Reflections on 2008 and Top 10 Favorite Panel Discussions and Q&As

2008 saw the birth of the One-on-One Q&A, where I interviewed a number of filmmakers including Lucia Small and Ed Pincus (The Axe in the Attic), Leah Meyerhoff (Unicorns), Paul Krik (Able Danger), Fritz Donnelly (To the Hills 2), Phillip Van (Come Wander With Me), Sue Williams (Young & Restless in China), Daniel Robin (My Olympic Summer), Josh Koury (We Are Wizards), Lucía Gajá (My Life Inside), Tambay Obenson (Beautiful Things), Dawn Scibilia and Alan Cooke (Home), Richard LeMay & Jason Brown (Whirlwind), and Paul Lovelace & Sam Douglas (The Holy Modal Rounders: Bound to Lose).

New to the contributing notetaker team was Erin Scherer (Are You From Bingo?), who helped me tremendously at South by Southwest, and contributions by aliases Majimafia and Ultradevotion. AMPeters and Jennifer Warren were back with more notes this year, as well. I also want to thank my friends Adolfo Doring and Amanda Zackem, whose film Blind Spot played at the Woodstock Film Festival, for taking me to the mansion on top of the hill :)

And before I forget, thanks to IndieGoGo for making The Film Panel Notetaker one of its resources, to indieWIRE for listing it as one of their Blogs They Love, Infincine and any other blog or website that linked to here.

I made my first trip to Austin, Texas for SXSW and a return trip to Silver Spring, Maryland for Silverdocs, while also staying on the home front for the New Directors, New Films, Tribeca Film Festival, New York Film Festival, IFP’s Independent Filmmaker Conference and Woodstock Film Festival. I also made appearances at a number of very-well programmed film series, screenings, and discussions including Stranger Than Fiction, Rooftop Films, the Museum of the Moving Image, and MoMA. And in March, I was very fortunate to attend the first ever Cinema Eye Honors for nonfiction film presented by Indiepix.

And I cannot close this year off without mentioning fellow indie film blogger and DIY filmmaker extraordinaire Sujewa Ekanyake’s documentary Indie Film Blogger Road Trip, in which Sujewa generously interviews me and several other indie film bloggers about the rise and somewhat unseen future of indie film blogs. Just trying to see how many times I could put the phrase ‘indie film blogs’ in one paragraph :)

Like last year, it was very hard for me to narrow it down to just 10, as there were so many interesting and wonderful conversations from which to choose. (If you would like to share some of your favorite panel discussions of 2008, please leave a comment.) I don’t know if it’s a coincidence or just my love of non-fiction films, but most of the Top 10 has something to do in one way or another with documentaries. But much of my underlying reasoning can really be attuned to the following criteria: Information and material that I learned and haven’t seen before at panel discussions, diversity in the members on the panels, great moderators, the way in which the panel or discussion was presented, and the ability to entertain, enlighten, and inspire my readers…as well as those that made me laugh my ass off...you know who you are :)

Here’s hoping for more of these wonderful attributes…as well as new surprises…in the year to come.

#1
A Tribute to St. Clair Bourne

Museum of the Moving Image
Astoria, NY

February 10, 2008
This was a very lively discussion that introduced me to the work of the late St. Clair Bourne, who produced and directed many documentaries about prominent figures in African American culture and history including Paul Robeson, John Henrik Clarke, Gordon Parks, and Langston Hughes. Moderated with much respect and appreciation for Bourne and his work, Warrington Hudlin led a great mix of scholars and critics. Nonso Christian Ugbode also presented a clip montage that he edited of Bourne’s films. That same montage would be screened a month later during a tribute to Bourne during the first annual Cinema Eye Honors, which leads into the perfect segway for my #2 pick…

#2
Cinema Eye Honors Roundtable Discussion
New York, NY
March 18, 2008
To my surprise and delight, halfway through the ceremony for the Cinema Eye Honors, co-chair Thom Powers gathered to the stage four directors whose films were nominated for awards that evening including Alex Gibney (Taxi to the Darkside), Esther B. Robinson (A Walk Into the Sea: Danny Williams and the Warhol Factory), Jason Kohn (Manda Bala) and Pernille Rose Grønkjær (The Monastery: Mr. Vig and the Nun) for a roundtable discussion. While I did kvetch about the lack of light in the seating area for me to see my own notes I was taking, the whole experience of it all trumps that, and I therefore bestow #2 to this very clever and might I say daring idea to break up an award show with a discussion with its honorees.

