AFI's Art of the Deal Class

Chris Schwartz/Bob Kaplan

Bob Kaplan, the school's longest-serving teacher, recalls the origins and history of its unique course on the nuts and bolts of the film business.

AFI’s longest-serving teacher, Bob Kaplan — he first started teaching in 1978 — a lawyer, studio executive and producer, recalls how his first of its kind class, The Business of Producing, came about and why film school students need to learn the art of the deal.

A producer named Marty Hornstein called me up — I helped him with his first deal — he said, “I’m teaching the class to the students at the AFI would you come in and talk about contracts?" So I go one night for three hours and the students went nuts. What I learned: If you're a director of photography you can take your footage to peers to get comments or if you're a writer or director. But if you're talking about the business side of it, peers don't know. How do you get your movie financed? How do you make an actor deal? How do you acquire rights in a book? You need somebody who's done it before to explain it. Tony Vellani, the original dean, says, "Could you turn that into a whole course?” There was no film school anywhere ever that did it.

I mainly lecture, but I also bring in guests from the business, such as Mike Medavoy, Ken Kleinberg, Mace Neufeld, Peter Guber, Tony Bill. David Greenblatt, who was a student and then went to CAA, has come in. One of my favorite students was Shalena Oxley, who’s now a very successful effects producer. Others who took the class include Stan Brooks; Pieter Jan Brugge Steve Golin, the head of Anonymous Content; Harris Sherman, who runs Russell Simmons' company; Paul Merryman at Sam Raimi's company; Rodrigo Garcia, who's now running John Avent's company; and Jessica Freeborn, who ended up being an executive at Focus and many others. Chady Mattar and Scott Silver have produced five or six films since graduating.

Although I hand out sample agreements and discuss them, I make it clear that I don't want to make them lawyers. What I talk about are things like why we use option agreements to acquire literary rights in books or scripts, or investor psychology: How do you talk somebody into giving you money for a movie? Here's a question that always comes up, and people don't think about it, so I have to explain it: You go to somebody, "I need a million bucks." The investor says, "OK, I'll give you a million bucks." If the investor is smart or if the investor has a lawyer, the first question they're gonna ask is what if the movie goes overbudget? I'm giving you a million bucks, but what if it costs $1.1 million? Who's putting up the other $100,000? So I go through a whole thing about what a completion guarantor is and how that all works and why they exist.

What I noticed with these young students, not only do they not know the actual business terms — What is an option? What is an option period? What's a purchase price? — but they also have no experience in sitting down and trying to actually make a deal with somebody. How do you do? Take you out for a cup of coffee? Give 'em a half a bottle of bourbon before you start the negotiation? How do you actually do that?

I decided that what we really needed to do was I had to teach them how to negotiate. Forget Donald Trump — there are actual good books on negotiation but I wouldn't put The Art of the Deal among them. I felt the students needed actual experience. I organize mock negotiations and have the students actually negotiate. I take over the main room at the AFI and I divide the whole class into eight teams — foreign sales agent, the bank, the producer, creative producer, the director. The movie's financed. The director's pay or play. The actor's pay or play. The completion guarantor comes in and says you're $750,000 short.

All of a sudden, everybody's got to get together to get this movie made. You got to cut the budget. You got to go get more money. They all have problems. I say, “Here's the rule: The rule is there are no rules.” Many of these students come in afterwards and say that the most important classes are these mock negotiation sessions because it not only gets rid of the fear that they have of doing that, but what it does is it takes the thinking from their head and puts it into their stomach. It's AFI moot court.