By Indiewire | Indiewire February 5, 2004 at 2:0AM
Pondering Financing, New Partnerships, and "Dogumentaries" in Berlin
by Eugene Hernandez
The 54th Berlinale, the Berlin International Film Festival, opens tonight (Thursday) here in Germany with the European launch of Anthony Minghella's "Cold Mountain." On the eve of this year's festival, director Minghella and about 75 film professionals gathered at the new Ritz Carlton at Potsdamer Platz for the second Screen International European Film Summit, which was this year dubbed, "Modernising European Cinema." Minghella joined Screen's Mike Goodridge on stage for a morning interview, while the rest of the day was spent looking at production, financing, and distribution issues facing the European film community.
UNITING SALES WITH PRODUCTION
Sales agents, the folks who drive the annual European Film Market that runs concurrent with the Berlinale here in Potsdamer Platz, took a minor beating during a morning session, entitled "Collective Power: Buying and Selling Alliances," that looked at ways that producers are partnering with filmmakers and others to handle film sales in different ways. Among those who gathered to explore the topic were Chris Mercier of Indie Circle, Donald Ranvaud from Buena Onda, Margaret Nicoll of Entera Entertainment, and Ivan Hronec from SPI International.
Ranvaud of Buena Onda Films, the founder and editor of FRAMEWORK Magazine in the '70s and '80s, recently worked to unite "City of God" director Fernando Meirelles and Walter Salles ("Central Station," "Motorcycle Diaries") in a unique and still emerging effort. The filmmakers are launching what is described as a sales agent/production company that Ranvaud calls "a new model for sales." He added Wednesday that Mike Leigh and producing partner Simon Channing Williams have also signed on for an initiative that has already produced four films, with five more to come.
Ranvaud explained that he will fully announce the initiative's additional plans in Cannes this year, but indicated that the goal is to "have the directors more integrated in the sales process to reduce the cost in the structuring of the sales company." He also added that the group is structuring a P&A fund for distribution of the films in the United States. He hopes to have it established in advance of Cannes this year. "We want to put transparency, accountability, and creativity back at the center of the business."
THE VIKINGS ARE COMING
Earlier, in the "Picking Up the Pieces: Production after the Meltdown" session, Screen's Colin Brown led a discussion with Peter Aalbaek Jensen, Lars von Trier's partner at Zentropa, and Kim Magnusson of Nordisk Film. The two producers are creating films on opposite ends of the spectrum in Europe, with Jensen making the lower budget Dogme films and other movies on DV at Zentropa and Magnusson working on larger-budget productions.
"You can make fantastic things for no money," smiled Jensen, who now runs the largest production company in Scandinavia. His latest low-cost, DV initiative is intended to inspire new ways of making documentaries. The new effort is dubbed "Dogumentary." After the session, Jensen told indieWIRE that he plans to make six to ten docs this year in Denmark, Sweden, and Norway.
Joking that he and his colleagues are like Vikings, Jensen added that he is pursuing productions in Africa, with further details to be announced. "Why not?" he asked during the panel, adding, "Talent is talent, money is money, (it is) not a big problem if you have a modest budget."
FINDING THE EUROS
An afternoon session, "Risky Business: Banking on Bankability," looked at the state of film finance today, led by session chair John Sloss of Cinetic Media. Heather Mansfield of Mansfield Associates, Adrian Ward of The Lewis Horwitz Organisation, Mo Yusef of Invicta Capital, and Robert Strosser of the advisory board of German Association of Media Funds joined Sloss. While efforts like Mansfield's represent financial institutions, like The Royal Bank of Scotland and Ward's group also works on gap financing efforts, Yusef is primarily an equity partner in financing UK qualifying films.
Mansfield said that European producers do not understand the value of financing that can be gained from the four banks that offer gap monies. She cautioned, though, that banks would not come in for less than $1 million. "The difference between gap and equity (financing) is if you get an equity layer they will want a sliver of your upside forever," Mansfield said. "Adrian and I put (in) gap money (and) as soon as we are re-paid, we are gone -- you should look at that as a benefit not as a drag factor."
"I would far sooner put money into 10 $1 million movies, than a $10 million movie," said Yusef. "I feel I could sell that," he added, noting that on the contrary today, "The individual who is inclined to put his equity into a film will be more drawn to a $10 million project (with an actor that the has heard of) -- a portfolio approach is much more interesting."
Sloss asked the panelists to what extent financiers, either gap or equity, take into account pure creative elements that are based more on taste and quality.
"Banks shouldn't," Yusef said, "The strength of the creative elements will I assume determine the level of pre-sales," he offered, saying that that will guide banks in making their decision.
"There is a creative rule of thumb," offered Mansfield, saying that even with a film from a first-timer a good script is a good script and a young director can be protected with an experienced cinematographer, but at the end of the day, producers need to be seasoned. "You cannot lend millions to someone who has not handled millions."
"We do read scripts as a minor portion of due diligence," Ward said, adding that he also considers the film's pre-sales as a sign that a project is worthy."
"We don't pretend to know anything about what is a good script and what will work and what won't work," Yusef said, "But it's changing. We are getting involved on more of a risk level, that's a problem and a challenge -- because we know even less, than the people who greenlight these things, about what will work and what won't work. So how do we decide?"
"That is specifically what I do," inserted Mansfield. "It's a question of linking exactly with what your bank is expecting to achieve."
"It's not a business that most rational banks would be in," said Ward, "That's why there are only four banks in the world that do gap financing right now. It's about building up the layers -- lets look at the sales company, let's look at the track record of their films, the genre." Continuing he added, "There are no absolutes, but it's all we have to go on. I cannot over emphasize the role of the pre-sales. Even if we see a lot of negative, if pre-sales are good, then that will stand out. We need to be able to make a rational decision and justify that to the credit committee."
"It you had a choice why would you go for equity," posed Yusef, "If you believe in your project, you wouldn't choose equity," he said, asking why filmmakers would want to give up pieces of their films and adding that perhaps the movies that are seeking equity money are ones that their makers don't feel so confident about.
"Sadly, I think you are thinking too hard," smiled Mansfield, with Sloss nodding in agreement. "There are myriad reasons for equity, and equity can be priced in other ways, I think that's a whole other panel, really," Sloss added. Concluding the discussion, one attendee asked how it is that in America so many movies are being made with independent money and no government support.
"There is no real process in the U.S. to ordain people through film schools and put them into a system to finance their first movie," Sloss said. "Ninety-nine percent get financing by family and friends and credit cards." Continuing he said, "America is full of people who are willing to do that, and unfortunately, and I really mean this, will basically mortgage their house and their future to follow their vision. We (at Cinetic) see 400 of them and get our pick of them and we've taken the ones that have really worked."
"The streets are littered with the bodies of the people who shouldn't have made their movies," Sloss said, pausing a beat and concluding the discussion.