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How to Manage The Relationship Between Film Producer and Investor

How to Manage The Relationship Between Film Producer and Investor

As the co-founder and Executive Director of the equity fund Impact
Partners, Dan Cogan has supported many independent films, including “How to Survive A Plague, “Hell and Back Again,” “The Cove,” “Detropia,” “The Island President” and “Midway.” Yesterday at the Doc Conference at The Toronto Film Festival, Cogan presented “The Gift,” a speech about how filmmakers can best manage their relationships with the investors who make their work possible. Cogan advised producers to give filmmakers the freedom to make the film they want to make and filmmakers to respect “the gift” they have been given and make the best film they can. Read his full speech below:

Venal. Manipulative. Short-sighted. Just downright pathetic.

There are no better words to describe the dominant strain in the relationship between film producer and investor throughout the sorry history of filmmaking.

Both sides are to blame for this state of affairs.

Film producers, often desperate to get a film made, will do anything to get investors to jump in. Investors, knowing little about the film business other than its supposedly glamorous side, often aren’t aware of, or even focused on, how to protect themselves properly.

Or else they become so enthralled with the creative side that they believe their investment gives them the right to take the film over creatively.

Both sides enter the equation with warped expectations, and both often leave feeling like they’ve been duped, or had, or just, at the end of the day, feeling like life is too short for all this nonsense.

In the low-budget world, the venality of it all tends to be less pernicious. But false expectations, dramatic blow-ups, unhappy partings — they are no less common.

In short, the basic model of the relationship between financier and film producer is broken. And yet, since films still continue to limp along, getting made, everyone lives with the drama, the imperfections, the hassle. It’s seen as just part of the process.

But it does not have to be so.

If you step back and look at the process systematically, outside the context of whether any one film actually managed to get made, you can see the current system actually serves nobody’s interests in the long run.

The producer does all this work to get an investor into a film, and then, because the relationship ends unhappily, the producer has to lay all the groundwork, all over again, with a new investor or group of investors for the next film.

The investor has the immediate sugar rush of being involved in one film only to wake up with a massive headache and never want to go near another film again.

But the biggest loser is the industry itself. We need more investors coming into and staying in the business, not fewer.

But, as I said, there is a better way. And it’s actually very simple.

It’s called, The Gift.

Each side of the equation — the film producer on one side, and the financier on the other — must see their relationship not as a forum for venality, manipulation, and mutual jockeying for advantage.

They must do the opposite. They must see their relationship as an exchange of gifts. 

Each party in the relationship between film producer and film financier has something the other wants. The investor gives the filmmaker the gift of money. The filmmaker gives the investor the gift of art. They are each, in the space of each other’s lives, invaluable.

Now, just because these things are gifts does not mean there are no rules. To the contrary.

The rules of gift-giving are deep, fundamental, and shared by all humanity.

What does it mean to properly exchange gifts in the context of making a film?

For the investor it means this:

– If you give your money to a filmmaker, you must acknowledge that the money has truly gone from you to them, meaning that it is their film, not yours, that is being made.

– You cannot demand to make creative decisions.

– You understand your very specific place in the production, which is a central one: to choose the artist to support, and to make their artistic creation possible.

Of all the artists you could have chosen to work with, you have chosen this one. That is an act of immense power.

Now, respect your own choice, and give the artist the freedom to make their art, which is an art you love and respect, which is after all why you’ve chosen to work with them to begin with.

For the filmmaker, it means this:

– Be grateful. Someone has just fulfilled your dream.

– Be respectful. If your investor is smart enough to have chosen you, of all filmmakers, to work with, they must know what they are doing.

– Do not return their gift with anything other than an equally wonderful gift in return. Meaning: make a great film.

It also means: don’t draw your investors into the process unless what you are offering them will make them feel better about their investment, not worse.

For example, don’t show them rough cuts if they aren’t ready. This only leads to disappointment in the investor, and disappointment in you if they don’t like it.

