Getting finance is one of the key skills of a producer, especially an executive producer. So where do you start? According to Pamela Wilson-Endrina, the Director of the Executive Producer’s course at Victoria University, the Producer Offset is providing exciting opportunities for offshore finance.
In Australia producers usually begin with the well-trodden route of trying to finance an Australian project with development money from State and Federal sources, and then using the same government agencies to gather production funds.
That game has recently changed significantly however, with the introduction of the Producer Offset scheme. It offers a rebate of up to 40% of the allowable budget to producers of feature films, and 20% for television programs. This provides an enticement for private investors such as doctors and dentists and other high-income earners who are interested in investing in the high risk area of film.
According to Wilson-Endrina the Producer Offset is useful not only for local productions but also international ones.
“Australian producers have traditionally looked within Australia to finance local films, but the Producer Offset opens up new possibilities with international productions too,” she said.
International projects typically allow for much higher budgets than the traditional $3 to $5 million feature, enabling a bigger canvas creatively and in terms of market attraction. And an international project enables you to find funds offshore.
“The problem with looking only within Australia is that it limits the budget of your production,” said Wilson-Endrina. “You can only access funds from Screen Australia and one or two of the State agencies to produce your film, and perhaps some private investors to fill the gaps. As well, an Australian film has to satisfy stringent requirements under the SAC test for local content.”
On the other hand, an internationally focussed project can entice an offshore co-production partner who may be able to trigger another set of tax incentives from their own locality. And if the film qualifies as an official co-production with a treaty country, the SAC test for local content doesn’t apply.
“The result is that you may be able to explore budgets that are much higher,” said Pamela. ” This is something to consider given that sometimes you’ll have to expend as much time and effort to produce a $3 million local film in the absence of funds as you would a $20 million international project.”
Of course producers new to the industry might feel daunted by the prospect of finding a co-production partner when they don’t have many, or even any, credits as a producer themselves. However Pamela says there are ways of aligning yourself with producers who do have such credits.
“The Producer Offset offers attractive returns to producers with access to investors,” she said, “and they are looking for viable projects to get off the ground.” So if you bring a viable project to a much bigger producer than yourself, you may be able to bring them on board as a co-producer, thus triggering more funding options.
So where do you find co-production partners? New producers and executive producers can discover them at industry events locally like 37 (degrees) South at the Melbourne International Film Festival and the Screen Producers Conference in Sydney; and internationally like the International Film Festivals and associated markets in Hong Kong, Shanghai, Cannes, and Toronto. “The only way to get traction as an emerging producer is to acknowledge that it’s not going to happen overnight,” said Pamela. “It can easily take four or five years to get yourself known as a producer, establish relationships and get into a position where a more experienced player will sit down and discuss your projects with you.”
“It’s all about establishing trust and finding people who are interested in the same sorts of projects as you are,” she added.
Pamela suggests that you can approach distributors for advice early in the process, as some of them have direct connections to finance, such as Village Roadshow. “Talking to distributors at the very least makes them aware of the project,” she said.
One currently emerging trend is the rise of dedicated film investment funds that wish to invest in a large number of film projects in the hope of backing one that does extremely well or using foreign tax credits to provide a gap “loan” facility which earns interest from producers. Luckily for the industry, that’s exactly what has happened recently with The King’s Speech, which had funding from UK based Prescience.
Other examples include: Media Funds Management which provides financing for films and television programs across Australia, New Zealand, Canada and South Africa, and has been involved in Simon Wincer’s The Cup and Fred Schepisi’s Eye of the Storm; and Backup Films in France which recently invested in Julie Bertucelli’s The Tree, and Tom Ford’s A Single Man.
In order to come up with a project that is capable of attracting an international co-production partner, you need to think about universal stories that will do well in all markets, such as The King’s Speech, which is a current model. “Your goal as a producer is to find a project that will attract interest from a coproduction partner, so that you can access the Producer Offset and other tax credits in the partner’s territory, and get the film made,” said Pamela.
Pamela advises new producers to subscribe to Variety International, which provides regular updates on the business of film, including new sources of finance that emerge from time to time.
There are also new models being explored, such as crowd-sourcing, where you can utilise communities online to get funding. Sites like Kickstarter in the US and the Australian Pozible are examples. There is also the grassroots distribution site Filmsprout and the new Cinema Ventures.
Pamela talked about The Institute for International Film Financing, which aims to encourage angel investors to fund independent films in the US. The group organises meetings where several industry experts and potential investors talk about the sorts of projects they would be interested in investing, as well as innovative ways in which filmmakers and producers can finance their films. IIFF began in Silicon Valley in 2003 but has been so successful that it’s ‘gone viral,’ spreading to Los Angeles, New York and now London. It has even produced an offshoot organisation called “Film Angels” which is a group of investors interested in film and screen projects. “IIFF is like an industry think-tank,” said Pamela, “providing a platform for industry discussion on raising money for filmmaking.”
Pamela Wilson-Endrina is the contact for Victoria University’s new short course – the Professional Certificate in Executive Screen Production. Currently, it is Australia’s only course in Executive Producing. Wilson-Endrina worked as a producer in China and spent 10 years in American film finance before taking up a position with Victoria University in 2008.
The Course will be taught by leading industry practitioners on alternative weekends in Melbourne, Sydney and Perth. Current dates in 2011 are: Melbourne 8-10 July and 22-24 July; Sydney 11-13 November and 25-27 November; Perth to be advised.
For more information, or to register, phone 03 9919 1843 or email esp@vu.edu.au.
