Running out of time

December puts me into panic-mode. It's probably the end of year thing, there's a finality to it. We haven't found all the money that we need and the year is rushing towards the finish line. Well, not really, we decided a few months ago that February-March would be much more realistic and given that it's a winter shoot, I'm not worried that the Manitoba winter will suddenly turn into San Diego weather. We could probably shoot winter well into April.

But there is a stronger sense of urgency, compounded by the beginning of a new year. In a way, it has the potential of a new beginning and investors are likely to look at our project with fresh eyes.Then there's Dane, the Manitoba partner who's bringing in the tax credits and some equity. I will be traveling to Winnipeg December 11 to meet with him as well as Rachel, the Eh Channel executive and some other companies as well.

The trip also allows me to visit my 86-year old mother who lives in the town I was born in many decades ago. It will be a white Christmas most certainly for me, and a rush of nostalgia from my childhood which continues to inspire and motivate me, nearly 2000 miles away in California.

They say that the person you are at seven is the person you become. At seven, I was going to movies with my parents as often as I could. Not that there was much of a choice, we had one movie theater in town, a rebuilt church hall. By 8 I was going alone. So I am the person I was at seven and I think that's a good thing.

But what about Travel Day?


While it was Black Friday for America last week, the whole week was pretty bleak for me. The Thanksgiving holiday really started the week-end before and it was pretty much impossible to talk to anyone about our movie. Even the Europeans I had pitched didn't reply and, apart from friends, I had literally no contact with the movie industry.

Christmas is the same, it begins here around December 15 and doesn't start up until the 2nd week of January.

This week I have a few calls to make and at least one meeting and possibly more. The major event of the month will be my meeting with Dane in Winnipeg as this is where we  outline our separate entities, meaning what each of us brings to the table. The contradiction there is that Dane will bring the tax credits and a letter from a bank that indicates they will be able to advance us a loan of perhaps 90% of around $300,000 of tax credits on Manitoba labor. This money is in effect, first in, as they say.

By doing this, other investors get a stronger sense of security in Travel Day. Investors notoriously dislike being the first one in and this money even comes from a major bank so it's even more solid than the investors themselves.

My duty is to offer what I can in the way of confidence by having several elements in place at roughly the same time, these being;

• A "star" name actor

• At least half my side of the budget (around $200k)

• Names of several of key creative crew (DP, Editor)

• Distributor Interest

All of these will help, but the name actor and distributor are the hardest to get. I have my work cut out. It's times like this I wonder why the hell am I even trying, now being 8 months without any pay whatsover, spending my money and time, and Shirley offering her expertise in graphics, art, conversation and just being there.

But then, what else is there to do?


After all, I missed Stoogefest this week-end, I've attended for the last 5 years and this time didn't have the time to do my annual 3 Stooges festival with my friends. It's times like these I take comfort in a pie in the face or a poke in the eye.


Don't try this at home and wish me luck.

Still interested

So far - so good.  The potential Manitoba producer, Dane, and I have spoken.  He does exist, he is real. He has a relatively new company in Manitoba and has several movies to his credit, some are Canadian and as such, rarely ever seen beyond a domestic release and a few service jobs by which a lot of Canadian producers survive by. 

These are similar to what TD could be, but more emphasis on the service as usually the movies, primarily American, have their full budget going in. Unlike me, who will have partial funding with my side bringing in 50% or so, maybe a little more and Dane coming in with 40% which includes tax credits and equity, as explained in the October 15th post.  

We had a good conversation and I reminded him that I was born and raised till the age of 12 in Manitoba and spend a lot of time there now, knowing Winnipeg quite well, having friends and cousins. 

I also wrote and worked on three movies there in 1998 with producer Steve White, one of the best producers I've ever worked with. Two of the scripts were mine, the Roswell Project (later named Roswell- Aliens Attack,( definitely not my title) and a remake of a movie I had made 12 years before which was dreadfully bad, but the new one was a little better, called Dream House, a science fiction thriller.

Dane sent me a preliminary budget, much more basic than mine (which you can see by viewing our proposal available under the Materials box) and included the potential tax credits. Out of a $1.1 cdn budget.  It's tied to the exchange rate and at present, the US dollar is taking a slam, resulting in the Canadian budget lowering.

