Financing / Crowdfunding

Ashley Renee Smith I recently came across a couple listing their 74-acre property in Colorado for $300 million. If you—or someone you know—own an asset of that scale, almost any bank will finance your film upto $50 million or more if you pledge the property as collateral.

Without collateral whose value exceeds the loan amount, banks are generally not an option. That leaves equity or non-bank debt as alternatives—essentially, people willing to invest or lend knowing they could lose 100% of their money if the project fails.

The transaction itself isn’t terribly complicated if you have a solid project and the right stars attached. What I’m currently focused on is financing a slate of projects, but that’s probably best discussed after execution.

Thats one I've never considered, Kenneth George! Interesting.

Ashley Renee Smith If you’re looking to raise, say, $50 million to produce a slate of around 10 strategically budgeted films—which is very feasible, by the way—you really have to go big in terms of strategy.

State-level tax incentives and programs like Section 181 can help, but they’re more like supplementary or secondary tools (like coupons) rather than primary solutions.

If you’re actually in the financial trenches and not just talking hypothetically, there could be some very real options available to you—especially with your background. It’s hard to say without knowing exactly how much you’re aiming to raise.

Ashley Renee Smith I haven't seen it, but what is interesting is that it is one of very few films that grossed over $100 million yet is tagged in only one genre: Horror.

https://www.intense.pictures/industry/analyze.php?action=full_sorted_wg&...

Of the four or five films that meet this criterion, they all seem to be either Horror or Comedy.

Maurice have you seen it? What did you think? Any way to get the script?

I haven't seen Conjuring: Last Rites, but I've seen the other movies, Jon Shallit. I just looked for the Conjuring: Last Rites script. I couldn't find it. It's probably not online yet.

The Conjuring is a Horror franchise definitely worth studying, Ashley Renee Smith. For screenwriters, producers, directors, investors, etc. I'm trying to figure out a Supernatural Horror story, and studying the Conjuring franchise might help me finally figure it out.

Yeah, it's likely too soon to get the script as the movie just released theatrically, Jon Shallit. I would check again in a few weeks. It may get shared closer to Halloween when horror scripts tend to make their rounds online.

Willem Elzenga 2 Each of the sources you listed have pros and cons. You probably forgot the mob (as in Ozark). They usually just need somewhere to park a few million in what looks like a legitimate enterprise. Just have a good escape plan to disappear if the film bombs. They'll usually send an enforcer to come looking for not just you but anyone connected to you. They dont quite care about the disclosed risk factors in the prospectus or ppm.

Sandpaper your script into something “four-quadrant” (i.e. bland enough for everyone. Love that comment.

Michael Fitzer, MFA, thank you for this post! There’s a wealth of practical insight here that too often gets overlooked in the rush to get the cameras rolling.

That point about treating a low budget like real money is critical. It’s easy to fall into the mindset that “under $300K” means shortcuts everywhere, but it’s often the opposite, every dollar has to work harder, which means the planning has to be even sharper.

Also love the reminder to pay yourself something as a producer. Creative burnout or financial strain can tank even the most promising project, and carving out a sustainable workflow is part of being a professional.

Thanks for sharing, Randall Scott White!

Amber Greenlee The issue is that you probably don't have access to the industry and market data they have collected over the years to inform their decisions. A few weeks ago, I mentioned a film that featured top stars, a Bond girl, and a Clint Eastwood protege as the director. It had a production budget of $20 million but only generated about $700,000 in revenue that we know of. When you have several such failures in a given year, it highlights the value of established franchises, which can go on to gross nearly a billion dollars.

Kenneth George I don't have all the metrics, no. I don't have all the numbers, no. But I do have case studies. What I do have is an ear for what people are saying and and eye on box office numbers now and the tentpoles aren't delivering what's promised any more. Maybe Hollywood is metric-ed out. Maybe they just need to... make art again?

Remember that? Making art? Telling a story to say something or comment on something or just to entertain people? I think @Minh Koby Nguyen up there has a pretty good instinct about where the new media is going to come from.

When Old Hollywood was spending huge budgets on movies like Cleopatra in 1963 and spending $1M on a movie star's salary for the first time to get Elizabeth Taylor people forget that that film flopped in theaters. That was a $57M domestic box office against a $42M budget, only a $27% profit margin. 5 years later Night of the Living Dead, a B picture from an unknown director done on a shoestring budget, had a far more impressive profit margin. It made $12M+ domestic box office with a production budget of only $114,000 which is a profit margin of 106.03%. I'm getting my #s from here: https://www.the-numbers.com/

Spielberg was still making art into the 1990s. Jurassic Park (the first one) is a piece of art as is Shindler's List and Saving Private Ryan. The first movie has dinosaurs and action and, sure it was made to make money too, but it was also to tell a story about humanity's ego and hubris; as a warning to not let our own awe blind us to our conscience. The other 2 he made because WWII is very important to him personally because of his heritage. He put his heart into those films and you feel it there on screen.

Amber Greenlee: Treating exhibitors' ticket sales as revenue available to recoup investment in production costs fails to account for all the other folks standing at the front of the line to get paid to put the film on a big screen to begin with. The exhibitors take half off the top. Distributors take their fees before then recovering P&A/marketing costs. Sales agents and Producers agents all want to get paid. Set aside the creative accounting and the producers / investors will do good to see at best 30 or 40% of box office.

Absent expensive subscriptions beyond the reach of most independent producers, we have almost no visibility into the economics of streaming.

It was the DoJ's Roosevelt/Truman era anti-trust case (United States v. Paramount Pictures, Inc., 334 U.S. 131) which busted up the vertical integration in the industry, leaving the production studios to then demand the transparency we now enjoy over the economic performance of theatrical exhibition. But action by the Trump DoJ in 2020 reversed those gains (https://www.justice.gov/atr/paramount-decree-review), and the Biden administration failed to live up to its rhetoric. No one has taken on the streaming services which re-integrated vertically, producing content for their own exhibition platforms.

