THIS IS HOW TO GET YOUR MOVIE FINANCED

The top ten questions I get from filmmakers, aspiring and already actively making films, are about financing.

First and foremost — a PSA: many filmmakers think this is what producers do — they get you the money. End of story.

And I have to say, if that’s all your producer does, they absolutely suck. Financing is an important piece of producing, but it’s just one part of a multifaceted job living at the intersection of creativity, finance, and logistics. Back to the topic at hand.

I wrote about money last week, and the always excellent Jon Stahl suggested I post a play by play of getting a film financed. So today, I’m doing just that. Thanks, Jon!

Along the way, I’ll write about the following:

- developing a budget for your movie

- the different types of financing available

- what to look out for when signing deals to get your movie financed (buyers remorse!)

If you’ve ever had questions about any of the above, read on and hear about how we got our 2023 movie THE MILL financed.

Here we go…

THE BACKSTORY

I hate ‘general meetings’. These are largely a waste of time, and a plague on the industry. They are a method for people who collect salaries to justify their existence to those who pay them.

I’ve had two things EVER come from a general meeting. And both from this one meeting in 2022. A meeting that almost didn’t happen because the guy I was meeting with canceled on me 3 times. Honestly, I took the meeting as a goof to see who kept cancelling on me. And I’m happy I did, because I gained a movie I love, and one of my closest friends because of it. That meeting was with a producer named Josh Feldman.

Josh had long been the VP of Hasbro Studios, in charge of overseeing franchises like TRANSFORMERS and G.I. JOE, but he was branching into the independent space, where I’d spent my career. Once this meeting finally happened, over ZOOM, it felt like I was taking to a version of myself who had taken a different path in life. We liked the same movies, knew the same literary references, and laughed at the same extremely dark jokes. As it turned out, our lives and careers were intersecting at an interesting moment for both of us.

At the end of the meeting, he asked me something no one ever does: if there was one movie you could make right now, what would it be? (Execs — ask this question and filmmakers will LOVE you).

This teed me up to go OFF.

There was a script I was obsessed with, but the rights were tied up in a weird situation. It was a contained sci-fi character piece set against the backdrop of a vast corporate conspiracy that pointed a lens at a vampiric late stage capitalist system. Much of the story took place in one room with a single actor being spoken to by two unreliable off screen voices (fuck, I still want to make this movie).

He said he’d get the rights for me (I already loved this guy). And I explained why that actually wasn’t possible. I then saw a look in his eye, and a dangerous half smile cross his face. Oh shit. He was onto something. He said he remembered a script from a few months back that checked all these same boxes. He needed to bounce because a: we were two hours into a 30 minute meeting and b: he was going to check with the writer to see if it was available.

Just before I unplugged for the night (I turn my phone off 30 minutes before I try to sleep — you should too), the script hit my inbox. It was available.

I didn’t sleep that night. I devoured this script. It. Was. Everything. An incredible character study, a vicious skewering of American work culture, a film I could see jumping off the page. The writer, Jeff Thomas, had created a world I wanted to spend the next two years in. It was a beautiful fever dream that lit a fuse in my soul.

I wrote the treatment for the pitch deck that night. Sent it to him the following morning. By the end of the week, my then teenaged daughter had designed a pitch deck for us, we had locked in the script rights, and we were ready to start the hunt for financing.

(If ya’ll have questions on pitch decks, treatments, locking in script rights — let me know — I’ll write about those things in the future — images from this pitch deck found in photos throughout)

I committed to working on this movie, and only this movie, until it was done. I’d never done this before, I’d always developed a handful of movies at once, thinking I was increasing the likelihood one would get financed. The shotgun approach. Of course, I made commercials, worked on a documentary, had other gigs while we put this together. But movies? Nope. This was it. Critical focus until this thing was in the can and picture locked. This time around, I would be a sniper.

But first. We needed a budget:

DEVELOPING A BUDGET FOR YOUR MOVIE

There was a Sundance movie I’d loved that I thought was similar in scope, so I contacted the line producer (we’d worked together years prior, and I’d run into him at a festival and we reconnected — even though he initially didn’t recognize me… a story for another time) and we started working on a traditional independent film budget.

He felt that it could be $3-5M. This is bigger than what I typically work with, but the indie market was wild at the time, with streamers sending costs and budgets sky high. And his last film had been profitable at this level. There’s a ton of institutional knowledge that goes into producing a budget. I know enough to look at one, cut costs, create efficiencies, and where I know we will go over so add in those places. But good god man, I could not create one on my own. I rely on people far better with numbers than myself.

