Welcome to Going Bionic #179. Today we’re answering five questions that have found their way to my inbox lately. Motion picture financing, loan structures, film festival strategies, IMDB listings and deferred post-production deals are all on the menu, so I hope you’re hungry. While these topics are quite varied, our mission here is the same, to provide you with key insights to either enhance your career, your film, or both.
Before we begin today, I’d like to say “Happy Birthday” to my dad, who turns 75 today. I love you dad, and thank you for everything you’ve done for me, and I beg you to stay healthy for at least 20 more years, in order to give me enough time to create at least one massive motion picture hit that you can brag to your friends about! Okay, then, without further ado, here are the answers to a handful of your recent questions.
What kind of return on investment should I offer potential investors who invest in my film?
The standard split between filmmakers and investors is 120/50/50. What this means is investors will earn 120% of their investment first, and then they’ll split the remaining profits 50/50 with the filmmakers.
Example: Investors who fund a $1 million dollar film, will recoup the first $1.2 million, before remaining earnings are split 50/50 with the film’s “producers unit.”
Side Note 1: The 120/50/50 investment is not calculated on a film’s gross sales, but rather the amount returned back to the “Producers Unit”. Thus, distribution fees, exhibition costs, P&A Costs, Deferred Payments, Gross and Adjusted Gross Payments, and other off-the-top expenses, are usually paid out before investors will recoup through payments to the “Producers Unit.”
Side Note 2: The “Producer’s Unit,” is generally referred to the producers of the film, as well as other above-the-line participants (i.e. director, writers, actors), who are entitled to a cut of the producer’s profit pool.
I’ve been offered a loan to make my film. Are there any loan conditions I should look for, or look out for?
First and foremost, taking out a loan to fund your film is a really bad idea. The only exception would be if your film has already sold to major distributor, or has been pre-sold to multiple territories. Even then, taking a loan is risky because you’ll be paying it until you get paid on your sales, which could take years. However, if you’re intent on taking a loan to make your film, make sure that a) the interest rate is competitive with reputable banks, b) you have at least four to five years to pay back, and c) all additional penalties, fees and related charges are clearly described up front, before you sign.
A Regional film festival has invited my film to premiere. Should I say “yes,” or should I hold out for a bigger festival?
Great question. The answer here lies in how your project is valued by distributors, buyers and ultimately, the masses. In explanation, if your film is being courted by one of the top film festivals on the planet, then hold out until you find out if they’re taking your gem or not. However, if one of the top five or six festivals don’t come knocking on your door, then it may make sense to premiere at a small festival that’s excited to screen your film. Remember, these days, film festivals are social media launch pads as much as they are sales markets.
I’m about to list my film on IMDB. Do you have any advice on what to say, or what not to say on my film’s IMDB listing?
Yes, I do. If your film was a micro-budget, do not make any mention of how cost-effective your film was to make. Trust me on this one. Doing so will only lower the value of your film.
A post-production house is offering to have all of my film’s post work done on a deferred pay situation. Are there any hidden costs or dangerous situations I should know about?
As a general rule of thumb, if something seems to be too good to be true, then it probably is. In the event a post-production house is offering to defer 100% of your post work, find out exactly what they are covering. More importantly, find out what costs, if any, they are not including in a deferred situation.
You may also want to find out the time frame in which the post-production house can complete their work for you. This is an important step to take, because the post house may have a projected completion date that’s far after the date you may need the work to be completed. Remember though, if you’re asking to have your post work done on a deferred payment basis, then that post-production house is going to give priority to their paying clients, before they work on your film.
That concludes this 179th edition. As always, I thank you for lending me your eyes, and I look forward to borrowing them again next Tuesday. Until then, I wish you a productive week. I can be followed on Twitter @Lonelyseal.