The project I currently have in development (29 days of photography, 170 days of pay for the cast) would cost roughly $600k to pay scale under the IATSE/Teamster/SAG-AFTRA/WGA/DGA MBA low-budget. That is before I start paying for locations, sets, vehicle and production package rental fees.

My conversations with folks in distribution have so far cautioned micro-budgets, and realistic expectations for the revenue potential of streaming licenses. They caution that absent millions to spend on marketing, only four-walling provides any hope of an Academy qualifying theatrical exhibition. And failing to back such a DIY approach with ample marketing expenditures threatens to demonstrate a lack of market fit scaring off subsequent distribution opportunities.

The US lost 5.7k screens since the lockdown. Apparently theatrical exhibition in foreign territories are favoring local content alongside US made tentpole content. And it may be a couple of years before streaming begins to effectively penetrate foreign markets. Apparently 95% of streaming revenues are still in North America.

Set aside the cost of attaching marketable names and faces to a cast. The question remains, how do we reliably recoup our investors money?

Its not an encouraging picture right now.

Amber Greenlee When you say things like, “What I do have is an ear for what people are saying…,” it’s a bit like going to court and repeating what you heard from someone (hearsay) to a judge or jury. Hearsay isn’t considered reliable evidence — and in business, it’s no different.

When companies are putting billions of investor dollars on the line, with investors expecting returns, decisions aren’t based on anecdotes. They’re driven by hard data, market research, and insights from experts — PhDs in marketing, consumer psychology, behavioral economics, data science, etc. — people who dedicate decades to studying consumer behavior and the factors that shape decision-making both at a micro and macro level.

Sure, you’ll occasionally see an outlier — maybe once a year, or even once every few years — where a film made on a shoestring budget (usually in horror) breaks out with unexpected revenue. But those are deviations, not the norm. It doesn’t mean the entire industry should run on microbudgets.

Think of it like sports: teams with the largest budgets who sign the biggest stars usually dominate and almost always contend for championships. Struggling teams rarely win consistently. Yes, every once in a decade you’ll get a Cinderella story — a low-budget team that makes an improbable run. But those stories stand out precisely because they are exceptions.

As the song goes: that’s just the way it is.

I do appreciate everyone's thoughtful responses. There's so much to consider when it comes to making a movie-

I think about all of my friends in the industry that had been affected by waves of layoffs going through the industry and what it did to them financially, career-wise, emotionally. Some studios with tall pole movies that just cut all the people who had just put it together for this neat accounting trick doctors hate!

The more people involved, the more money, the higher the tentpole. When it falls, it falls hard. When you see a professional physical tent put up, there are guide wires there to help support the center pole, anchors in place to try and help it from falling. I see this as the marketing, the press tours, the interviews, trailers, the toy deals, etc. Everything to support the big pole. These are the known names, the known IPs, and the "sure bets." But the guide wires need support too. They can't hold up the one pole alone.

Big tents have more than one pole. They have lots of little, smaller, shorter poles around the sides to help hold up the tent. Each with it's little support wire, all working together to hold up the whole structure. If one is too weak, the others have the strength to compensate so the tent doesn't fold on itself.

I suppose my argument is not that the tentpoles CAN'T be there, just that we might need to lower the tallest and raise some of the lower poles near those guidewires. Or make a graduated level tent that has place enough for the acrobats at the top and floorspace for the clowns at the bottom.

When you're fortunate, you should build a longer table, not a taller fence. It feels like there's a pedestal up there on top of those tentpoles. With the ladder pulled up.

Fantastic and valuable, as always, David Zannoni

David Zannoni This was a great recording. Mr. Ramer appears to be very well-informed. He’s also correct—I've been involved in several transactions, and finding skilled finance attorneys with extensive securities expertise can be both rare and, when available, quite expensive.

Thank you David

I'll check it out.

Hi David, working on anything now?

Hi, Ilanna Mandel. I just remembered Stage 32 has a blog about film grants. "Unlocking the Secrets of Film Grants: The Ultimate Guide Every Filmmaker Needs!" www.stage32.com/blog/unlocking-the-secrets-of-film-grants-the-ultimate-g...

Yes, I've seen that. But doesn't answer my question, LOL.

Ilanna Mandel There are several funds out there. Simply apply and there are some funds specifically for women in film.

If you know specific ones I would be pleased to know. But I am looking. The Ontario Arts Council has a special fund for artists with disabilities. So I will try that too.

Jack Binder Interesting.

Awesome of you to post this opportunity Jack Binder

Jack Binder Way to go Jeff.. if Amazon were to offer creators a slice of backend profits...might be a deal maker.

Absolutely wonderful news for the theatrical industry! This year is rebounding to be a banner box office success. Cinema is indeed gaining traction as both Paramount, Apple, and Amazon focus on the theater experience. IMAX likewise has had an outstanding year to date. Good news for filmmakers!

Ashley Renee Smith AMC is clearly struggling. In each of the last 3 years they've had total revenue between $3-$4 billion but in each of those fiscal periods they've also managed a net loss of $356 - $396 million each year. Throw in operating expense alone at 64%, its razor thin margins with no room for error.

Ryan OL He'd say: "Pay attention son ...I say..." his name was Foghorn Leghorn!

... Thank you new lounge moderator!!

Ryan OL, I remember Foghorn Leghorn if that is the character you mean. I chose the name Barnella because I named one of the chickens on the farm Barnella.

Rutger Oosterhoff 2, I am definitely no lounge moderator, but Maurice Vaughan is a very good one.

Thanks, Wyman Brent. I appreciate it.