Image courtesy of geralt.
I attended an evening workshop on film financing last week. It was given by Roy Martin, founder of The Film Portal. This website helps those attending Cannes to network.
He's had a varied career including stints in finance. His talk gave a good overview of how major films are financed with a few personal insights thrown in. Here are some highlights:
- The Domestic market means those films that are viewed in North America. This is 30% of the global market.
- Development costs are £100-150k before a film would be given the green light.
- A film will often not make a book profit
- Where does the hard money come from:
Studio, distributors, banks, investors
Pre-sales. Need stars.
Gap financing. Usually 10-20%.
- Where does the soft money come from:
Service deals e.g. VFX
- The costings look like this
Tax breaks 20-40%
Gap financing 10-20%
In-kind referrals 5-10%
- There is a waterfall of money post launch. It goes out in a particular order: last in, first out.
- Print and advertisting is typically £35M
- As well as a theatrical release, some money is made from educational, prison etc.
- After costs, money is usually split between investors and producers 50:50
- Other sources of income: Netflix, crowdfunding, ICO (initial coin offering), investor of the year (a particulary place or group will dive into films as an investment)
There was a bit of networking afterwards.