Film financing
What will it cost? How do you pay for it?
Filmmaker's Video
Finding the right business match.
(Video courtesy American Express Open Forum.)
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Making movies is the most expensive art form there is. If you've got a rich aunt that loves to spoil you skip to the next section. If you're like everyone else then prepare to grovel and scrounge. It may take years and a loss of pride but if you truly believe in your idea you'll do whatever it takes to make your movie.
You are now the producer of your new film. This is one of many roles a filmmaker plays during the life of a film. The producer's first job is to find the money.
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While we are on the subject of producing you may be wondering what all those different "producers" are that you see listed at the beginning of a movie. The fact is the titles are not officially defined and are often given out as inducements to get financing or other aid in getting the movie made. Generally speaking the titles mean approximately the following:
Producer is the person who first had the idea for the film and/or found the original novel or screenplay or treatment and/or found the director and actors who would agree to do the film and/or headed up the effort to sell the idea to financiers and distributors and generally herded the movie through to completion. When a movie wins the Academy Award for best picture the Producer get the statue.
Executive Producer is a money guy/gal. S/he took out the wallet that paid for the film or talked the money from the other people who together came up with the money.
Associate Producer is often a somewhat honorary title given to someone who was vital to getting the film made in a smaller capacity, such as helping uncover a source of financing, but had no other involvement with the film.
Coproducer is sometimes the nephew of the person who actually financed the film, although sometimes it is someone who really was involved in some part of making the film happen but in a much smaller capacity than the true Producers.
Line Producer is the guy/gal in the office or on the front lines, following each step of the film getting made, writing checks, reporting to the Producers and Executive Producers and possibly the Director. Making sure that the money is well spent.
The Line Producer is sometimes the same as, or in charge of, the Unit Production Manager (the UDM). The UDM is also responsible for following the day to day activities on the set and making sure the money is used most efficiently.
If you are a big Hollywood studio, accountable to shareholders, then you want all these people to make sure the $100 million being spent on this little fluff romantic comedy isn't being wasted. If you are an independent filmmaker you probably double as all these people except for the Executive Producers, who are the people you talked into paying for your film.
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Get started
Ask yourself what kind of movie you're going to make.
Is this one of your short learning films? Or do you think you are ready for a serious attempt at creating a feature film you hope to sell?
Your budget and what you do during preproduction are very different depending on what you are trying to create.
If this is your first short film you don't need to worry about finding money to finance it because you won't find any. Unless you have a rich aunt who loves to spoil you no one is going to give you money to make a film until you've proven yourself.
When you've made a short film for a few hundred dollars out of your own pocket that gets into a festival and people really enjoy watching, then you'll find people are open to helping out, letting you borrow equipment and providing other non-cash, or small cash support.
When you've shown you can make short films that win festival awards and now you've got a Great Script for a feature, then you will find a few people are willing to risk a couple of thousand dollars in exchange for seeing their names on the screen and a piece of the action, if it sells.
Make a successful $10,000 film that returns a profit and people will be willing to spot you $100,000.
Make a successful $100,000 that returns a profit and the phone will start to ring with big time financiers wanting to get in.
Business Plan
Your tool for making your dream come true is your business plan. Your business plan should contain the following.
- Your business cards
- The screenplay with a one or two page synopsis
- The film's budget with as much detail as possible
- Resumes or biographies of all the talent--Director, writer, producer, cinematographer, crew with notable credits and your cast
- If you have a name star in your cast be sure to feature them in a big way
- Reels (best scenes shot by the cinematographer, director and cast members on VHS tapes or DVDs)
- Your marketing plan
- Anything else that might be helpful
- Articles on film financing
- Glossy photos of your actors
- Photos of previous productions you crew have worked on
- Production artwork
- Costume designs
- Storyboards
- Mockups of posters
- Anything else that might possibly seem impressive
- Comparisons to any other similar indie movies that were successful
Here's a list you can use of low budget indie movies that made big returns:
| Name | Budget | Gross |
| El Mariachi | $7,000 | $2,000,000 |
| Pink Flamingos | $12,000 | $10,000,000 |
| The Brothers McMullen | $24,000 | $15,000,000 |
| Clerks | $27,000 | $3,000,000 |
| Blair Witch Project | $35,000 | $140,000,000 |
| Supersize Me | $65,000 | $17,000,000 |
| The Legend of Boggy Creek | $120,000 | $27,000,000 |
| Roger & Me | $140,000 | $12,000,000 |
| Tadpole | $150,000 | $2,800,000 |
| Halloween | $320,000 | $90,000,000 |
| Benji | $550,000 | $65,000,000 |
| Friday the 13th | $650,000 | $80,000,000 |
| Sling Blade | $1,200,000 | $40,000,000 |
| sex, lies and videotape | $1,200,000 | $110,000,000 |
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You want to assure any potential investors that you have thought of everything and that there are reasonable odds that your project can make money. You need to be honest about the risks of investing in a motion picture but you can also emphasis the possible upside.