So he took about a week to put the budget together while we worked on casting. A note here — if a line producer charges you up front for a script, find a different line producer. This is their time to pitch you on how they’d made the movie, to get the job of line producing it with you. This guy didn’t charge me, by the way. But personally, I’ve NEVER seen a movie get made from a budget where a line producer was paid up front to make it. You want a partner here — not someone who is being paid before you are.

My first idea for the lead was Lil Rel Howery. I’d worked with him on a SXSW winning comedy called I LOVE MY DAD, and me and one of the other producers became kind of obsessed with the way he worked, and we wanted to make a drama with him. For this reason, when reading the script, I kept seeing him as the main character, JOE.

The week goes by, the budget comes back, and it’s $4.99M. Cool. Now we need to find the money.

I started talking with some sales agencies, and there was initial interest in the project, but it needed a cast before anyone could do anything. Some of the agents started throwing names at me, and I entertained them because I wanted the financing, but always had Rel on the brain.

Honestly, the initial response to this project was STRONG. It was March, and I thought we’d have the project financed and be shooting by September

.

This is a good time to talk about…

THE DIFFERENT KINDS OF FINANCING

1. Equity — this is straight investment in the success of your film. An individual, individuals, company, companies, etc — invest actual money in your project. Typically, you pay them back plus a 20% premium on the amount invested, and they then have claim (collectively if more than one investor) to 50% of the revenue of the project. Leaving the remaining 50% for the ‘creative’ side of the film — cast, crew, writer, director, producers. This kind of financing is the most flexible, but also the most expensive in success. Usually, with an equity financed movie, the plan is to take the film to markets, festivals, etc. and sell territories, or the world, to studios, distributors, and streamers, in hopes that total sales amount to more than the total investment, and everyone sees profits.

2. Debt — these are loans. Typically against secured access like tax credits, pre-sales, and minimum guarantees. This is the easiest money to find. Sometimes you can get unsecured debt, but then you (as the producer) are on the hook for it. This money you typically pay back before anyone splits profits, but it doesn’t cost you anything besides whatever interest you negotiate. It’s frequently the least expensive money in success. You can get debt financing from banks (sometimes), specialty film lenders, and private individuals. Almost every film has secured debt. And I personally use unsecured debt strategically, but this is only because I have a strong track record and am not particularly risk averse. You use debt to lower equity and increase potential for profits.

3. Pre-Sales — I referenced this in debt, but you can also pre-sell territories or even the world, and get money up front so you don’t need equity, or as much (or any) debt. This means you have already sold that territory, and you can use the money to produce the movie. You are limiting risk, but limiting potential reward. If you pre-sell to a major streaming platform or studio, it can also be a way to have buy-in from a distribution/exhibition partner early on, in hopes they will be more invested in promoting your movie.

(Please hit me up for any additional clarity on these topics)

Ok. Back to my play by play.

We had early excitement from agents, distributors, etc. In fact, the head of the independent department from one of the major 3 agencies called me personally to tell me how much they (protecting gender as to not reveal identity) loved the project. How COVID had made them reflect upon their own life and sacrifices made to work, and how this project spoke to their soul — and they were going to do everything possible to get this movie made. This was really cool of them.

BUT no one was jumping, even with major firepower behind us. I knew we needed to get the train in motion, because no one feels the need to jump on unless it’s leaving the station. Momentum is the single most powerful force in the film business. This is also basic human psychology, and surprisingly effective.

Me and Josh Feldman both decided to tap into our personal savings to get things going. With our money AND time on the line, we truly couldn’t afford to lose.

We hired our Production Designer Amy Williams, and she brought on her concept art team, and we started rendering the set designs, so potential partners could really see the world we were building.

(early set design sketch)

I’d done this on my previous movie WE NEED TO DO SOMETHING with set design and creature design, and it worked. So I assumed this would too.

What I didn’t assume was that getting Amy started would also lead directly to our first financing partner. It was now May. We were making good progress, but things were about to kick into a new gear.

Amy called me one day while I was working out (I have a horrible habit of taking calls while working out… this is annoying to me, and the people on the phone whose ears I regularly pant in. But apparently it works?) and said she had a friend who might be interested in hearing about our financing plan.

I met with this friend, thinking it wouldn’t lead to much. By the end of the call, she informed me that she recently experienced a windfall of cash, and told me she was in for the full $5M. She said to send a contract and she’d send the money. This was officially the easiest money I’d ever raised. I called Josh, we celebrated. And kicked into casting mode.

But as they say, easy come, easy go.

A week later, she called and said her advisers recommended she put up $2.5M, and bring on another partner to finance the rest. While this was deflating, we still had half the money. This was a great start.