I'm hoping that the the US dollar picks up after the first of the year and that the Canadian dollar lowers to a respectable 10-12% rate. This exchange rate can make it easier or harder for us to make our movie in Winnipeg. I offer my thoughts and then email his budget back and we decide to talk again in a week. 

Things here in LA however, seem to be less stable than before. my initial Investor who would commit the 2nd half of the budget once I found the first half, does not answer my emails. This isn't the first time as those of you who follow this blog know. He could be waiting for the actual finalization of Dane's commitment. This is normal in these partnership investments. Basically, nobody wants to dive into the pool first.  And everyone wants to see just what I can do on my own. 

It's a test.

So what do I did I do on my own?

I reached out to at least 100 different people and companies. Most of course passed, about 15 were interested and of them, 5 were interested enough to consider doing business. But I am not stopping there. While it looks good at the moment, I don't like surprises, as Initial Investor deciding on not carrying through his earlier investment. And not because of the project, but maybe he's stretched himself too far on other projects or a hundred other reasons, none of which I know. 

And all of this work is basically for free, as I am not taking a producer fee, probably a "deferred" fee, or as we in the film business call it "nothing".  Deferments are common in the film industry where the budget is so low that taking a fee would hurt the production. And since I am taking a Writer's Guild Minimum fee for low budget films, approximatly $42,000, I am one of the top money earners on our low budget of $900k US. 

So just when I think we have a good chance at getting all the money, one of our pieces seems to be falling out and I continue to search for investors. Do I know this for sure? No, but that's no reason to sit back and wait.  

AFM (American Film Market) is approaching,  1st week of November in Santa Monica. It's where distributors who buy and sell meet at a hotel on the beach and wine and dine and every room is taken up by companies as big as Paramount and Universal taking huge suites down to tiny foreign distributors in single rooms plastered with horror films and copies of American action films with Michael Madsen in them. 

Shirley and I are preparing some material to hand out to these people although I really don't like going there, it's like being at a meat convention, with movies reduced to their lowest common denominator.

But they also can help fund our movie.

"I am interested..."

 
It was an email that read simply:      

"I am interested and I would estimate we can provide through the Manitoba tax credits, and equity programs, approx 40% plus of the budget.  If you like, we can talk early next week and go the details. "

Short and sweet as they say.  Seconds before the email appeared I saw the sender's name and realized it was one of the Canadian producers who might be considering working with us.  My first feeling was that it was good. But my skepticism crept in. 

He's passing.

But something told me different.  Most companies don't bother to tell you they're passing on your project these days, they just stop communicating.  Maybe he was one of the nice ones who still has some class and wanted to tell you in person that he is passing.  I clicked on the email and as it opened I scanned the sentences for one good word, it took all of 2 seconds. 

"I am interested."

 That's all I needed, and I reread it to get the entire message.  Then I read it a third time.  We did it.  Shirley and I did it. 

We have a movie. 

With Manitoba's minimum of 40% and our initial investor's 50% it suddenly became a reality. I waited for awhile before I would tell Shirley, I wanted to be absolutely certain of what he was saying.  I remembered that Rachel the movie channel exec (Eh Channel)  had asked the producer to look at my screenplay.  I sent a package of both the proposal and the screenplay as I have done to at least 50 other people of whom some never responded and some liked it but weren't interested and some just weren't interested.  Now we had someone who was. 

I knew what he would be doing, using tax credits in Manitoba which can be as high as 65% tax credit on labor from Manitoba.  For every crewmember, actor, driver, caterer, virtually everyone  except Shirley and an American actor, we got back 65 cents on the dollar. 

I think I must have read that message a half dozen times, putting different interpretations ton it, stepping away and walking outside my place, then back again. I knew where he would get his equity, it would come from one or more of those various private and government funding agencies that abound in Canada.  I took an early lunch at Carney's, a railroad car where I would celebrate minor victories with a split &  grilled red hot and a side of chili fries, best in the valley. 

Remember one of my rules;  reward yourself often.


This changed everything. We now, in theory, had the budget for Travel Day.  And if the exchange rate favored the U.S., it could conceivably mean our American money would be worth maybe 14 cents more on the dollar.  Which meant that $400,000 US would be worth $464,000, almost half a million if the U.S. dollar doesn't fall anymore.  

