Gary Baddeley On "What One Learns About Film Financing From Film Financing Conferences"

by Ted Hope
October 4, 2011 12:30 PM
9 Comments
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Sometimes it seems like there's more talk about movies getting made than there is actual activity. The question of how we all learn and remain aware of the actual practice of day will always loom large. Since knowledge and access (i.e. connections) will always be key commodities in the pursuit of getting it done, conferences that provide the two are always a lure.

Fortunately we were given the opportunity to cover 11th Annual New York International Film & TV Summit, organized by BNA / ATLAS, and were able to dispatch one of our own forward thinkers to the proceedings. Gary reports back to us, in this first of two parts.

I did something odd last week: I went back in time and attended the kind of conference I hadn’t been to in years. These days I’m best known for documentary films and books released by my Disinformation and True Mind companies, but when I first met Ted Hope (who kindly invited me to attend the conference in his stead), I used to go to exactly this kind of conference as a young pup entertainment lawyer looking to meet experienced TV and movie execs.

The conference was the 11th Annual New York International Film & TV Summit, organized by BNA / ATLAS, and indeed it was loaded with exactly the kind of indie film royalty a striving young producer might want to meet: New York luminaries such as Richard Lorber, Steve Beer, Josh Braun, Ira Deutchman and many others, as well as some west coast execs like eOne’s John Morayniss, Nick Meyer, and Peter Kaufman. But at a thousand dollars a head to attend, there weren’t too many filmmakers in the room (notable exception, one of Ted’s students at NYU Film School whom Ted got a free pass for and whose short was accepted by Sundance this year). The majority of attendees were lawyers and accountants, which made me laugh when all of the Movie Magic software door prizes were given out to people who clearly weren’t about to produce their own film (I know because mine was one of two hands raised when a panelist asked if anyone had produced a film).

The other “Back to the Future” moment for me was when I asked what the conference hashtag was so that I could tweet about the panels. Not only was I met with a completely blank stare, but it turned out that a hashtag would have done me no good anyway, as there was no wifi and AT&T doesn’t have enough bandwidth in the Marriott Marquis Times Square to access email, let alone tweet. I don’t think that was too much of an issue for anyone else, though: unlike, say, a panel at SXSW where everyone has a laptop/tablet/smartphone out and is littering the social mediasphere at will throughout every presentation, I didn’t see anyone using anything more advanced than a ballpoint pen with which to record the proceedings.

OK, so that set the stage. As to the actual content of the conference, on day one there was a major focus on tax incentives, with Executive Director of the New York State Film & TV office, Pat Kaufman delivering the keynote address. Pat is well loved and for good reason: she reported that already in 2011 there are 82 films, 17 pilots and 23 TV series participating in New York State’s tax credit program with $1.5 Billion in activity, versus $1.4 Billion for all of 2010. (Fun trivia fact about Pat: she is married to Lloyd Kaufman, of Troma Entertainment fame, and has appeared in some of his unique films.)

From Pat’s address we went right into a morning of detailed information on first domestic and then international tax incentive programs. Also present were more than a few state and city film office representatives, including West Virginia, Greater Philadelphia, and Puerto Rico, with a special mention for the extremely charming new Film Commissioner for the Dominican Republic, Ellis Perez.

There were two clear takeaways for anyone sitting through the panels: (1) you’re an idiot if you don’t access tax incentive funding for your movie or TV pilot, to the extent it’s available (not so much for docs); and (2) don’t even think about trying to work your own way through the ever-changing thicket of programs — hire specialists (if you don’t know who, take a look at the speaker list for these panels — they’re all very good at what they do and worth the fees they charge).

The afternoon’s focus was geared towards the financing of films. First thing to note: the presenters were focused on movies that have budgets in the millions of dollars, have established sales agents, etc. Plenty of excellent information was on offer (e.g., Q: Which banks are active in film finance right now? A: Comerica, Chase, City National, Bank of America, Bank Leumi, Barclays, Union Bank), as well as some dry wit (Q: What is the typical role of equity in film finance? A: from Lucie Guernsey of Woodland Bay Capital: “To pull out at the last minute”). The finance panel really got into gear once Roy Salter of the Salter Group financial advisory firm let loose with the gem that if you just want to get something made, go to Europe where there are lots of state funds, ministries and others willing to fund art. If it’s money your after, though, then he and the other panelists have lots of advice.

