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How to Determine the Right Budget Level for Your Film

How to Determine the Right Budget Level for Your Film

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On October 24th at The Film Independent Forum held at the DGA in Los Angeles, a panel of financiers and producers assessed the current marketplace and weighed in on what makes a viable film project and for what budget.

Moderated by Paula Manzanedo-Schmit, Senior Vice President, Film Finance, Inc., the panel entitled “Viable Films: Your Budget vs. The Market” featured producer Miranda Bailey (“The Diary of a Teenage Girl”), producer Nina Yang Bongiovi (“Dope, Fruitvale Station”), Mette-Marie Katz, Director of Sales, XYZ Films and Jessica Lacy, Head of International and Independent Film, ICM Partners. The conversation ranged from measuring the temperature of the U.S. and foreign film markets to whether it’s worth hiring a name-actor for your low-budget indie film.

Below are the key takeaways from the panel.

The foreign marketplace is tight for U.S. indies.

When it comes to selling indies abroad, things are rough for U.S. indies at the moment, said Katz. “In the last year or so, we are starting to see a recession in the independent film landscape,” she explained. “It’s getting harder for foreign buyers to exploit independent films because there are so many.”In the U.S. and Canada, digital platforms have largely filled the gap left by the dwindling home entertainment revenue stream. But in a lot of foreign territories, that’s not yet the case. “

That means the distributors when they buy a movie, they put up a MG (minimum guarantee) and they will usually try to recoup that advance by selling it to various different revenue streams — like Blu-Ray or DVD or a SVOD platform — but if those platforms aren’t there, it makes them harder to put up a higher advance,” she explained.

Lacy agreed that “we can’t rely on foreign markets these days, which means our budgets are having to go down if we don’t have a cast of a certain level.”

Domestically, the indie market is stronger.

“The good news is there are so many more opportunities to finance movies domestically,” said Lacy. “There is money out there.”

New digital opportunities present more opportunities for films to get distribution, though not traditional theatrical distribution. “With the emergence of Netflix and Amazon and Hulu and Vimeo, all of these companies now provide an outlet for independent films and they’re paying handsomely for those films,” said Lacy.

You need to have conviction.

After studios turned down “Dope,” Yang Bongiovi said they went ahead and made the film “on an independent budget” which was about a third of what the studios said it would cost. She admitted that “it was difficult and it was Hell, but that’s the conviction that’s necessary for a filmmaker and the team that a filmmaker has. Keep your eyes on the prize. Make a great film, go to a festival and hope for a sale.” 

In the case of “Dope,” the film sparked a bidding war at Sundance 2015, with Open Road Films and Sony Pictures winning in a deal worth $7 million. “Our investors were very happy,” said Yang Bongiovi.

You need three things to get your movie made.

Bailey said that in order to get your movie made, you need three elements: A great script, a well-known director and a well-known cast. “If you have all three of those elements, you’ll probably get your film made. It may take four years, but it will happen. If you have two of those elements, you’ll still probably get your film made. If you have nothing but a really good script and a first-time director and you haven’t got your cast yet, you have to find a way to put in your own money to get it financed. It’s much harder.”

And if you don’t have any elements? “You should open a restaurant,” joked Bailey.

You can get a name cast for your indie.

If you’ve got a great script, Bailey said, “you actually can get cast of extremely high name value in your small low-budget movie where they get paid scale.”

She explained, “the good news is that you can get name talent to work for very little if you have a great project.” She pointed out that they were able to land Kristen Wiig and Alexander Skaarsgard to star in “The Diary of a Teenage Girl” because they loved the project.

Of course, it helped that Marielle Heller, the film’s director, had a connection to Wiig through her husband Jorma Taccone, the actor-director who served as an executive producer on “Diary.”

“Any time you have a connection, always go that way,” emphasized Bailey. “It’s a lot easier to bypass an agent or a manager who wants a bigger payday for their client.”

But it’s not always worth the money to get a “name” cast.

Bailey explained that name actors bring your budget up, but then you can theoretically sell the film for more money.

Katz said “name cast is everything right now.” But she acknowledged that “certain cast works better for certain kinds of genres and they don’t work for other genres.”

Also, some actors don’t travel well internationally. “People who are no-brainers in North America — like a big TV star — in Malaysia, they’re like ‘if it’s not Johnny Depp, who cares?'” said Katz.

Lacy said that “unless it’s one of six actors, to me, it’s not worth it. To me, your movie is worth what your movie is worth.” She explained, “an intimate family drama is only worth so much. For me, it’s the difference between is your movie pre-sellable or isn’t it? [Casting] shouldn’t necessarily impact your budget so significantly. A $3 million shouldn’t become a $5 million movie with X actor, but it may mean it’s pre-sellable. Unless it’s Brad Pitt, I’m probably not advising that you go and spend a boatload to get them.”

Be aware of your budget range.

Lacy explained that there are three budget ranges when it comes to indies — the under $2 million budget range, which can go as low as $100-150,000. Films such as “Tangerine” and “The One I Love” fell into that range.

“That’s where you don’t need to rely on foreign pre-sales, you’re likely relying on grants, equity, soft money like tax incentives,” she explained. And even if you don’t sell the resulting film, you can work with a digital aggregator and still find distribution opportunities.

Then there’s the average indie space, which is $2-10 million. “It’s a difficult space,” conceded Lacy. “You do need to have some foreign value with your movie, not necessarily pre-sell it, but you do need to have a sales company give you estimates so you understand in a best case scenario, I can sell it for $5 million, in a worst case scenario, I can sell it for $3 million.” With a film in that range, “you are going to need a cast for that, recognizable actors in the roles and/or a director who has had success and is known.”

For instance, “Still Alice” starring Julianne Moore, and “Beyond the Lights,” directed by Gina Prince-Bythewood, fell into that range. “The Diary of a Teenage Girl” was on the lower end of the range.

The third range is above $10-12 million. In that case, it’s likely sci-fi or action. “It’s going to have a high concept, a real reason we’re making for over $10 million. It will have to have significant A-list actor and an A-list director,” said Lacy. At that budget level, you should have domestic distribution in place, which, as Lacy acknowledged, “is hard to do unless you have something to show or a finished film.”

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