I have recently produced my first feature film called The eVil in Us which is being distributed right now in over 30 countries so somewhat of a success...just waiting to get some money:). It is a horror film with no named cast or director. How are you guys setting your budgets? I did this one for really low, and am contemplating moving up to $1,000,000 to pay people proper wages and to hire 1 or 2 talent for 50k each. Does anyone have real world numbers to share on budget vs return? I am in Canada so I do have the luxury of tax credits which help not having to make up the entire budget but I would still like to set a budget that makes sense for returns for equity investors. Would love to discuss with other Producers.
Producing : Setting the Budget by Dalj Brar
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I'm interested in how you financed, aren't we all :) Did you have Exec Producers, or?
I financed with a combination of equity and tax credits. Equity was almost 70% and then 30% tax credits. I now realize I need to reverse those numbers and use minimum equity because it is at risk and combine tax credits with other soft money (government grants, presales,etc.) to make up the other 70%. Equity was provided by EP's, yes.
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Dalj, the trailer looks great. Congratulations. That's the sort of film there's always a global market for and I can see why it's getting snapped up.
The 1-3 million range is pretty deadly for indie filmmaking as far as making your investment back. Even studios and bigger indie companies package that zone as parts of bigger slates to absorb the hit when most of them go under, hoping one or two will make enough to carry the rest. And that's with their own sales teams and pipelines in place.
A friend of mine just did a 1.2 million dollar film in California for a Chinese company. It has three mid-level names and has been doing okay on the festival circuit but he knows it's not going to sell for more than a few hundred thousand at this point. It didn't break out or generate enough buzz.
That's not to say it's impossible, but the odds are very slim. There's just so much product out there and anything that's not a Blockbuster or big IP or flavor of the moment is just part of the avalanche.
Personally, I'd use a million dollar investment to set up an LLC and do a slate of small films in the $100k to $200k range, with a reserve set aside for sales and staff. You'll be able to utilize your tax credits spread out over the life of the slate and your investors should be able to take advantage of their losses for tax purposes spread over a couple of quarters. When you do begin showing profits, you'll be able to do it spread over the sales life of the slate, paying out or investing in future projects or salaries so you never have to take a full tax hit all at once.
Good luck. I'm envious of you Canadians. It really is a great investment frontier up there.
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Thanks for your comments and advice Vitaly! I have a great SA out in Canada who I will be discussing my options with for the next 2 films, a horror and a drama. I hope they can maybe get some presales based on the idea and the fact that my previous film has worldwide distribution. Of course I will try to pitch named talent and directors that might want to lower their rates and work on a low budget indie to make the presales go smoother but I am not holding my breath on that. I can see how attaching named talent would bump up the budget past a million with all the union requirements. My dilema is I want to make films, not chase money which delays my projects by years and years:). Thanks for your comments Liam and your recommendation for the article, Dealmaking Done Right, I will definitely take a look. I mainly concentrate on Canadian talent just so I can maximize the tax credits but if I do venture into the Million Plus club, I will be looking at SAG actors as well. It's a bit of a leap at this point to go Union because of all the red tape and extra costs involved. I went non-union on my first feature for that very reason. I like the idea of raising a million and maybe making 2 or 3 films like David mentioned in his comments. Make them for less so I don't have to make as much back but making sure they look like they were made for 3 or 4 times the actual budget. I have learned a lot over the years but still so much to learn and absorb. I attend AFM every year and get the same education about finance packages being minimal equity (20%, maybe 25%), pre-sales (50,60% international, 15% domestic) based on named talent, named director, tax credits and any other government grants that can be obtained by shooting in certain areas. However, these panels at AFM are always geared towards 5, 6 or greater million dollar films which I am just not in that realm. I am a big believer in story and telling that story in the most creative and professional way possible given the budget constraints that I will be dealing with. I really like what Netflix and Amazon are doing with developing their own properties but getting into that inner circle seems a lot harder than people make it out to be. Anyways, I will keep plugging away at my stories and get them to the point they are ready to be financed, keeping in mind it may be only 100k:). Thanks again everyone for your feedback, much appreciated!