Include the statement: This is not a prospectus but is purely informational in nature. This gives you greater freedom to approach potential investors without getting in trouble. And talk to a lawyer!
Make it look as professional as possible in a glossy binder so the potential investors know they are buying into a classy production.
The Budget
Always make up a budget. I know it sounds really boring and uncreative but it's good discipline and will be a necessary skill you will be glad you learned now.
Typical Hollywood studio budgets run around $50 million. Most of that goes to one or two big stars and possibly the director. You will probably never have a budget like that available to you so lets get real and go through the kinds of budgets you might be able to touch.
The No-Budget Budget
For the first time filmmaker doing a weekend short you want to work backwards from what you can afford to what you will spend it on.
How much can you run up on your credit card and not hate yourself for the next six-months if your first film attempt is less successful than you had hoped?
A one weekend short with a small crew of friends and actors working for free should cost you under $1000 unless you have to buy equipment as part of the expense. The major expense will probably be feeding everyone.
It will probably cost more than you would first guess but don't scrimp on food. One of the oldest truisms of filmmaking is that if your crew and cast are well fed they will follow you almost anywhere.
If you don't have equipment--camera, lights, microphone, etc.--then you could be looking at a lot more money.
To keep equipment expenses down try the following, in this order:
- Find, or make, a friend who just bought a fancy new camera and would love to have a reason to use it. (Remember that filmmaking is a collaborative art and you will need filmmaking friends to succeed.)
- Find, or make, a friend who just bought a fancy new camera and will rent you the use of it for very little money.
- Find a rental house that can rent you a basic video package for the weekend for a very cheap rate. Be warned that professional rental houses that rent pro gear to professionals will probably want proof that you have special film production insurance which might cost more than the cost of the equipment.
- If you're really cheap and desperate do what the Blair Witch folks did. Buy a camera from a shop with a liberal return policy. Shoot the film, then return the camera for a refund the next Monday.
- Buy the camera of your dreams. Maybe you can rent it to some other filmmakers to help cover the cost.
Camera technology is advancing so fast that owning is often the worst option. By the time you make the next film your new fancy state-of-the-art camera will be old news. Get used to renting or borrowing cameras. Even the big-time filmmakers usually rent.
Getting a camera is usually the easy part. Good sound and lighting are at least am important as using a decent camera, often more so.
A good microphone, mixer and boom plus a few good basic lights can set you back more than the cost of a decent camera. What's even worse is that unless you live in a major filmmaking center like Los Angeles you will find it a lot harder to make a friend who actually has this kind of equipment. Back to the rental store.
I'll talk more about getting equipment in the section on filmmaking equipment.
| Actor's expenses |
300 |
| Above the Line Expenses |
300 |
| Equipment rental |
500 |
| Food |
200 |
| Production Expenses |
700 |
| Editor |
0 |
| Editing equipment |
0 |
| Postproduction Expenses |
0 |
| Total Budget |
1,000 |
The Typical $100,000 Filmmaking Budget
For the filmmaker who is ready to do a first feature the budget gets a little more complicated. This will probably be a shoestring or no-budget film unless that rich aunt is still feeling generous. It will still cost you quite a bit of money.
