Wednesday, June 21, 2006

Chronicles 24 - The dosh, the dough, the finance

A trip down to Cannes as an indie-producer usually involves a sojourn over to Jetee Albert Edouard in The Cannes Port where you will see a wonderful array of yachts all bearing colorful banners. This is where the gold is. The dosh, or partial dosh that will help finance your movie. Any meeting with a financier will normally take place on one of these yachts where for a pre-arranged meeting you are asked to remove your shoes and you go on deck, or whatever you do on yachts, go starboard or Shiver me Timbers, Matey!

Anyway, for about 30 minutes you can pretend you're a millionaire and sip Evian while you "talk business" gazing out into the "white wedded" waves of the Mediterranean, (the "white wedded" bit is Joyce by the way ;-)).

Now most of these companies are using some kind of tax-based funding to finance films. To be honest, I don't know how it works, all I know is that it is a way of saving rich footballers and dentists from handing out their hard earned readies to Her Majesty's government. The usual suspects in this area are Scion, Ingenious Media, Future Film, Grosvenor Park etc. Some of them intend to discount the new tax credit and some of them finance using GAAP funds. I know, don't ask, I don't understand it either. I didn't understand sale and leaseback, now that's gone.

All I need to know at the moment is, do the numbers add up? I can still add, with the aid of a calculator, so off I trundle off on my merry way and meet with the usual suspects. Now the amount of your budget that these yacht people will finance varies. Some offer 20%, (Scion), some 30% (Ingenious Media) and so on. Now, methinks, wouldn't it be nice to go from one boat (sorry Yacht!) to the other and pick up 20% here, 30% there and with said calculator in hand arrive on the other side of the Cannes port with the 100% required to finance your movie. If only life were so simple. I don't know all the reasons why you can't do that, one is probably to do with the complexities of the tax laws and the other is that these people are in competition with each other and some used to work for the company "next door" and left to form their own financing company and hire their own yachts.

Fair enough, you think. I get 30% from one yacht, then get the rest (via a bi- or trilateral co-production) from other countries and then I'll fill the gap with a bank loan, (gap finance) and pre-sales. Okay, so you do the figures and they seem to add up but then you hear that the GAAP funds, IF, that is how you are getting say, your 30% from one of the yachts may not be water-tight and may come under scrutiny from the Inland Revenue. Then you hear that the offer of a discount against the tax-credit may come at a price so, for arguments sake, 10% becomes 7%, OR one tax-based fund might not sit so well with the government financing agency of another country.

So, one minute you are on a high thinking, yes, I've done it, the numbers add-up! Then you go to your next meeting and people are folding their arms and mumbling and grumbling and "umm-ing" and "ahh-ing" and prodding their sterling silver fork into your water-tight finance plan and, with some relish, poking holes in it. One person thinks it's feasible and another one doesn't.

At the end of the day all you can do is stay positive and go with the optimistic view because the reality is when you are talking with agents you need to present a credible finance plan and you have no choice to run with the one you have in your hand because the two in the bush ain't going to cut it.

Now the thing is, if you can bag a bankable name then all that could change. You can fill the gaps with equity financiers who are now more willing to invest in your project. Even the bigger agencies may come on board and help finance and package the project - UNTIL then, you run with what you have and stay positive.

By the way, don't think about hitching down to Cannes next year with your grubby, coffee-stained, first draft in hand (based on your sad life ;-)) expecting that any of these people will dish out a cheque for your movie. You need attachments - director, other finance sources, credible co-producers and preferably cast otherwise you won't get a meeting, or, if you do get a meeting and for instance you don't have cast and sales agent it's a "meet and greet" situation and a possible letter of intent if they are seriously interested. Still, even then, unless you have a marquee name director you need "talent" to draw on the finance.

Apro pro "talent". My UK casting director told me to forget about the UK bankable name I was out to. He didn't see much point in persuading the agent since he reckoned the client was interested in different types of projects anyway. He suggested another name and I ran it past the sales agent to see whether he was feasible in terms of pre-sales. Creative choices are one thing but if the numbers don't add up there's no flick with the popcorn.

There endeth the lesson of the day.

Auf Wiedersehen! See Chronicles 23