Equity can be hard to come by, so we started looking for ways to leverage our $2.5M equity with debt, but we didn’t have any pre-sales, nor did we want any, so we started looking into states and countries where we could receive tax credits.

Here’s how Tax Credit Financing works, by the way. You shoot in a state/country with a credit. The money you spend in that place generates the credit, which is typically based on a percentage of what you spend. Let’s say you shoot in New Jersey. You get 30% (plus bumps for diversity, and shooting in uncertain areas) back for every dollar you spend. But you don’t (in most cases) get a check from the municipality. You get a credit certificate. You then sell this certificate for roughly 90% of its value to a company or individual who has a tax liability in that municipality.

This is a great deal for all involved. The production lowers its equity need, the tax payer gets a 10% discount on their taxes owed, and the municipality gets a bunch of business they would’t have otherwise seen.

On our $5M budget, we estimated we could generate a $1.5M credit. This would mean we could sell it for $1.35M (after the 10% discount). So safely, we could obtain 90% of that $1.35M in debt financing — $1.215M. This lowerred the equity or pre-sales we still needed to be fully financed to $1.285M.

At this point, we could really cook. We reproached everyone who was initially interested to let them know how much progress we’d made. On the agency side, they kept dangling other actors in our faces. We sent the script to a few, and waited… and waited…. and waited. I wrote these dumbass letters explaining why I wanted these other actors for the role (THEY NEVER READ THESE) and waited. This process is terrible and generally useless.

Literally two months went by. It was now July. We still had our $2.5M, and our set designs, and I started working with an animator to develop our AI villain.

But really nothing was happening. So Josh and I said fuck it. Let’s call Rel. So we did. And we waited. And waited, while Rel shot VACATION FRIENDS 2.

Then one day Rel called me (it was now August). He was in. He loved the script, loved the way I wanted to shoot it, and had been looking for a dramatic role to flex his acting chops.

So we went back to ALL the same people who were interested but not committed again. Now they were ready to move. A note here: most of these places said they needed a bigger star to get the financing initially — but the second we locked Rel, they all changed their tune. The expressed their love for his work, and said how brilliant a choice he was. I get this all the fucking time. The ‘level’ of actor agents, studios, streamers, buyers, financiers SAY you need when its theoretical has absolutely no bearing on who they will actually support once an actor is on board.

Cast who you want, and who will make the movie great. Ignore the noise that says otherwise.

It’s nonsense.

I wasted four months playing their game, only to end up with all of them ‘loving’ my first choice.

It’s worth mentioning — a sales agent / producer I work with frequently, Priscilla Smith & Kendall Anlian from The Coven (TERRIFIER franchise) were huge proponents of this film, and Rel, from day one and did everything they could to help us get it financed. So this entire time, they were in the background trying to push it forward while working on TERRIFIER 2. It just wasn’t an international pre-sales kind of movie, which is what they were mostly doing at that time.

To her credit, our $2.5M financier was also steadfastly there for us.

We found a debt financier, and had more offers to provide post-equity deals than I can count. I didn’t include post-equity as a type of financing, because I don’t think it’s real. It feels a bit too Ponzi adjacent for me. The way its been offered to me is that a company who owns a post-production facility will put up their services as equity, but they’ll include the cost in the budget so you get the tax credit financing towards the services, but then you only have to pay what the tax credit generates, and not anything beyond that. I always see these offers and never take them because I actually don’t understand them, and I don’t think anyone should agree to anything they don’t understand. In my experience, anything too complicated when it comes to financial instruments is typically a scam.

So with a majority of our financing in place, and our lead actor locked, we were ready to get this last piece of financing and shoot.

We took 100+ meetings over the next 45 days. Had followup meetings with no less than 15 interested financiers. Made it to round 3 with 5+. But again… we were stalled. No one was biting.

We talked to our current financier. Talked to every sales entity willing to help. Checked with Rel’s team on his availability.

Here was the situation — it was now October, and Rel had to finish shooting by the end of January or we’d have to recast. We’d be starting from scratch. This is how movies die.

The urgency to get financed was existential. Me and Josh talked. We checked with our line producer and he didn’t think we could make the movie well for less. We needed that money.

Josh had an unrelated meeting with a division of 20th Century Studios who made Hulu Original movies. The executive there said they had a slot they needed to fill for next year’s Huluween, their annual horror programming window. But it came with some very specific requirements — the movie had to be delivered to the studio by August, the budget would have to be SIGNIFICANTLY lower than $5M, and everyone involved would have to agree to a buyout from Hulu — meaning no backend. Meaning this would become work for hire for the studio. Where were the bloated streamer budgets everyone was becoming so accustomed to??? Apparently things were changing, as the entire industry would soon learn.

