Using real world examples, this 2 1/2 hour workshop explores the distribution process from the perspective of the Independent or Low-Budget filmmaker with an emphasis on common errors and assumptions that can prevent a film … I am a partner in the corporate entertainment department of Greenberg Glusker, practicing entertainment, corporate, and tax law. The film budget template takes you only to this level of funds, and so it is up to the filmmaker to use another form, such as the Film Financial Projections Template, to determine marketing, publicity, film festival and other post production costs. The reason that these categories are relevant is that several items (such as insurance premiums and completion bond fees) are often calculated as a percentage of the budget, but excluding all or a portion of the above-the-line costs or other costs. Producers often increase the budget for a picture by tagging on additional inflated “producer fees” or “overhead charges” for themselves, which are nothing more than a mark-up to the true cost of the film. For example, above-the-line costs include the costs of acquiring the underlying rights, script costs, producer fees, and payments to key talent (director and main actors). Opinions expressed by Forbes Contributors are their own. Contact Email. [1] One of the consequences of the Sony hack was the release of budget information of many films or TV shows, including the 2015 Adam Sandler film Pixels. Of course. Distribution companies take care of this work, and they usually have a contract that charges a specific fee and a percentage of box office receipts. Film budgeting usually occurs in two different phases. Which distribution model is best for low budget films? And The Hollywood Reporter notes that the average cost of a feature film is even lower, spanning between$70 and $90 million. I was an adjunct professor at both the UCLA Law School and the UCLA Anderson School of Management, teaching Entertainment Law and Finance for many years. There are no guarantees, but you should always give it your best shot. Contact Phone (416) 515-2222. Remember: 1. Movie budgeting contains the key information that you must have for your production. The net result is that any proposed increase to a film’s budget has a ripple effect that can more than double the proposed increase. A more honest approach would be to say that the budget is $10 million, but the producer wants to make at least $1.5 million of profit. In other countries, producers who exceed their budget tend to eat the cost by receiving less of their producer's fees. If the director is a wild perfectionist, demanding absolutely perfect special effects and endless retakes, the budget will increase dramatically. The budget excludes film promotion and marketing, which is the responsibility of the film distributor. However, if you are an independent filmmaker you don’t want to get caught out … Step 3. The below-the-line costs are basically all costs of production and post-production. If it was successful selling enough territories based on the poster, Cannon would contact the named talent and begin the process of producing the film. Unless the person preparing the initial budget has a firm grip on the director’s psychological predilections, the budget will be no more than a wild guess. For example, if two identical films with the same script and stars were made, and one was made for $50 million and one was made for $10 million, the one made for $50 million would typically sell for five times more than the film made for $10 million. [2] Even though Sony's out of pocket for the film was reduced because of the incentive, it does not negate the fact that the actual cost (amount spent during production to make the film) was still $129.6 million. This, in turn, will have the completely crazy impact of reducing the amount that the film can be sold for because of the budget/sales corollary. To illustrate this, I have calculated how much larger a film’s box office gross was as a multiple of the marketing spend. If the budget calls for Godzilla to be played by a ten-dollar hand puppet, the director better not come whining later to the completion guarantor requesting funding for a life-size model. No kidding. ), and other (insurance, completion bond, etc.) Don’t let your low-budget … A film’s budget plays a dominant role throughout the film’s life cycle—with implications going far beyond the mere cost of the film. I have been named (a) one of the top 100 entertainment lawyers by the Hollywood Reporter, (b) one of the top 25 entertainment lawyers by Variety, (c) one of the top 100 lawyers in California by the Daily Journal and (d) one of top 3 "Most Influential Lawyers" in media by the National Law Journal. I graduated from UCLA (Phi Beta Kappa, Summa Cum Laude) and UCLA Law School (first in class). Film budgeting refers to the process by which a line producer, unit production manager, or production accountant prepares a budget for a film production. The Bigger the deal the less control you have. Film budgeting refers to the process by which a line producer, unit production manager, or production accountant prepares a budget for a film production. It often only provides the top … Types Of Films They Distribute. The budget does include self-charged “producer fees” paid to the producer. Insiders are always using this lingo, so you need to know it. It is critical that … 5600PRODUCTION FILM & LAB 1,150 5610Field Drives - LaCie Rugged Drives 42 TB Drives 250 1,000 (Assume max 4 hrs/~64 GB per day, 140 hrs total, need 2.5 TB total, x2 for mirror) 5620Tape Stock 0 … Though movie studios are reluctant to release the precise details of their movies' budgets, it has occasionally been possible to obtain (clandestinely) details of the cost of films' breakdowns. Advertisement Marketing makes up a huge chunk of modern movie budgets -- $35.9 million on … Multiple drafts of the budget may be required to whittle down costs. The contingency is included in the budget for purposes of the budget/sales corollary (i.e., upping prices), even though it may never be spent. Director James Cameron ran over budget and offered his fee back