Investors aren’t meant to fix the problems a film is having — that is your job. But investors can give support.

Do not make them feel that you are unworthy of it.

In fact, for both sides, strive to make every interaction on the film an exchange of gifts.

For the filmmaker, this means: involve your investors in the process of making art in a way that makes them feel, rightly, that they made all this possible. If things are not going well, and you are not sure how to fix it, then that is actually the time to be honest and invite them in to problem-solve.

You will be surprised how open people are to confronting bad news when they feel you respect them enough to share it.

For the investor, it means: give support to the filmmaker — emotional, psychological, practical – as much as possible.

Filmmakers are sensitive artists, whether they show it or not. Your support means a huge amount to them, and if you give of it freely, you will receive great gratitude in return.

None of this means that you don’t protect yourself contractually. Just the opposite. The more you set the terms for the relationship in a clear, up-front, and contractually-protected way, they more everyone is on the same page, and knows what is expected from them.

But if you approach your relationships, contracts aside, from a the spirit of gift-giving and receiving, you will find an amazing set of consequences will follow:

1. You will make a friend. A true friend. That is very valuable thing in this business.

2. For the investor, if the film succeeds, you will not only make money on your investment, but you will have a relationship with a successful and loyal filmmaker who wants to work with you again. The result is both bragging rights, and greater chance of future financial success.

3. For the film producer, even if this film fails, you will have a relationship with an investor who may still actually want to work with you again, despite failure.

Since the number of factors that can sink any one film is so great, this is a very valuable kind of relationship to have. You will likely need more than one bite at the apple to be successful. In other words, you may actually be on your way towards building a career.

All this is easier than it sounds.

The rules of gift-giving were laid out clearly for everyone to see by the great anthropologist Marcel Mauss, in his foundational 1925 book, THE GIFT. He understood that the giving and receiving of gifts was one of the fundamental structures that underlay all human interaction.

And the most important rule, he said, was this: When you are given a gift, you must give back a gift in return that is of equal value. If you give back less than you receive — or, just the same, if you give too much, and do not expect back enough in return —  the relationship will turn out to be a bad one.

So, investors, don’t be undisciplined and spend more than you need to. Bargain aggressively with your filmmakers.

And filmmakers, if you take the money you need to make your film, make sure you make it well.

This sense of equality — that the amount of money a filmmaker invests is equivalent to the value, in the glory of art, or in the other glories the investor feels they receive from being part of the world of film – this sense of equality is the key to making the whole system work.

Filmmakers, don’t see yourself as weak because you need someone else’s money. Investors, don’t see yourself as dominant because you have the money a filmmaker needs.

Filmmakers also have what investors want — artistic glory —  and that is worth the money the investors are spending, or they would not spend it.

So, the two of you, producer and investor, are equals. You each have something the other wants, and you can satisfy each of your dreams by making an equal trade.

If you see the financing of a film in this way, you will find success, even if the particular film ends up failing.

As Mauss wrote in his conclusion to THE GIFT:

The Bretons, and the Chronicles of Arthur, tell how King Arthur, with the help of a Cornish carpenter, invented that wonder of his court, the miraculous Round Table, seated round which, the knights no longer fought. Formerly, ‘out of sordid envy,’ in stupid struggles, duels and murderers stained with blood the finest banquets. The carpenter said to Arthur: ‘I will make you a very beautiful table, around which sixteen hundred and more can sit, and from which no-one will be excluded… No knight will be able to engage in fighting, for there the highest placed will be on the same level as the lowliest.’ There was no longer a ‘high table,’ and consequently no more quarreling. Everywhere that Arthur took his table his noble company remained happy and unconquerable. In this way nations today can make themselves strong and rich, happy and good. People, social classes, families, and individuals will be able to grow rich, and will only be happy when they have learnt to sit down, like the knights, around the common store of wealth.

This is the secret. Pass it on.

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