| Writer/director/producer |
Profit points |
| Cast |
15,000 |
| Above the Line Expenses |
15,000 |
| Assistant director |
1,500 |
| Production/art designer |
2,000 |
| Script supervisor |
1,200 |
| Cinematographer |
5,000 |
| Assistant camera operators (2) |
3,000 |
| Gaffer/electrician |
2,000 |
| Grips (3) |
3,000 |
| Sound mixer & boom operator |
3,000 |
| Makeup & hair |
1,000 |
| Photographer & production assistants |
0 |
| Craft services & food |
10,000 |
| Props & sets |
1,500 |
| Wardrobe & makeup |
500 |
| Camera rental |
5,000 |
| Lighting rental |
5,000 |
| Dolly |
2,000 |
| Tape stock |
200 |
| Sound equipment rental |
1,500 |
| Trucks & gas |
1,000 |
| Location fees |
1,500 |
| Insurance |
3,000 |
| Office supplies |
500 |
| Total Production Costs |
51,400 |
| Editor |
5,000 |
| Editing equipment |
10,000 |
| Composer |
1,000 |
| ADR |
1,000 |
| Sound edit |
2,000 |
| Total Postproduction Expenses |
19,000 |
| Contingency |
0 |
| Total Budget |
87,400 |
The Million Dollar, Big Indie Filmmaking Budget
| Writer |
$20,000 |
| Director |
30,000 |
| Producers |
30,000 |
| Cast |
180,000 |
| Taxes, health |
25,000 |
| Above the Line Expenses |
285,000 |
| Casting director |
16,000 |
| Extras |
4,000 |
| Unit production manager |
16,000 |
| Location manager |
6,000 |
| Assistant directors (3) |
14,000 |
| Production/art designers |
10,000 |
| Props supervisor |
2,500 |
| Script supervisor |
5,500 |
| Cinematographer |
12,000 |
| Assistant camera operators (3) |
14,000 |
| Gaffer |
6,000 |
| Electricians (2) |
8,000 |
| Grips (3), dolly grip |
16,000 |
| Sound mixer & boom operator |
10,000 |
| Costume designer, assistant |
7,000 |
| Makeup/hair artists (3) |
11,000 |
| Still photographer |
4,000 |
| Production assistant's expenses (5-8) |
1,000 |
| Payroll taxes |
10,000 |
| Craft services and food |
22,000 |
| Props |
3,000 |
| Set construction |
14,000 |
| Wardrobe and makeup |
3,000 |
| Expendables |
2,000 |
| Camera package rentals |
24,000 |
| Lighting/grip package |
14,000 |
| Dolly |
7,000 |
| Film stock |
30,000 |
| Audio stock |
4,000 |
| Sound equipment rental |
6,000 |
| Trucks/drivers |
4,000 |
| Electrical generator |
6,000 |
| Location expenses |
14,000 |
| Insurance |
30,000 |
| Permits |
6,000 |
| Police |
4,000 |
| Legal |
10,000 |
| Lab fee for develop/telecine |
50,000 |
| Total Production Expenses |
426,000 |
| Editors |
16,000 |
| Editing systems |
8,000 |
| Composer/musicians/recording |
20,000 |
| Music rights |
50,000 |
| ADR |
6,000 |
| Sound editor, mixing |
20,000 |
| Negative cutter |
5,000 |
| Opticals and titles |
14,000 |
| Telecine |
16,000 |
| Answer print |
12,000 |
| Total Postproduction Expenses |
167,000 |
| 10% contingency |
87,800 |
| Total Budget |
965,000 |
Financing
There is one great secret to getting film financing: Succeed at small productions and you will get financing for slightly larger productions. However even some of the most well-known independent directors have to devote a lot of their time and efforts to getting financing, on reasonable terms, for future projects.
Everyone in film is always looking for financing and filmmakers typically have several projects on the back burner at any given time in case someone with money comes along who likes the sound of one of them.
Most people know how risky movies are but that fact is partly offset by the sex appeal value of being able to say you are the Executive Producer of a movie. People willing to invest in your dream are out there. The farther you are from Hollywood the easier it is to find them. Become a salesperson, dress up, have a great pitch and be prepared to hear "no" a hundred times.
If you are just getting started then your credit card is your only possible Executive Producer. Learn to use your money very wisely. Plan how you will spend every penny. Get clever as all hell about how to make the money stretch.
When you have successful projects to show people then you have a sales tool. Here are some guidelines for finding money that have worked for someone at some time somewhere.
Finding film money
Exactly how much money do you need? You have to have an answer to that question before you start asking people for money. Do that budget right now.
