This is the biggest “chicken or the egg” issue indie producers face. Investors requiring talent attached. However, in order to get talent attached, you need $ for a pay for play offer. But you can’t get that $ from the investor until you have them attached. And so on.
So what do you do?
For this example a $3 million budget & a talent fee of $300k is used with A, B, or C List talent.
I recently posted about pay for play offers (see Tip for the Day #50). When a talent accepts an offer, they are normally removed from the Agent’s roster for the duration of the negotiated time that the pay for play covers (no, it’s not unending time). This is the main reason agents don’t let their clients “attach” themselves to projects without a pay for play offer.
LOI’s don’t count as “attachments”. The talent being your buddy or someone you worked with that likes the project & says “I’ll do it, just check with my agent first” also doesn’t work as that agent will require the pay for play offer.
With a pay for play, if the offer is accepted, a minimum of 10% is required normally within 48 hours. Whether you get funding or not, you’re required to pay the remaining 90% or you’ll get sued. The payment of the remainder is negotiated. So basically, you need the full $300k as the agent will check proof of funds prior to entertaining the offer.
To many of you, $300k might as well be a gazillion dollars. However, there is a potential solution that is becoming more popular with some producers.
Many producers are approaching investors initially with just the amount needed to extend an offer to a particular talent that the investor likes. Using the above example, only $300k is requested, not the full $3 million. The concept is that the investor puts $300k in their own escrow account, which the producers don’t have access to, & it sits there. If the offer is refused, the investor’s $ is not touched. If the talent accepts, $ is available.
But that’s only a small portion of the budget, you still need the remainder. In most cases that the investor funds a pay for play offer, if accepted, the investor sees the value of the talent & will fund the remainder of the project.
While it’s still hard to raise the initial $300k, many producers are finding more & more investors are attracted to this concept. None of their money goes to the budget unless bankable talent is attached.
This also allows presales to kick in (bankable talent attached is required for presales, not LOI’s) in which you can raise the remainder of the budget, thus, only having to pay back the initial investor the $300k plus any negotiated terms. This gets you into profit participation much faster.
I post this as an option to consider. There’s many details but this is the main concept. In all cases, research is required.
Good Luck
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Thanks for the info.
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Thanks for sharing this information, Patrick McIntire. Stage 32 Certification has a certification course in talent attachment agreements taught by one of the top lawyers in Beverly Hills. If you'd like information on that course or any other Stage 32 Certification courses don't hesitate to email me directly at certification@stage32.com. Look forwward to hearing from you.
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Patrick McIntire, I appreciate the way you’ve outlined a realistic approach that some investors might actually feel comfortable with.
It really highlights how important it is for producers to not only understand the creative side of development, but also the financial strategy and risk management that goes into packaging a project. So much of producing comes down to building trust: with talent, investors, and sales agents. Having a smart plan like this shows you’re thinking ahead and protecting everyone involved.
For anyone here looking to learn more about navigating financing strategies, talent attachments, or investor relationships, I highly recommend exploring Stage 32’s education:
https://www.stage32.com/education/collections/filmmaking
There are some fantastic webinars and classes that dig into these exact challenges.
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Great information to have. Thanks Patrick McIntire
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UNIVERSAL has always been one of my all-time favorite major Hollywood studios. Probably has something to do with certain Monsters, a huge shark named Bruce and E.T.
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Totally agree, Patrick. Hopefully producers are checking in with sales agents to get projections for key international territories before making offers...just to make sure the talent holds value for pre-sales.
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Solid advice and direction. To be fair, LOIs are great in some instances, especially if you're generating buzz, knocking on doors (figuratively) to sell shares, and of course, disclosing that the LOI is subject to availability. In fact, I've had luck funding based on the strength of LOIs, but the world was much different then. Right now, serious backers are firm on needing some level of certainty. What you're outlining is exactly how we're approaching the offers on one of our current projects. Even on lower-budget projects, we have to change with the times.
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Excellent advice, Patrick McIntire. I learned many things I did not know.
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The only concern I would raise with this financing model is that it's the way 90% of filmmakers try to get projects off the ground. Which means you are running with a large herd and it's potentially harder for you to stand out. I recommend drafting your own budget assuming you finance 100% of the movie yourself, with your own money, and try to shoot in a state that offers tax credits. You can still get name talent, there are many good actors seeking work right now. You need a contained story with small cast and clear drama to it. But this approach puts you the filmmaker in the driver's seat.
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I went to see Norman Mailer's TOUGH MEN DON'T DANCE in the Cannes Film Festival. Afterwards I told him that I liked the movie he had written and directed. He lost a lot of money on that film. So, if someone like Norman Mailer can lose money on a feature film, it's not easy to get films financed by Independents. https://www.imdb.com/title/tt0094169 -- Anyways, I got to meet Norman Mailer :-)
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Great information!. Thanks Patrick McIntire