Welcome to our community

Be a part of something great, join today!

Log in
  • Hey all, just changed over the backend after 15 years I figured time to give it a bit of an update, its probably gonna be a bit weird for most of you and i am sure there is a few bugs to work out but it should kinda work the same as before... hopefully :)

Small Indie: Who controls the money?

Wow, very interesting Curran, I like that idea.

For our production company, I'm pretty sure we'll make it a subchapter S corporation, not an LLC, but for any features we do I think they will be separate LLCs, for the primary reason that if I write and direct something it's my project, it won't be split the same way that profits from the production company are divided. If David writes and directs something and wants me on board to help revise the script, be a first A.D., etc., he can give me a percent that is more reflective of my effort rather than give me 50% under the arrangement of our larger production company. That's all in the future, though, I don't think we'll file corporation-forming papers for another two months, we'll see.

When we're ready, we'll move on everything fast. The Website will be up this week, anyway, and once we have our first few paid projects, hopefully by the end of August or start of September, it'll be time to file the papers, get an office in Hollywood, all of that good stuff.
 
I say, as artists, you gotta be bold and ask for whatever you think you need and want. And if you need to control the money, then it's worth going for that. But without a certain degree of tact and strategy, your project could "blow up" before you get your first dime. Because usually the guy who writes the cheque, controls it.

But I wonder whether being this concerned about a blow up suggests it's not the right marriage to begin with. The threat is ALWAYS there, even for very big name directors. A studio can pull the plug and replace them so long as the studio is footing the bill. But experienced producers and filmmakers know that there's more to be gained by working out a difference than replacing a director or having the project fall apart. So, if you can get away with it, try and control the money. But you might find it's more appropriate to have final approval of certain creative concerns, and that can be cemented in writing, so that if there's a dispute, you have the final say over casting or whatever. The money (or some representative thereof) will usually want to be consulted on such matters, but it's not unheard of for a director to have final say in certain things like script or casting or final cut. Do you really care who controls the money as long as you have control over the key creative concerns? An agreement would have to be in place to ensure no one could arbitrarily withdraw the money once production has commenced. Otherwise, you just want to make your movie your way, right?

Finally, unless you're an experienced line producer too, wouldn't you want someone who had a track record of managing expenses and sticking to a pre-approved budget? The investors might feel there was tremendous peace of mind in that too. So if the budget, and all the line item expenditures in that budget, are pre-approved by you and the investors, and an experienced professional guy is going to administer the paying of those line items, then at least you know what you're getting into before production begins.
 
I have always taken at the very least an exec producer credit...what I've learned is to hand off the producing responsibilities as it allows me to be more focused on what I do best -which is to tell the story.

That said, when it comes to budget -considering I have produced in the past, I know what things cost, and I take other people's money seriously...what this means is that I find I am more diligent with my planning because I want the project and all it's partners to have every chance for success, and that if things go sideways, it's my fault because I didn't plan well enough.

What is the level of friendship here? Are you prepared to sacrifice that friendship if it comes down to it? Unless it's an Entourage story line in Columbia, I would expect that if the PM (or UPM in the US) accepts and endorses the budget, it's their job to keep things on track in conjunction with the 1st AD, and a diligent accountant also helps generating the DPR's. As director you come in knowing your budget limitations and how many hours you're allowed to shoot each day. So if you aren't prepared then really it really becomes your problem.

Creative control is more important to me. Fundamentally the investors are supposed to be buying into me/you as the filmmaker. If they didn't have to confidence, then they shouldn't invest, so there's a tacit trust. You need to know what you want given the budget limitations -how much coverage is acceptable, how many setups, whatever...a DP who can move quickly and efficiently is key. I always ensure the gaffer has as much support as possible because moving lights ALWAYS sucks time, and laying dolly track, so more man power in these depts is worth the expenditure.

Also, based on private offerings, I have seen and used the proviso that overtly states the riskiness of this business and that the investors should be aware they can lose their entire investment. It's a little different here in Canada of course as far as corporate law, but much is the same in the end -it's mainly the ability or percentage of the tax write off an individual is entitled to in our respective nations.
 
It's not unusual in the indie world for a first-time producer to look for the money -- otherwise, what's their motivation? Finding money is perhaps the hardest thing about movie production; without money, you rarely can make the movie.