We put together literally every head we had. And ended up calling a line producer / producer I had worked with on a few documentaries and commercials, Jesse Ford. Up to this point, Jesse hadn’t been involved with a narrative feature, but his brother Shane was my editor on features, and we all talked and agreed Jesse could do the job. My thinking was, and it turned out to be correct, he didn’t know the world of bloated streamer budgets. He could use a first principals approach to building a budget based on what it actually cost to build the thing.

So over the course of a week, we put together a budget and schedule, and talked to Rel’s team and worked out a deal that would get us to our SIGNIFICANTLY less than $5M budget, get the movie shot before the end of January, and through post and delivered by August. THIS WAS COMPLETELY INSANE.

But we delivered this package to the studio, they took it to Hulu, and the day before Thanksgiving, we were greenlit as a pre-buy for Hulu. This made for a pretty great holiday weekend. To make the numbers work, we had to come up with the funding to advance the tax credit, which we could make work in New Jersey, at the one studio we could find with a ceiling high enough to fit our 21 foot tall set. Jesse, beyond coming on to produce his first narrative movie, came up with the tax credit financing. This still doesn’t cease to amaze me.

The lesson here: never compromise your creative vision — but be flexible on EVERYTHING else. Be water, my friend. Better to make something for half of what you thought you needed, than have a magical number in your mind that you’ll never get. By the way, you’ll find creative solutions and have breakthroughs you’d have been robbed of if you didn’t have to innovate to make it work. These are gifts — investments in your own ingenuity that pay dividends down the road if you let them.

By the way, everyone who tried to put this together for us independently, agents, The Coven, our $2.5M financier were SUPER COOL about us taking this Hulu deal. They knew we had to make the movie, even if it meant we were missing out on making it with them. This was the result of maintaining good communication with them throughout the process. Communication is maybe the #1 thing that builds/destroys investor and partner relationships.

Once that funding hit the bank, 20th cash flowed the rest of the money, and we went into December SPRINTING towards a January 2, 2023 start date.

We made the movie wrapped on 1/19, FLEW through post, it was released, hit #1, and all was awesome.

BUYER’S REMORSE

Ok. So maybe not all was awesome. I’m forever indebted to the team at 20th who fought for this movie and the team at Hulu who released it. However… selling a movie to the largest entertainment company on Earth (20th and Hulu are owned by Disney) comes with some strings attached.

*side note — it will never not be funny to me that the most intensely anti-corporate I’ll probably ever make was also probably the only Disney movie I’ll ever make.

After the movie gained some traction upon release, we received quite a bit of outreach about sequels and spinoffs. We even received one straight up cash offer from a GIANT studio in another country for a foreign language theatrical remake that I still am excited about the idea of, which would be to take this film’s basic premise, and apply that country’s work culture to the story.

But huge corporations move at their own pace. And do things their own way. That doesn’t include selling sequels and spin offs to other companies they view as competitors. All of these opportunities were a HARD NO for 20th/Hulu/Disney. It was heartbreaking.

I wouldn’t quite say this is true buyer’s remorse though. If I knew the outcome and had to decide if I wanted to do it again to get the movie made, I’d do it. No questions asked. The experience was one of the highlights of my life as a filmmaker.

When I moved to LA, I saw the film billboards on Sunset Blvd, and told myself one day, I’d have a film I directed on one of those billboards. And it wasn’t until this movie — nearly 20 years into my career, that this dream finally came true.

It was a highlight for many more reasons that that, but that’s the one I have a picture for, so there you go.

WHAT ABOUT THE FUTURE?

It now also serves as an example of why I’m building a direct to consumer storytelling studio. Because I don’t want to spend A YEAR trying to get a movie financed, and then once I finally do and it’s successful, to have someone else tell me I can’t continue telling that story.

Because I believe in today’s world, artists can and should own their work.

MAIN TAKEAWAYS TO GETTING A MOVIE FINANCED

- Critical focus is key

- If you aren’t willing to take HUNDREDS of meetings that might waste your time, you don’t deserve anyone’s investment

- Be creative, just because an expert tells you what something will cost, look for ways to be more efficient. “Be water”.

- Your financier will be your partner, like a marriage, for better or worse

If you want to make a movie in the semi-traditional way. I hope this is helpful.

But if you want the unfiltered heartfelt advice I’d give to someone I care deeply about:

Write a story you can produce with the resources you already have available — own it in every way you possibly can, and build a career that isn’t dependent on a system that no longer exists.

PEACE