#3
Stanley Nelson: History in the Making
SXSW Film Conference & Festival
Austin, Texas

March 9, 2008

Stanley Nelson is one of my favorite historical documentary filmmakers. Not only did he show clips from a few of his docs (Jonestown: The Life and Death of Peoples Temple, The Murder of Emmett Till), he also screened a sneak peek clip of his upcoming film Wounded Knee that is now an official selection of the 2009 Sundance Film Festival. It was the first time Nelson showed this clip to the public. I noted in my notes that I often like panels that include film clips because they bring a lot of perspective into the discussion.

#4
Behind the Screens - Under Our Skin
Tribeca Film Festival

New York, NY

April 27, 2008
While I attended several filmmaker conversations myself at this year’s Tribeca Film Festival, the notes provided by contributing notetaker AMPeters helped this particular discussion on the documentary Under Our Skin make it to #4. Peters’ notes solicited the most comments than any other notes on The Film Panel Notetaker this year. It was clear by the subject matter of the film, lyme disease, and the information presented in her notes that people were clearly affected.

#5
My Olympic Summer
New Directors/New Films

New York, NY

March 30, 2008
The Q&A with My Olympic Summer director Daniel Robin at New Directors, New Films is clearly an example of fiction blurring the lines of non-fiction, a topic addressed by many a film blogger this past year. A re-telling of the events of the 1972 Munich Olympics with real home movies that are manipulated into what I felt to be an artitistic and compelling story, the reaction by audience members during the Q&A who thought it was all real, only to learn that it was non-fiction, seemed to shock and irk many of them, which made for a tense, yet very important discussion.

#6
Acting Out
NewFest
June 14, 2008
Notetaking newcomer Ultradevotion provided notes from the Acting Out panel featuring out actors and filmmakers such as Heather Matarazzo. 2008 was the first year The Film Panel Notetaker attended NewFest, and ultimately a milestone year for the LGBT community as same sex marriages were declared consitutional in the state of Califoria, but then upsettlingly repealed in November when Proposition 8 received the majority vote, which has since then lead to nationwide protests.

#7
No Borders Case Study with John Hadity

Independent Film Week

Wednesday, September 17, 2008
New York, NY
2008 marked my 8th visit to IFP’s annual Filmmaker Conference (fka IFP Market & Conference), but the first year I was invited to attend a seminar that was not a part of the conference itself, but rather the No Borders International Co-Production section. That seminar was a rather interesting and informative talk on single picture financing presented by finance guru John Hadity.

#8
Shooting in India
Mahindra Indo-American Arts Council (MIAAC) Film Festival

New York, NY

November 8, 2008
This was also my first time at the MIAAC Film Festival and since I’ve never heard people talk about what it’s like to shoot a movie in India before, my interests were immediately sparked. Parvez Sharma (A Jihad for Love) did a nice job moderating a group of panelists who were either from India and shot a movie in India or weren’t from India and shot a movie in India. Either way, all had interesting stories to share.

#9
Herb and Dorothy
Silverdocs AFI/Discovery Channel Documentary Festival

Silver Spring, MD
June 21, 2008
Herb and Dorothy the movie was quite a nice change of pace with its light-hearted subject matter compared to more hard-hitting, yet equally well-made documentaries I saw at Silverdocs. So it was even nicer a treat to see Herb and Dorothy the people make an appearance at the Q&A after the screening along with the director Megumi Sasaki.

#10
Actors Dialogue: Mary Stuart Masterson & Melissa Leo
2008 Woodstock Film Festival

October 5, 2009

Woodstock, NY
Martha Frankel nearly brought me to tears with laughter for a second straight year in a row with her casual yet very-well researched moderation for a conversation with actresses Mary Stuart Masterson and Melissa Leo at the Woodstock Film Festival. Hey, Martha…stop being so funny so I can let other panels have a chance to be on here next year, will ya?

Honorary #11
Here's to Life: A 40th Anniversary Tribute to One Life to Live

New York, NY

June 10, 2008
I try not to veer off topic too much on The Film Panel Notetaker, but how can I leave out one of my very favorite panels of the year? Thanks again to Ultradevotion for her very colorful commentary!