If we still had that $400k.

After my excitement died down I began to analyze exactly where we were.  On paper it looked damn good.  But I had emailed my $400k man a few weeks ago and he had not returned our email. My friend who knows him said he sometimes does that.  Privately it worried me.  I never told Shirley or anyone.  I fell into that mode of "better no news than bad news" when it came to the $400k man.   I re-read his email, particularly one phrase;  "I can probably find the rest". 

What did that imply; will he do it? 
Will he consider it? Is he going to DO IT??

You're probably wondering why I so quickly left behind the good news to dwell more on the possibility of bad news.  Well, I'm not one to play with pop psychology and thinking positive or visualizing my goals, I'm a realist mixed in with a dreamer and an eternal optimist, although sometimes I use pessimism as a cover for optimism. Expect the worst and you won't be disappointed.


I majored in Psychology (encouraged by the lovely Crystal, a grad student four years older than me)  at Henry Ford College and was set to transfer to U. of Detroit.  But I dropped out and into the world of television but always joked that I knew enough about psychology to tell everyone else what their problem was.  So while everything sounded spectacular, there was just one hitch...

One word: experience. 

This is almost exactly what happened with my producer on Emperor of Mars after nearly one year of waiting to fund that movie for $5 million.  Since I was writer and director I was not directly involved in the financing of Emperor.  Like Shirley is now, I was the one who waited for the good news that we have our funding.  We had a similar deal, the majority would come from the U.S. and the balance would come from tax incentives in Alberta (Alberta is the only province to call it's credits "incentives" as it's the most American of provinces and refuses to use the word "tax" anything.)

And the funding came close until, and this is something I can only speculate on, the U.S money fell out.  And the previous year Emperor was nearly funded when the financing fell through again. In fact, Emperor had been the victim of 4 attempts;  one with an Academy winning director and three times with me.  And none of those had any involvement in the funding stage from me.  That's one of the reasons why I am producing Travel Day. 

Because I want to know everything that happens on this movie. 

Every detail from the proposal on to the release.  Now I was somewhat in the same position, except this time I was the producer,  I was the one who knew what was going on, hopefully to do what needed to be done and finally, to get this movie made.  Sensing a backup plan, I had already contacted several other potential investors and Hank, the presales producer who could presell to Italy and France, which could make up the difference. 

But at the end of the day, I was going to relax in the comfort of acceptance.  And I would definitely call Manitoba next week.  I called Shirley to tell her rather than email it.  She was totally excited and said she had a feeling we would be doing this in Canada.  And it took us less than 3 months to get here. But I didn't feel we were there yet,  that there is still a lot of work to make everything go right and that there will be bumps ahead. Big ones.

Regardless, it was a good day for us.

Where are we now?

Still recovering from the positive news of making Travel Day with Canadian tax credits and awaiting any news from the people Rachel contacted who might co-produce with me.  This amounts to the usual fears and apprehension that writers, producers and actors share, maybe directors too. Are the forces going to approve of us, will they like us (in my case, the script), and 100 reasons why they should.

Countered by 101 reasons why they shouldn't.

Rejection, as I've posted before is a daily thing for anyone in the film business, and judged by others, often of less ability.  Actors can get or lose a part just because of how they look, writers can fall prey to envious readers who can't write but who want to punish those who can by giving a bad reader's report.  After all I had 9 original screenplays produced but 24 still on the shelf, all rejected.

There is a lot of envy in this business because so much of it is a lottery. Take the cast of Friends, that hugely successful series from the early 90's.  None of the actors are particularly talented, but for some reason they seemed to click with each other and more importantly, with the audience.  In other words, they won the lottery.  On their own, they're quite unremarkable, as evidenced by their lame efforts at movies.

Joke in LA is "what's the difference between Jennifer Aniston's movies?"

Answer is: "Different titles." 

In the meantime, I studied the tax credit system in Manitoba, where this might be filmed if it all falls together (cup half empty??).  It's not all that difficult as I compared the other provinces incentives.  My main concern is the general lack of good actors in the city, considering that it's relatively small, around 700,000 compared to Los Angeles 10 million. 

