For all its glitz, moviemaking is still a business. A small panel held Monday as part of the Savannah Film Festival tackled perhaps one of the trickiest issues in showbiz: how to recoup production costs for a movie.
Los Angeles-based manager and producer Steven Adams and entertainment lawyer Vinca Jarrett, co-producers of an online series called “Show Me the ******* Money,” headed the discussion on the intricate ways in which films can make money in distribution.
Listing the general areas of recoupment, Jarrett said movies can find revenue through tax credits, soft money or crowdfunding, distribution advances and buyouts, U.S. domestic sales, international sales, ancillary exploitation and library sales.
“Maybe you’re lucky enough to have a movie that gets an underground following, and some art houses call you 20 years from now wondering about rights to your film,” said Jarrett. “These are all recoupable ways of getting money again and again in the life of the film.”
Most importantly, Jarrett said, is to keep an open mind on how to make that money beyond traditional distribution.
She gave an example of a lower-budget film she was counsel to that wasn’t very good, but employed a reputable cinematographer who took stellar panorama shots. She suggested to the producer that he might try selling some of those shots exclusively as computer screensavers.
“He was very insulted,” she said. “But you should always be thinking of ancillary ways to recoup your money.”
Also critical for first-time producers is understanding the “waterfall” of who gets paid first.
“A waterfall is what flows down … it’s the order in which you’re entitled to recoupment in a film,” said Jarrett.
This means that before the producer and co-producers can get their money, the following people must first see their share: the sales agent, the collection account manager, financiers (generally banks), guilds, deferred beneficiaries and talent.
For movies of $2.5 million or more, a bond company can also be secured, which ensures the movie will be made on time and on budget.
As an example of how they work, when actor Heath Ledger died during the filming of “The Imaginarium of Doctor Parnassus,” it was the bond company who sat down with producers to come up with a way to finish the movie, eventually settling on using several different actors for the role.
Nobody thought that would sell, but the bond company was getting the film done,” said Jarrett. “Because if they didn’t, the bond company would’ve had to pay out all the investors 100 percent because it wasn’t on time or on budget.”
She said some of the common mistakes she sees as an entertainment lawyer are filmmakers who don’t copyright their movies and producers who give away too many back-end rights, leaving them penniless.
“Make sure your numbers are working,” said Jarrett. “If you’re not willing to do the math, make someone do it for you.”
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