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This story first appeared in the April 22 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
Gary Pearl, formerly a William Morris agent and production executive at Paramount Pictures, now is co-chairman of Aquarius Television and an executive producer on The CW series Jane the Virgin. He is set to speak April 13 at New York’s Dream Downtown hotel during the eighth annual TV & Film Finance Forum East, as part of “Independent Moves: Strategies for Transitioning From Film to Television” (Jane was independently financed and later partnered with CBS). THR, the event’s media sponsor, spoke with Pearl about the state of the industry.
What are the similarities between financing movies and TV shows?
Independent filmmaking has always been about finding money in various ways and making projects that feed your passion. TV has been about selling to the broadcast networks, so it necessitated a level of pragmatism in story choice. It is also more commonplace for TV producers to find distributors across the world and soft money — in the past associated with independent film models — to offset some of the upfront costs associated with making projects for the small screen. This has made coming to television easier for indie film producers to understand than for people who grew up as TV creative producers.
International has become increasingly important. How has this changed TV finance?
It used to be you’d have a deal with NBC, for example, and they’d sell the international. Now, as financiers, we have more control: We can decide to make something, and the U.S. is just one more territory. The last few years have seen the importance of foreign financial partners.
How are OTT services affecting TV financing?
When you go to Netflix, Hulu or Amazon, they ask you how much money you need — they tell you to make it and come back. In broadcast, you have an internal budget: They know they’ll have a deficit, then they’ll break even after selling internationally, then they’ll have a library of 100 shows for syndication. They don’t do that at Netflix. They see a show that could increase subscribers by a million, so they know they can make $7 million more a month. The large OTT companies are functioning more like studios, where their appetite is to co-own or own entirely the homegrown productions that reinforce and build their brand accordingly.
What is your opinion of television in general, creatively speaking?
The studios are making a lot of franchises, leaving a lot of talented people without the ability to make films. The audience is embracing that quality on television. Take Jane the Virgin, for example: We could have told that story in a movie, but we’ve gone deeper as a TV show — and I love that.
Networks often want to own their shows. Is that a problem?
It’s great for independents who had a problem getting real ownership. The easing of fin-syn [network program-ownership rules] 15 years ago caused problems for studios and their ownership, but that model has now matured — and the small independent is one of the beneficiaries of that changing model. There’s more opportunity in TV because banks are valuing television, so more independent producers can function the way studios have. Independent producers are getting presales and estimates across the world that they show banks to validate their shows. WME started an independent TV division, saying there’s a lot more opportunity in TV to finance shows without having to go to the principals with the lines of credit.
What are the big challenges that could derail your optimism?
Quality of product. It’s a lot more democratic than it used to be, but alternatively we live in a very fast period — fast to market and fast to judgment. The audience is insatiable at the moment. The challenge is the same as always: Once something works, everyone copies it.
What’s the learning curve?
The financing game is not for everyone. It’s complicated beyond what we’ve discussed, and it’s worth partnering with producers and others who understand the process rather than trying to take the entire pie. There are a lot of producer titles on projects in indie film and increasingly more in television as the one- stop shopping of network pilot sales disappears. It’s the people who spend their lives in television that will have access, and people should not think as a rule they can just walk in and make it work.
From Credit Crunch to Flush With Cash
In 2009, THR was running stories about a “credit crunch” that had Wall Street avoiding the entertainment industry. “The equity players who are left are being very careful and diligent about the investments they are making,” Katherine Winston told THR at the time. Fast-forward seven years, and Winston Baker, the company she co-founded with Amy Baker, is producing its 37th conference focused on entertainment and finance. “We went from ‘queasy money’ in 2009 to loads of money in present times,” says Winston, whose next event, the eighth annual TV & Film Finance Forum East, will take place April 13 at New York’s Dream Downtown hotel.
About 150 people are expected to pay as much as $695 apiece to attend the conference. Speakers include Broad Green Pictures CEO Gabriel Hammond and chief creative officer Daniel Hammond; Brian Hunt, head of development at Believe Entertainment; Eileen Burke, founder of West End Capital and Advisory; Courtney Lauren Penn, founder of Boundless Pictures; and IM Global COO Chris Bosco.
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