And many of those are Canadians who left Canada to be successful here.  And not to belittle Manitoba or any of the other provinces, there simply isn't enough choice in the talent area which means we would have to cast in Toronto and Vancouver.  I remember casting once in Calgary with a Toronto director who privately lamented to me "this is like the Gong Show" relating to a now-defunct game show of the 70's.

And that's not to say LA has all great actors, just more of a choice of the good ones.  Of course, some Canadians will label me as betraying Canadian talent, but the truth is, most of the best Canadian actors are in L.A.  Michael J. Fox once said that in Canada he would do crazy things and people would look at him, in Los Angeles they paid him.

There is one exception though, and that is Quebec.

The French-Canadians consistently make good, if not great movies, one even won an Academy award for best foreign film, Barbarians at the Gate, by Denys Arcand who consistently makes good movies.  I've always thought that it's because the French Canadians have a strong identity and culture whereas English Canada struggles to be somewhere in between England and the U.S. 

Nonetheless I still constantly remind my American friends of Canadian actors, as in "Keifer Sutherland is Canadian, so is Michael Cera (Napoleon Dynamite), Ellen Page, William Shatner, Leslie Neilson, Jim Carrey" and dozens others.  Some people think it indicates that general lack of self esteem Canadians seem to ooze, always feeling it necessary to validate ourselves to our big rich cousin America.  It probably is, but we all continue doing it.

And that's not including the hundreds of Canadians that flow to LA during pilot season in early January in hopes of grabbing a part in a series. There's even specific motels that are filled with Canadians, places like the Highland Gardens on Franklin in the heart of Hollywood, where a documentary was made on aspiring actors and the majority staying there were Canadian.

But how will it affect Travel Day?

With the exception of the "star", the leading role of Katherine, we will cast in Canada, it means more expense and of course, travel and accommodation and of course, per diem, expense money given to anyone from out of town,crew can get around $400 a week for meals and anything else they can get for that much money.  And stars can get whatever they negotiate, meaning a lot more than a paltry $400 a week. And remember hotel costs are extra and meals are usually eaten on the set for free.

The great part of filming in LA is that you simply pick up the actor/star at their home, drive them back at the end of the day. No per diems, no hotel expenses, no first class airfares.  All this will come out of the budget and the way the American dollar is sinking (today 93.48 cents Cdn) the Canadian dollar will be worth the same by February. This means that the U.S. investor's money won't be worth that much more and would cause the budget to go lower even as costs for airfares, etc. remains the same or higher.

So now I have to do a new budget to reflect the exchange rates. That's at least 2 days of work. All for nothing of course.  We don't make money until the money is there.  All I am doing now and for the last 3 months is gratis, free.  Working a good 8 hours a day in the hopes we get the money. Same as Shirley. 

As with many things, a new opportunity presents a few more hitches that mean re-adjusting the budget and the original vision. There are 2 schools here, it can't be done right if it's not what you originally set out to do, meaning location, actors you wanted, etc.

Or you roll your sleeves up and make it work so that you still make the movie you wanted to do.

If  it all works out. Notice a similar theme you hear from me?  

And I'm optimistic.



(Next: The sad state of the film industry)

Oh Canada?

Well, it's a big day. You might remember that screenwriter who became a development executive for a pay channel in Canada (see Distributors post). We'll call her Rachel.  And her company is the Eh Movie Channel, eh? I had given her a copy of TD to read.  Well, she called back. 

She liked it. 

She really liked it.

And she wanted to talk to me about it.  She was considering putting it into a development deal with Eh and provide us with a little bit of money for a rewrite and maybe some casting.  I was silent for what seemed forever and finally managed to say, as calm as I could, "well, that sounds nice".  And there's more. 

But first a primer on how it works in Canada.

Shirley and I had discussed the possibility of Canada as I knew the system there quite well, having been involved in the complex funding process that Canadian filmmakers have coped with, and in the last 15 years, many American films have taken advantage of with incredible tax credits. 

The Canadian system is based on this premise: there is no private money available to make movies. 

They had a 100% tax shelter for 10 years, but greedy accountants and lawyers caused it to end. Now it's a web of funding agencies, some private, some federal and some provincial.
Because that's the only way Canadians could ever get money to make their movies. 

The Feds offer a government investment of 50% and one hell of a paper chase. A large portion of funding comes from private broadcasters, networks and distributors and this is mostly because the Feds force them to take some of their profits from the American shows and movies they run (and make money with) and put it back into the fragile Canadian film industry. To the tune of  $80 million.

