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For indie film producers, the lack of domestic distribution opportunities inside the U.S. has made it more difficult to gather funding for movies solely through international pre-sales. Many producers are now turning to global co-production deals and foreign tax money soft money as one funding solution. These types of deals aren’t new, but have been gaining more prominence as some of the other funding mechanisms experience cash-flow problems. The benefits and obstacles of the international co-production was highlighted on Monday at a Tribeca Film Festival panel titled, “Going Global: Will Co-Production Save the Film Industry?”
Some producers speak highly of the opportunities.
In January, Endgame Entertainment made one such deal with Chinese co-producer DMG for Looper, from writer-director Rian Johnson, a time-travel action movie set to star Joseph Gordon-Levitt, Bruce Willis, Emily Blunt and Chinese actress Xu Qing, considered to be the Julia Roberts of the country.
At the panel, Cindy Kurven, chief operating officer at Endgame, spoke about engaging FilmNation, a international sales agent, before being approached by Chinese buyers. DMG, known as an advertising firm at the time, was interested in geting into the film business — an enticing prospect for Endgame. Kurven cites a statistic that three new theater screens are built every day in China and that the country would soon have more theaters than in the U.S.
Having a Chinese firm as an assistant co-production outlet offered tremendous access to both the market and needed funds. DMG covered some of the production costs, offered minimum guarantees on distribution in China, and covered marketing costs too. But the deal also had to go through an onerous process to pass the country’s censorship authorities and have DMG approved by China’s film board. Still, DMG handled the process and Kurven believes that a co-produced Chinese film about a “gleaming future” would have no problem getting qualified.
Nevertheless, every international deal has certain challenges and this one was no exception. Johnson wanted to bring a certain camera from Louisiana into China for shooting. The film also required a certain concept car that required, Kurven’s words, “a line producer literally waiting at the airport to make sure it got through customs.”
The hidden costs of doing international co-productions aren’t always understood properly, says Milan Popelka, COO of FilmNation, whose sales credits include The King’s Speech and The Skin I Live In. One issue is currency fluctuations. What might seem cheap one day sometimes becomes more expensive as the exchange rate changes. Bond companies will often require productions to lock into a certain rate. Another issue is legal costs. Popelka mentioned one of his films set in a foreign country that experienced problems when the legal budget suddenly went from $400,000 to $1 million.
In other words, chasing this kind of funding sometimes has a price.
“International money is really complicated and you have to think about the big picture,” he says. “It’s necessary to have a holistic view — what’s good for the movie? No matter how much you get, you also need to measure how much it costs to shoot there.”
Still, being in the international sales game, Popelka is optimistic, and says he likes to work in Eastern Europe, where experienced film crews are on hand and rebates are as high as 20 percent. “In doing the calculations, Serbia always comes out well,” he says.
Many of the participants on the panel spoke about the moment when funds all start coming together — almost a tipping point.
Tania Zarek, CEO of Bonita Films and co-producer of The Girl, which is showing at the Tribeca Film Festival, mentioned the “Catch 22” of the indie financing business where “some investors won’t release funds until others do.”
On The Girl, which stars Abbie Cornish in a border tale, Zarek found a Mexican partner — “the first step,” she says — and then exploited a “226” tax incentive that she says is proportional to the investment so long as 80 percent is spent in Mexico or towards Mexicans.
“I think co-productions are of my generation,” says Zarek. “The frontiers are really opening.”
The formula also worked for Namir Abdel Messeeh, the director/producer of The Virgin, the Copts and Me, a documentary about the French-Egyptian filmmaker’s travels to his birth village and Egypt’s Coptic Christian community. He helped fund his film through a grant from the Doha Film Institute, who he credited for giving him creative freedom.
Working in international terrain sometimes presents funding anomalies, especially as current events hang in the background. For example, doing a film that wasn’t pegged to the Arab Spring might have held some advantages for Messeeh when competing with other films at Doha all about the revolution. His funders there didn’t care about the lack of overt politics, he says, and in fact, liked that he was making a family film. Back in France, on the other hand, he kept getting asked about what was going on in Egypt, with some people suggesting that if he put a scene in about the revolution, it would sell easily.
“But it wasn’t my subject so I wasn’t going to do it,” he says. “It took me three years to make this film and I did it without thinking too much about the money. You have to be clever.”
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