Magazine article Variety

Balancing the Bottom Line

Magazine article Variety

Balancing the Bottom Line

Article excerpt

As studios put more and more of their resources into tentpoles, independent producers are pondering a key question: How much money is the right amount for a project?

For starters, with the Cannes Film Festival looming, producers are dealing with "smarter" money.

"The equity is now much more sophisticated - they look at it on a risk basis rather than making an emotional decision and I actually prefer those investors over emotional ones," says Myles Nestel, head honcho of 3-year-old financing entity the Solution Entertainment Group. "Prior to the crash in 2008, people were throwing money at projects."

That means a microscopic attention to detail on such pictures as Pierce Brosnan's spy thriller "November Man." "We were originally set to shoot in Germany. And we had to compromise by shooting in Eastern Europe, and in Serbia, and it saved a significant amount," Nestel recalls.

Lotus Entertainment co-chair Bill Johnson, who has an exec producer credit on opening night film "Grace of Monaco," believes the usual guidelines for the current marketplace require about 60% to 65% of budgets to be covered by foreign presales - though that's not a hard-andfast rule. "You have to be crafty," he adds.

Jamie Carmichael, president of the film division of Content Media, says the limits are clear: "It's a dead zone between $6 million and $25 million, so there has to be a really good reason because DVD revenues continue to decline. It needs to have a genuine theatrical capacity. If you're above $25 million, you can get the writers and directors that lead to a theatrical release."

Carmichael says the change in thinking is being driven by change in the value of home entertainment along with TV stations not buying as many movies.

But projects are still getting made in that so-called "dead zone." For example, Participant Media financed the $12 million thriller "A Most Violent Year," written and directed by J.C. Chandor ("All Is Lost") and starring Oscar Isaac and Jessica Chastain, then sold U.S. rights to A24 earlier this year. FilmNation is selling foreign territories at Cannes.

Participant is also in post-production on its sequel to "The Best Exotic Marigold Hotel" with a budget in the high teens - marking the first time that a Fox Searchlight title has ever gotten a sequel and giving hope to independent producers everywhere. …

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