I like to call it guilt money, it's used for for script development, film development and equity financing. Many Canadian filmmakers have to patch a variety of different fund agencies together, each with different criteria. Slow and frustrating, but they eventually get to make their movie.

And we're not even talking tax credits yet.

But you have to be Canadian.  So now you're saying, "sure Jim, you might get some of that $$ but what about us. That's an unfair advantage.  Well, not really.  There is another way, and it concerns the notoriously generous Canadian tax credits that many states envy and dislike.

Tax credits can reach as high as 65% in some cases, and this is usually in labor costs. You spend $1 million on local labor and you get almost $650,000 back.  Nice.  Of course you might be spending millions on other costs but still, that's a nice check to get back.  And this works for anyone in Canada or from anywhere in the world.  You don't have to be Canadian, but you have to incorporate your production company in whichever province you choose to film in.  Some places like Alberta offer around 25% on all money spent there while others offer tax credits on labor. 

But it's not as restrictive as you might think.  You still have a say and it's still your movie although the copyright remains in Canada.  And that's really not an issue as it doesn't matter where the copyright sits.  Brokeback Mountain was done with friends of mine in Alberta who provided the tax/incentive money. They got Executive Producer credits, show up once and then for the wrap party.  Capote was also done this way, as are a lot of US movies. 

So where does Travel Day fit?

Somewhere between the two methods above.  Ironically TD was intended to be filmed in Alberta among the Rockies, and then we considered LA and Big Bear or maybe around Lone Pine in the Sierras.  It's set in open prairie and mountain foothills.  And since I'm Canadian I qualify for Cancom funding.  This is an extra 15% or so but some Canadian content rules fall into place.  There are 10 positions in which Americans or other foreign people can only to to 4 positions, all creative including writer, actor, director, producer,DP, editor, Production designer and a few others.  So out of that you need to have at least 6 points going to Canadians.

Rachel had one more suggestion.  More?

She offered to call local producers and suggest they look at our project.  Why?  Because they could come in with the labor tax credits and some equity and provide the crew and administration costs.  It would mean that we would have to follow certain content restrictions but it could work quite easily.   And having Rachel call them would obviously mean more than if I did.  After all, they get money from hers and other Canadian pay channels. But they had to like the project.  

And that's where we sit today.

I really never expected this to happen, I didn't dare dream that it could happen. Three months after we started this project, we had, in theory, and I stress "in theory", most of the budget. With the 50% from the original US exec producer and an equal amount from a Canadian producer we could make Travel Day.  But right now it's still a work in progress.  There is paperwork to do,  and I haven't heard from the LA funder even after I emailed him.

We're not home yet.

Is it easier?  Yes.  

Do we have a better chance at actually getting this movie made?

Yes. 

But until I'm on the set watching Shirley do her first shot with a film crew and film in the camera, I'm not going to believe it.

For now, maybe a little bottle of champagne.  Or a Molson.

Where do you find money?

One of the questions asked most, is "where do you look for money?". 

The easiest answer is "find someone who has lots".

The harder answer is to look everywhere you possibly can. 

This post is probably the most frustrating and yet necessary topic.  Finding money.  It's so tough that it will spill over into two posts as it's pretty much how anyone can find money for their movie. When I say anyone, I mean anyone who's determined to spend weeks and months doing this, compiling lists, emailing dozens of people (I am ever so thankful for email and cut/paste which makes this job so much easier than calling by phone or writing individual letters. 

While I use mostly real names in my posts, probably 95% are actual names, I won't do it when it comes to my investors as I respect their privacy as would you.  But I will tell you what they are, and what they do, because that is not really anything new.  They can be the people next door, or relatives, or the local guy who owns 2 Subway franchises, or your accountant. 

All of them could surprise you when you say you're looking for money for a movie.  Our movie is budgeted at $902,000 and generally these types of investors tend to be more uncommon in that many are from outside the film industry.  But they are there, regardless.

