Penn, who had used her in a small role in "Into the Wild."
A couple months later, "Twilight" became an international blockbuster and Stewart became one of the hottest actresses in town.
Now, heading into Sundance, Bloom says he's being solicited by distributors on an almost hourly basis. "We had a lot of people who were telling us not to do this movie," he says. "It's amazing how things take off."