No Borders Case Study with John Hadity - Sept. 17, 2008

No Borders Case Study with John Hadity
Independent Film Week
Wednesday, September 17, 2008
FIT – Katie Murphy Amphitheater – New York, NY

Last Wednesday at Independent Film Week, No Borders International Co-Production Market presented a Case Study on Single Picture Financing with John Hadity, President and CEO of Hadity & Associates, Inc., a consultancy firm that specializes in risk management and production finance for film and television. I have included the main outline of that presentation below with highlights of the transcription of Hadity's discussion. I found the discussion and presentation to be very informative. While a lot of information to ingest, this seems to be a very handy “how to” resource for producers looking for multiple ways to finance their films.

Before Hadity began his presentation, he said, “I thought it would be important to have a conversation with you about what’s happening right now out there in the finance world. With all the news last week, everything is in the toilet. I’m going to give you a bit of an overview so you understand when you are talking to finance people, you understand what’s in their head and what they don’t want to hear and what they do want to hear. I would say 99% of the time, you’re going to hear ‘no.’ It’s important that you understand why they’re saying things like that and how maybe you can mitigate your own risk before you go into these meetings. The second part is a break down of a case study of an alternative way of financing the film.”

Part 1 – Industry Overview

Health of the Industry
* These numbers are for 2006. Hadity noted that he has not yet seen all the numbers for 2007

“Box office is fairly in the same place. Theater admission down, although the number of releases have certainly gone up. This year, there were over 5,000 entries to Sundance. 10 years ago there were 500. There were a lot of movies being made and fighting to get on screen and fighting to stay on screen for over two weeks. There’s a lot of competition out there. But still, this is a very healthy industry. This is an industry an industry that’s not correlated to any asset class. When the economy is in the toilet and people don’t have money, they still go to the movies. It’s because they can’t afford a new car. They can’t afford a new house, but they can take their families to the movies."

Studio Concerns

“To give you a snapshot of what was happening in 2004/2005…what happened back then had a severe effect on independent producers and production companies that tried to finance their films. Studio movies cost about $100M. Studios were very concerned about these escalating costs. All of these studios have other businesses that they’re involved with and to tie up $100M at the time in cash, it was really crippled. They still needed to feed the distribution pipeline that was in fact the lifeblood. But they did see that all of these revenue streams would change them. In Variety or The Hollywood Reporter, you’d see how long or short a period of time films are actually on the screen, unless they are absolute break out successes. There’s an incredible amount of energy put into finding other revenue streams or enhancing other revenue streams in pictures. By far the priority is to downsize any kind of risk."

- Escalating film costs
- Cash Management
- Need to continue to feed distribution pipeline
- Revenue Streams are changing

*Pay TV deals are diminishing

*Windows are getting shorter
- Increase in piracy
- Manage downside risk

In the Financing World

“At the same time in the financing world, there was a huge growth in private capital. Hedge funds, most of the time, really didn’t hedge anything. Since 1990-2005, there’s been about a 20% growth in private wealth. There was...a year ago, almost one and half trillion dollars under management. Basically what was happening in the hedge fund world…the private capital world…is people needed a lot of cash. We have to take a very small part of our patch and invest it into something that is high risk/high reward. Let’s say 5%. There is no magic number. But most mandates were probably around 5%. Take that and put it into a high-risk category business…film got chosen. Why…first of all it’s sexy. The first thing whenever I’ve gone and stayed in a room with people with private capital that were interested in investing in a slate of movies or with studio slate deal were like, how many tickets can I get to the premiere? There are hedge funds, private capital, and banks that are comfortable with what’s called the Monte Carlo method…literally a software program that enables a financial analyst to role the dice how ever many times you want. How many times can you role the dice and lose? The Monte Carlo method is actually used to evaluate a number of slate deals that are trying to get financed by studios, specialty labels and production companies.”

- Influx of Capital
*Private Equity Growth since 2003 = $580 billion

* 20% hedge fund growth since 1990

* $1.4 trillion under management today
- Portfolio Diversification
*New asset classes
*High risk/high reward
*Comfort with statistical analyses (Monte Carlo method)
*Gap and Super Gap opportunities
*Sexy business

Recent Transactions (Recently Completed Film Deals) – 1st Page

“The first deal was August of 2004 with Paramount…a $300M deal to finance 26 films over a 5-7 year period. The arrangement on these deals, every single major investment bank is involved. If they’re not the arrangers, even the Weinstein Company deal with Goldman Sachs was a billion dollars. You have to understand that Goldman Sachs did not underwrite a billion dollars. There’s an equity component to these deals and there’s a debt component to these deals. Typically the debt in these deals is syndicated out to a number of banks. I promise you, every single bank that you’ve ever heard of has participated in…at this point it was $10.6 billion.”