I start with 10 questions;

1. Who has money they want to invest?
2. Who wants to invest in a movie?
3.  Who do I know that has money?
4.  Who do I know who can refer me to somebody who has money?
5.  Who else has money they want to invest... into a movie?
6. How can I get to them?
7.  Can they refer me to their friends who have money?
8.  What tax credits and incentives are available.
9.  What do I need to get people to want to give me money?
10. At what point do I start sounding like a maniac?
    

Now let's look at each of these a little closer.

Who has money to invest? Well, people who have a lot of it. You're saying, yeah, but I don't know a lot of rich people.  

The easiest money to get, of course, is family money.  Many of the indie films made for less than $2 million are funded by mom and dad and uncle and grandfather.  Yes, $2 million movies have been funded by family. Not my family, that's for sure.  My mom offered $500 but I couldn't take it. 

Then there's private investors, usually businessmen, like accountants, lawyers, dentists, doctors, restaurant owners, shopping mall magnates, car dealers,  churches, political groups,  oilmen and women, and just about anybody else.  One woman read every magazine she could find where there were stories of successful women. Then she wrote to each one of them, more than a hundred or so.  And she found $600,000 to make her movie.

Now even I wouldn't have thought of that.  And don't laugh, all of the people I mention above have invested in movies. 

But why?

This is where it gets interesting.  Financing a movie outside the studio system is harder then hell, but at the same time, is a lot easier in some ways.  Mainly that these investors pretty much let you do what you want with the artistic side of the movie. You even get the much obsessed "final cut".  In fact you probably will get to edit your movie how you see it.  Because they don't really know how to edit films and also they have given you their trust and faith in that you will make the movie you pitched to them.

That still doesn't answer the question why they would invest in your movie - or mine.  When I made my little horror film Ghostkeeper in 1980, I had 6 investors, mostly oilmen and all individuals whose abilities to make money were outstanding. They each wrote a check for around $100,000, giving us about $650,000 in 1980 money (maybe about $1.2 mil today). And the checks were just like mine, pictures of bears or mountains or lakes on them. 

Okay, the big deal here is that they had a 100% tax shelter credit, meaning that they could write it off their taxes.  But there were better investments and besides, if the movie made money, they still had to pay taxes on that.  So why did they invest?

Because they wanted to be part of a movie. 

They could tell their friends they had put money into a movie.  In fact, one of them even joined the crew and drove vehicles,  shoveled snow and played poker.  And he was a millionaire.  There is something there that I never quite understood, maybe it's as simple as being part of a movie, "like those Hollywood guys" one told me.  

I even told them that most movies never make money, that their chance of making money was remote at best. They didn't care, this was a movie, and it would always be around. Movies stay forever, you still see movies from 1910 on TV.  And I'm not being hard on them, or certainly not mocking them.  They know perfectly well that's why they invest in movies. And they're happy with it. And Ghostkeeper made money in spite of bad reviews.  But recently 3 reviews have shown up on IMDB, regarding it as "a lost gem". 

See. If you wait long enough, someone will say something nice about you.

There's other kinds of investors as well.

These are the professional investors, these include bankers, stock brokers and investment counselors.  Hedge funds were a boon to the movie industry and hundreds of features, even big ones with budgets of $50-100 million were done with hedge money.  Mostly it was a bunch of clever producers who made dozens of $5-10 million dollar movies with big stars like Kevin Costner, Kurt Russell, Robert DeNiro, Al Pacino and many others.  

Why would they make a $10 million movie when that was usually their salary on bigger ones?  Because they would take a few million, the money guys would take their share and there would be maybe $5 million left to make the movie.  The screenplays were usually action movies which sold well in the rest of the world and the producers presold them on the big names.  In fact many of those movies bombed in the US, but made profits overseas.

Bankers of course are the hardest, unless its for derivatives,  you know, those bets they made with your money and then lost it all and nearly caused America to fall apart financially. They have loaned money, but it is primarily for people who already have the money. Stockbrokers are there as well, Keith Gordon, a former actor and now director has a project with Ethan Hawke in which they are selling stocks to raise the funding. But this requires a public offering which can cost a lot of money, their budget is around $8 million so they can afford it. 

But most of us are pretty much stuck to the first method so I'm going to focus more on that for the next post Monday.

Have a good weekend and the next time you're at your dentist's, ask them if they've ever invested in a movie, or if they know anyone who has.

Or if they want to now.  You never know.

(Next: Where do you find the money Pt 2)