Don't
Try to avoid getting financially involved with family and close friends. If you must, then make sure everyone understands that making movies is a very risky business. The vast majority of films lose money. Don't let anyone invest in your film if they can't afford to lose the money.
Don't try to sell stock unless you hire a lawyer to set everything up and teach you everything you need to know. You can get in a lot of trouble if you don't do it right.
Don't try spamming, pyramid schemes, chain letters or any other fraudulent Internet tricks. You'll be lucky to stay out of jail.
Don't pay some guy who claims he can find you investors. Agree on a commission to pay after he delivers.
It's almost always a bad idea to use your own money on a feature film but many projects have been done that way. The real issue is that if you can't sell your project well enough to convince investors will you be able to convince talent, crew and ultimately an audience to believe in your film?
Be REALLY careful about using credit cards to finance your movie. You'll max them before you finish unless you are an amazingly good money manager. You'll still need more money to do festivals and handle other marketing expenses. Even if your film is a masterpiece the distributors will smell blood and know you are desperate for any money. You'll still be in debt after you sell the film. Maybe you believe in your film so much you won't care.
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If you've got a great script, the talent and knowledge nothing should stop you from making your film. Money is actually one of the easiest components to find. Much easier than finding the great screenplay.
Think small. Making a truly great short could just get you a festival prize, which could lead to getting noticed, which could get you a million downloads of your film on the Internet, which could get you really noticed, which could make you famous. If you're famous is much, much easier to raise money.
What is an angle you could use to appeal to a special interest group. Churches, ethnic groups, professional organizations can sometimes be convinced to finance a film if the story has something that appeals to a leader in the group.
Go after small amounts of money. If you need $5 million its much better to get 50 people to put up $100,000 than one person to put up the whole amount. A single investor with that much money into the deal is going to watch your every move and hire people to second guess your every move. Creating your dream is hard enough without that kind of pressure.
Get ready for the money.
- Form a production company. Choose a name.
- Open a business checking account.
- Get a business license.
- Open a PayPal account so you can take credit cards.
- Create business cards, letterhead, a press kit and that website.
- You need a phone, fax, e-mail but you don't need to rent an office.
When you get money from investors sign a promissory note. Write in the terms for what interest you will pay and that all payments will be from profits on the film.
It's not hard to set up a simple partnership or just be honest and ask your investors to donate money, time, supplies or equipment. The usual route is to work on deferral. This means they will get paid some amount, either a fixed sum or percentage, IF the movie makes money.
As soon as you get some money hire a lawyer to set up a some legal form for your company. You can do a sole proprietorship which really doesn't need a lawyer, but the most popular form is the Limited Partnership. A full corporation is probably more than you need.
Cash isn't the only thing you're looking for. Services, labor, food and equipment are just as important. On a very low-budget film getting enough of these non-cash items might make your film. You know someone who has some of the equipment you need. Convince them to let you borrow it. Talk to the owner of your favorite restaurant. Ask them if they would like to support the arts.
If you must use your own money, and you really believe in your film, how much can you lower your expenses? Can you take a second job to raise more money? Your vacation time is when you'll be paid to do the production.
If you have any equity in your house you've got a great source of financing. An equity loan could get you $20,000 at a very reasonable interest rate. You can make a feature film for $20,000.
Grants are usually only available for non-commercial and documentary projects.
It is usually a waste of time to try to talk people into investing in your film. Tell them about the project and if they're interested they'll tell you. Doctors and dentists are professionals with good cash flows so everyone goes for them. Find some accountants and financial planners and make friends with them. They're looking for unusual investments for some of their more affluent and daring clients. Wealthy investors might have children with movie ambitions.
Law firms often have an attorney who specializes in limited partnerships. Make a believer of that person and invite them onboard as your Executive Producer. Many lawyers are wealthy or know where to find money. If they find most of the money be prepared to share any income 50-50 with them.
The talent you hire can get you money. Well known directors and actors know people with money. If they believe in your project they'll find the money.
Put on a presentation, rent a movie theater during the day when it's not showing movies. Bring in all your potential angels. Project your trailer, introduce your cast and director. Project enormous enthusiasm and confidence. Don't you have as much right as anyone to succeed?
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