Unless you are using your own money, to some degree, you have to play ball with other people to get the money. It all depends on how much you want to make the movie -- there are rarely perfect situations where you are given a lot of money and complete freedom to spend it as you wish. With some funding situations, you may have to walk away because you don't get enough control to make the movie properly, but if you take a stance of absolute control or nothing, odds are higher that you'll get nothing, especially if you have no track record.

The questions always come down to whose money is it and who owns the creative idea, the property. If the producer is providing neither, just facilitates getting the money, that's certainly one aspect of producing (no money, no movie) but they are not in a position to take over since they don't own the property. They could screw-up the money situation, but that's the risk you took when you found someone else to get the money for you.

If I were a producer finding hundreds of thousands of dollars for you, I'd be looking for ways of protecting my credit on the film and making sure my areas of control are contractually expressed. Otherwise, I'd have no motivation of doing all that work. Quid pro quo. You have to put yourself in the minds of these producers and investors -- they aren't altruists.

Get a lawyer and come up with a contract that you all can live with.

Check out the main credits of "Twin Falls Idaho" if you want to see how complicated it gets trying to fund an indie movie. You have something like six producers and four production companies mentioned.
 
That's true, and good advice. That's one reason I want to start with something small that I can afford, where I have use of a great location for free, my own equipment, etc. That way let's say I am able to make it for $50,000 as planned, if I make $500,000 off distribution even, maybe it's not huge money, but it would not only give me some extra capital to invest if I wanted in my next film, but it'd give me the start of a good track record to show I can make a profitable movie. That way if I asked for money in the future, and I have a few good ideas who I'd ask (lol), I would have shown at least I have a concept of how to make the money back and make a profit. But I want full control on the first film, and the best way to do that is to fund it myself. Otherwise, all bets are off.
 
Yeah, the guy is a friend of a friend. He's a very successful young financial adviser, but he's already bored with that and is interested in film and wants to use this a chance to do something. He has no experience in film at all, but he does have access to money people and he's very smart. He's putting together our business plan, and it's just superb work. The guy really has his act together, and I think the whole thing is going to be awesome, but then again, I have seen so much turmoil and drama go down on indie sets that I want to be cautious and cover my ass. God knows what might happen out on location.

So it's kind of a tough situation for me, because I want to keep him happy and involve him, but I'd rather not make this picture than have anyone hold ultimate control over the project but me. We're only talking 200K here, so worst case scenario I could just finance it myself.

My other quandary is that with no experience, even if I make him a producer, I'm going to need a strong line producer and AD.

My biggest challenge is to keep from trying to do everything myself. I have a lot energy, but if I am concerned with securing locations and making sure the check clears at Fischer and pulling my hair out because the makeup girl's car broke down, etc, I won't be able to direct.
 
As you say, hire a good line producer and good AD and a lot of your distractions will diminish, though not go away unfortunately. On my first feature, I asked my director why he looked so tired and he said that the actors were calling him at 3AM in the morning to discuss their personal problems, or complain that they were out of contact lens cleaning solution.

I think that was the moment when I started realizing that sticking to DP'ing was a good thing -- I get most of the fun of moviemaking and few of the politics, and I don't have to deal with money.
 
Haha, yeah. My DP on my last shoot had a blast. He was smooth sailing, and enjoying all the great aspects of shooting, while I was busy doing really important stuff, like trying to keep the leading lady and makeup girl from gouging each others eyes out.. heh.
 
Hi Tom,
If you want to be able to fire people, you need to be a producer. Anyway, if it's your film, your idea, story etc, why wouldn't you be producing it as well?

A director doesn't fire a producer. A producer hires a director. You need to produce *and* direct this film.

You also need to specify in your contracts, that you have final creative control of all aspects of the film. SO, if you want the main character's house to be green, but your "producer" friend wants it to be blue, you can say, no, it's going to be green, and he can't then shut off the money until you decide it would, in fact, be better blue. If you want 50k for a new car, then your producer can shut you down. As so he should.

Just make it clear and be upfront; you control all aspects of the creative, he controls the investor's money.
I have to say from personal experience; partnerships get ugly. The money people won't trust you, they'll scrutinize every last spend, look over your shoulder the whole time, and generally stress you out. And then it gets worse.

If you can at all avoid it, don't take other people's money to make a project you feel strongly about. If you're like, "Yeah ok, this would be a fun film to make, whatever..." Then it might not be a big deal. But if you're heavily invested in the film, I mean if it's your baby and you don't want someone messing with your baby, don't take on a partner.