Salter was actually pretty bullish on films as an investment. He noted that while private equity finance largely went away in the wake of the 2008 financial meltdown, there’s plenty of new investors from Abu Dhabi, India and elsewhere in Asia who are cognizant that movies are not like any other asset category and unlike almost everything else, they have provided net positive returns over the last decade. I don’t think he was talking about the microbudget kind of films that my company and surely those of many of the readers of HopeForFilm make though.

The real shocker for me regarding finance was a trend reported by Tom Leo of Sheppard Mullins: apparently there are numerous scams being attempted with supposed financiers telling producers that they can access a $100 million financial instrument and give the producer $5 million for his or her film ... if only the producer can come up with $2.5 million now. A few years ago I published a book called Scamorama, about those Nigerian 419 email scams; I couldn’t believe that sophisticated movie producers were falling for these, so I turned to the person sitting next to me, David Oliver of City National Bank, who confirmed that indeed his firm had received lots of calls about bogus letters of credit in connection with film finance. Moral of the story: if it seems too good to be true...

Some other sage advice from Day One of the conference:

• Established indie producers can be your beard (veteran LA attorney Peter Kaufman, explaining why it’s often advantageous to bring on board the type of producer who can have a “halo effect” on your efforts to get the film made.

• Be generous with talent perks like business class air travel — a few thousand dollars spent on air fares can yield tens or hundreds of thousands of dollars of publicity value if your star shows up for the film festival premiere or similar junket (Wilder Knight, Esq. of Pryor Cashman).

• The only barrier to entry for filmmakers attempting self distribution is getting exhibitors to return calls (Ira Deutchman, who went on to say that’s why theatrical bookers are still so important and that the self distributed films that do well are the ones with defined niche audiences, those that have a thousand “true fans.”)

• Sales agents are more honest now (Jonathan Sachar of Indiefcc.net, who likened some sales agents in the not so distant past to the real estate agent who’ll tell you he can sell your house for two million dollars just to get the listing, when every other broker says it’s worth a million).

• Saying your movie is on Netflix and iTunes is like saying your name’s in the phone book (Ira Deutchman on why theatrical release is still worth pursuing for its subsequent marketing value, even though it may be a loss leader).

[Plenty more zingers like these in the second part of my blog. Thanks for reading part one!]

-- Gary Baddeley

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9 Comments

  • seth willenson | January 5, 2012 3:32 AMReply

    good report of the conference.

    I still stand by the essential truth of what I said at Sundance Producers Workshop around
    ten years ago.

    If you want to be a producer forget about creative vision and just suck up to money and talent

  • Nayan | October 18, 2011 4:39 AMReply

    So live streaming is out of the question, eh? :)

  • Gary Baddeley | October 6, 2011 12:37 PMReply

    Thanks for the comments, commenters. I agree that much of the information dispensed at these conferences can be gleaned for free by someone who assiduously reads the trades, follows the right people's RSS and twitter feeds and so on, but most of the people who pay to attend the conferences don't have the time or inclination to do that, so they do serve a purpose.

    More to the point though, they are good for networking. If you're dying to meet the speakers announced for a conference such as this one, you'll almost certainly have the chance to talk to them one on one. It's not like a manic film festival with thousands of attendees where the speakers are whisked around in sponsored chauffer-driven cars.

    Anyway, back to writing up part two...

  • Milan | October 4, 2011 12:14 PMReply

    Sounds like there's another scam going on. The $1,000 pricetag.

    Your synopsis was good though, but 99% of that we should already know from the trades, Deadline Hollywood and Ted Hope (they are my trades, I don't pay a subscription. Let me know if I'm missing anything).

    Pat Kaufman is great and I'm in the process of putting together our package to claim our credit. Microbudget (less than $500K) filmmakers have some confidence in yourselves. These tax credits aren't too hard too figure out and the people at the film offices are very helpful. My guess is your cost reporting spreadsheets have no more than a few hundred lines and then you just put them in the proper accounts. Save money where you can.

    Looking forward to the 2nd installment.

    I went to one of these film investment conferences last year and had a similar lack of being impressed. Also presented a project to film angels and was pitched more projects from the supposed "investors" than meeting anyone with an interest in film investment.

    Seller beware.

  • Mark Savage | October 4, 2011 10:16 AMReply

    hanks, Gary, for synopsizing the first day so succinctly.

    If sales agents are more honest now, that's heartening, but "more" is relative, and considering how dishonest most (not all) were before, that still may not be enough for a confident investment model.