to the studio. Good luck. Smaller Budget and Different Films. There are several miscellaneous items that arguably should not be included as part of the budget, but are. Similarly, premiums paid to completion guarantors and insurance companies are calculated as a percentage of the budget, not flat amounts, and every film budget includes a contingency for possible excess costs, always expressed as a percentage of the budget—usually 10%. CASTING ROLES! The lender will, in turn, hand it to the completion guarantor with a request to guarantee that the film can be made for that budget. Almost without exception, the completion guarantor demands an increase in the budget to give the completion guarantor more breathing room. This document, which could be over 130 pages long, is used to secure financing for and lead to pre-production and production of the film. The bigger the company, the bigger … Each studio (and each movie really) has a slightly different allocation of budgeted funds, but they all generally share common line items or categories: Trailers: theatrical and internet for both Domestic … Filmmakers with a movie “in the can”, or close, looking for a distributor are encouraged to contact us via the filmbudget.com website Contact Page. Again, the tentacles of the budget/sales corollary at work. However, the cost of delivery of the film print to distributors is typically treated as a distribution cost, and is generally not included in the budget. I graduated from UCLA (Phi Beta Kappa. I soon learned that the budget was really $12 million, and the producer had received a “producer fee” of $2 million, which was included in the budget. Deferments and participations paid to talent are not included in the budget. When it comes to reporting the budget of a film, the amount of the budget represents the gross budget, which is the grand total of actual spending to produce the project and not to be confused with net budget, which represents the final out of pocket for the producer after government incentives or rebates ("If you pay $50 for something but have a mail-in coupon for a $10 rebate, your gross spending still amounts to $50."). A Business Plan, used for the purpose of raising funds from film … We are accepting for consideration indie films in post production or in the film festival circuit. Director of photography Edi Santoso, right, during, the production of the film “Sin” in Jakarta, Indonesia, in February. Using real word examples this 2 hour course explores the distribution process from the perspective of the Independent or Low Budget filmmaker with an emphasis on common errors and assumptions that can prevent a film … It is not ideal, but few things are in the micro-to-low budget filmmaking process and the film … This was a presentation done for the Fairfax Filmmakers Club. The documents had become public domain after a lawsuit involving the film. For an example of a budget for a $2 million independent feature, see Planning the Low-Budget Film by Robert Latham Brown. The good news was that because of the budget/sales corollary, the pre-sales increased by more than enough to cover the increased budget. In this range, we see a lot of movies many would consider… well, pretty average. As you can guess, the buck stops with the completion guarantor, who is usually the first to seriously question the budget. The budget almost always includes an artificial mark-up referred to as “overhead,” usually approximately 10%-15% of the budget. Multiple drafts of the budget may be required to whittle down costs. I.e. While the US system is profitable and can afford to go over budget, some other countries' film industries tend to be financed through government subsidies. For example, if the budget is really $10 million, the producer will charge and retain an additional $1.5 million to purportedly cover its overhead. Movie Budgets. A sales agent will be able to provide you with some sense of the estimated value of the film before he or she brings it to the film market and festival circuit. In the US film production system, producers are typically not allowed to exceed the initial budget. The completion guarantor will then make everyone sign in blood that they can live with the budget. © 2020 Forbes Media LLC. Multiple Media Entertainment Size. By. Perhaps the most tangible aspect of a film’s budget is that the amount that distributors will pay for a film is almost always calculated as a percentage of the budget (the “budget/sales corollary”), regardless of the script, the cast or anything else. A few taps on my trusty calculator reveal that A$1.1 million is to be the average feature-film budget (including distribution and advertising) – if our film industry is to break even. For example, if talent is paid $20 million up front, that amount will be included in the budget. Image via Flix.org.uk A booking agent, film buyer, or film booker negotiates the lease terms for films from the Big Six and beyond. Make your film the best it can be. Thus, the budget includes, for example, costs of acquiring the script, payments to talent, and production costs. Once I got my brain around this, the rest was easy. All Rights Reserved. However, the cost of delivery of the film print to distributors is typically treated as a distribution cost, and is generally not included in the budget. If the distributor and the studio have a profit-sharing relationship, on the other … Method Of Distribution. This document, which could be over 130 pages long, is used to secure financing for and lead to pre-production and production of the film. But there are also some memo… The remaining $700,000 is the filmmaker's share of revenue. (Witness anything done by James Cameron and Martin Scorsese.) Film financing can be acquired from a private investor, sponsor, product placement, film studio, entertainment company, and out-of-pocket funds. United States December 2020 Genuine movie/Tv serial/advertisement TVC shoot/Event/Print shoot/Script writer/Reference shoot and pilot … You have to do the research and hard work, even when you have a deal with a great distribution company. 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