So, how about this; save this film of yours. Make another film with the investor's money. Make it good, make it solid by all means, but don't heavily invest yourself in it personally. I know that's easier said than said than done, because why work so hard on anything if you aren't 100% behind it? I don't know. If it's a case of getting the first project under your belt, you *are* going to have to suck it up, and have people watching you and telling you what to do. You might still even make the film you always wanted to at the end of it, but it'll be so much harder with other people's money.

Sorry for such a long post. Last thing;
First project I produced we managed to raise all the money ourselves. Half a million for a one hour drama-doc. I was in complete control, had no one to answer to, no second guessing. Was the best experience I've ever had making a film.
Project number 2 comes around, 2 million, 4 hour doc series. We had to partner with "the money people" to complete financing. Absolute nightmare, despite our contracts. Managed to finish the project the way I wanted, and was a success in the end, but the process almost killed me, and made me realize I'd never partner with the money people again.

You're probably more confused than ever now. Hope some of that makes sense.
Jm
 
Thanks, JM. The more advice the better.
 
Hey Tom, I know where you're coming from. In this situation, it's hard to have your cake and eat it, too. You want absolute power and you want other people's money (and associated risk) to bestow that power. What a great deal for you! Hopefully you can contractually arrange an approximation of that so that in the end you get to make the movie your way.

I may soon be in a similar boat. I'm all set to self-finance a feature in early 2008, but may not have adequate funds for sound design and VFX in post. So I may need to get investors to buy into my LLC (set up for this one project). But they will be silent partners and I will be the president/managing partner. My own production company will be lending me out as writer/director/producer and I plan to hire a co-producer, LP and AD to do much of the heavy lifting during production. Of course, if I grossly mismanage the production, there could be consequences. There is often both an implied and explicit fiduciary duty that comes into play, as it should be.

As others have suggested, having a good lawyer who specializes in this kind of thing will be the wisest investment you can make.
 
Thanks for the advice, guys. Keep it coming.

I will probably put like 50k of my own money into it, as well. Perhaps that will give the investors a little more confidence. *shrugs*
 
Tom said:
Thanks for the advice, guys. Keep it coming.

I will probably put like 50k of my own money into it, as well. Perhaps that will give the investors a little more confidence. *shrugs*
Click to expand...


If you are also investing your time (unpaid) and equipment, I'd be sure to take that into account in determining your own vested interest in this enterprise. Cash is not the only way to invest. You may find that your share is equal to or greater than the other partners.
 
Agree with thinkbug, BUT make those terms clear in advance.

These are conflict handling tools. When you are in a conflict and have not made those terms clear, you most probably will not be able to play those cards, whatever you've invested (time/equipment/cash)

A good approach (to get other peoples money) might be that you make clear what your price pr hour/day/week/whatever is and your rental price, and offer that you value those investments @ say 75%-33% against hard cash.

That way you can get controll from your time/equipment investments, goodwill because this is after all your project and your invested $$ (as in hard cash) will have the same value as theirs. Fair deal.

It's crucial to establish a mutual dependancy. If it's not there when you go in, it sure as hell won't be there in a conflict situation.

What you do not want, is to end up in a situation where you and your partners count "favours, loyality and thankfullness for what has been done". Those are important values, but immesurable in a conflict. Get it down as numbers before you start.

And contact that lawyer... in advance ... -;)

Just my 2c

Gunleik
 
It does seem for sure that I should contact that entertainment lawyer before we set the terms of our LLC and investment agreement. He comes highly recommended to me through my book and screenplay agent, a guy I have been with for over ten years, and would trust with my life. How much should I plan on spending to have the entertainment lawyer help me out in determining the best strategy for me?

Will a grand do it? $1500? Or will it cost me more?
 
Tom said:
Will a grand do it? $1500? Or will it cost me more?
Click to expand...

Ha Ha Ha, much more my friend - much more!
I talked to my lawyer for one hour and he wrote
a one lousy paragraph letter and charged me $500.
Most E lawyers work on retainer and you cannot
get in the door for less than 5 large.
On a 200K budget you are talking $10,000??
Plus you will need an E lawyer when you start
working out distribution deals.
 
haha, well the fees for the entertainment lawyer are going to come out of my own bank account, before I agree on what the contracts and agreements and the LLC should look like, so if I can get some good advice for around $1,000 or $1,500, that would be ideal!
 
If Im the producer raising the budget then i want to control it...
 
OwenR said:
If Im the producer raising the budget then i want to control it...
Click to expand...

trumpdj3.gif


:)
 
You must log in or register to reply here.
Back
Top