    Benefits of a producer "beard" can't be overestimated, and neither can the rewards reaped providing some home comforts for a name/upcoming "star".

    It is sad that the cost of such a conference precludes many indies, who can benefit from the information and contacts made. Still, the shared intelligence is helpful, even if the path to financing of this nature can seem like a closed shop at times.

    Like everything in life, nothing is as simple as it seems, and nothing is quite as complicated when considered at a distance.

    Nice work.

  • Mark Savage | October 4, 2011 10:10 AMReply

    Thanks, Gary, for synopsizing the first day so succinctly.

    If sales agents are more honest now, that's heartening, but "more" is relative, and considering how dishonest most (not all) were before, that still may not be enough for a confident investment model.

    Benefits of a producer "beard" can't be overestimated, and neither can the rewards reaped providing some home comforts for a name/upcoming "star".

    It is sad that the cost of such a conference precludes many indies, who can benefit from the information and contacts made. Still, the shared intelligence is helpful, even if the path to financing of this nature can seem like a closed shop at times.

    Like everything in life, nothing is as simple as it seems, and nothing is quite as complicated when considered at a distance.

    Nice work.

  • K.S. | October 4, 2011 7:59 AMReply

    Ouch!

  • Michael Wiese | October 4, 2011 4:38 AMReply

    Thanks for the report Gary. Well done capturing the essence!

  • TRUTH | October 4, 2011 2:16 AMReply

    Sundance thieves, scammers, corrupt, from all of their programmers, to the board of directors, they steal money by hiring college students to watch the 10,000 film submissions, while the programmers fly around the world picking up films from other festivals, they scam people using Without a Box another corrupt on-line scam, which has over 7000 festivals, some are not even existent or legit, they also ask for fees, all of this film festival noise is nothing but a big scam on vanity driven artists, who make crap films. When a true original no budget, no camera crew, film called Jesus of Malibu was requesting to be considered and simply wanted to understand how a "film trilogy" could be submitted to Sundance, their only answer was " we aren't interested" and the media press, and marketing concepts for the film was stolen and used for Kevin Smiths piece of crap Red State. Sundance uses ideas, steals scripts, spends money on excess parties, the people who attend are pathetic rich snobs who are more interested in catching a glimpse of Paris Hilton than supporting films. John Copper is a fraud, and so are the rest who don't stand up for anything, because they are fear mongering talentless people who fear their meaningless jobs, Sundance does not support Independent Filmmaking, because if they knew what a "true meaningful, and profound film Jesus of Malibu is, which is obvious by the film trailers and support it has received from artist, musicians, designers, Nationally and Internationally; then they would have reached out and someone would have apologized and fired John Cooper who has driven Sundance into the ground, they are corrupt and we will see that everyone will know this, and that the film JESUS OF MALIBU was never submitted, it was never given the chance, not one person called, wrote, e-mailed, to answer a simple question, they want your money and thats all, and THEY DON'T WATCH THE FILMS, PERIOD! Anyone supporting this corrupt Institute that CLOSES THE DOOR, on any real independent film, is also a part of the "problem" and they also are a worthless vanity driven pathetic " I want a trophy" sheeple, Jesus of Malibu is the most powerful film in the world because It doesn't give a crap what anyone thinks, you can all go fuck yourselves, you, the world, the media, the arts, film sites, magazines, film schools, writers, indy directors, are nothing but a bunch of phony nothings, that won't change a thing in the world or humanity, we have a purpose, a message and profound meaning, and you fear us, and are chicken shit nothings who can't confront Jesus of Malibu because 'truth" gets right in your face doesn't it?
    Where is ONE of you? ONE? Hello? Didn't think so, not one of you has any balls, any integrity, any virtue, and character, heres Jesus of Malibu's character, and not a phony ass Tarantino one, "the world is full of lies, and you the people are included, liars, thieves, we are "original" because we say, fuck you, fuck you all".
    Jesus of Malibu stands for Integrity, Ballance, Respect, Virtue, Simplicity, and Justice it's not just a simple trite scripted manufactured "blue print" of everything that has been done before, and it is true honest and real in it's vision" to uncover the LIES and seek justice, not through teachings, religion, but common sense, Let your pigs wallow in the mire, you don't deserve Jesus of Malibu, but you deserve what your getting, EXSPOSED, so fuck you, everyone of you.

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