Recent Transactions (Recently Completed Film Deals) – 2nd Page

“It’s over $15 billion now that has been invested into our world. And I heard someone say at dinner recently that they thought it’s more like $24-$26 billion. These deals started back in 2004, and the post-mortem is actually just starting on these deals. A lot of people that participated in these deals, especially on the debt side, are less than pleased with the results they’re seeing. The numbers that they were talking about and throwing around to each other around board rooms and conference room tables were more like 14%/16%/18%/22% returns. I think the first numbers that were actually publicly released was 4%. So people are not very happy with the performance of these deals so they are actually re-negotiating some of these deals or scrambling for a way to refinance them. Couple that with the credit crisis that’s happening right now and one thing you really need to be aware of is a banker or a hedge fund manager or investment arranger is that you’re talking to sales people. These people are in charge of bringing deals in…they’re called originators…their job is to bring in investment opportunities to financial institutions. They are not the people who are going to approve the deal. They’re going to sit and listen to your deal and tell you that it has a lot of potential, but at the end of the day, the person who’s going to make a decision is going to be a credit desk. The person behind that credit desk is going to be looking at this investment from a risk management perspective asking...What if these movies don’t perform?”

Producer Driven Financing Transactions

“There were a number of very high-brow independents that were successful in getting their slates financed. That still happens. We’re still reading about that, but from a credit desk perspective…somebody at a bank isn’t going to want to hear you have 10 really good stories. Somebody at a bank is going to want to have proof that you have a revenue stream somewhere behind you that can support the kind of money that you want to borrow from a bank. The larger independents are pretty much well taken care of. The real challenge here is to get the thousands of independent producers out there that are trying to get their movies financed on a one-off basis typically to get them their financing.”

Indy Film (“One-Off Financing)

Studio Financed
- Advantages – Money already there; Negotiating Muscle; Guaranteed Distribution; Worldwide Exposure
- Disadvantages – Lose Creative Control; Inflated Budget; Pushed Participation; Gun for Hire

Independently Financed
- Advantages – Maintain Creative Control; Controlled Costs; Better Odds for Participation; You are your own boss
- Disadvantages – Need to fundraise; Weak negotiating position; Guaranteed Distribution unlikely; Exposure Uncertain

“When I crossed over to the light side…I remember my first experience in financing a one-off picture…it was around $60M. The studio that had intended to distribute it actually budgeted the movie at $130M. The producer of mine loves to tell the story…the visual effects house that we would have used…was about 19x cheaper than using the studio’s VFX house…the studio said it’s okay, it’s soft money.”

Financing Vehicles

“Soft money is probably the number one way to finance a portion of your movie. It is absolutely irresponsible to make a movie today in a territory or in a state or in a city that does not offer an incentive, unless it’s your money. If it’s your money, you can do whatever you want. If you’re using someone else’s money to make a movie, you should not be filming in California. You should not be filming in states that do not offer incentives. This is free money. They’re incentivizing for you to come and spend money there. They’re rewarding you for dumping money into their infrastructure. You’re creating jobs. You are helping their economic development. This is free money you should take advantage of. I personally will not help people finance a movie that’s not being filmed in an area without incentives.”

Soft Money (“Incentives”) – 1st Page

“It’s really important to understand the nature of the incentive you’re chasing, because you don’t want to go there…spend a lot of money and then be left at the alter. There are a lot of people out there who know how to navigate through these incentives. It’s the film commissioner’s responsibility as well to be able to guide you through all of these resources…Any economic development person will take a meeting with you if you say the words, ‘I will create jobs.’”

- Refundable
- Transferable
- Rebates/Grants
- Up Front/Backend Production Funding

Soft Money (“Incentives”) – 2nd Page

- Best Practices

Soft Money (“Incentives”) – 3rd Page

- Web Access Tools

Production Incentives
- Domestic & International – http://www.productiontaxincentives.com/
- Canada – www.canadafilmcapital.com/taxcredit/index.html

Film Commissions
- Worldwide – http://www.afci.org/

Co-Financing Partners

“Understand that whatever percentage of the budget they’re going to put up, they’re going to want that percentage of everything that happens on the back end coming back to them. Partnerships are not about free money…now it really is about finding a partner who wants to share in your reward.”

- Studios
- Distributors
- Post Facilities
- Production Companies
- Passive Equity Investors
- Film or Media Funds
- Integrated Marketeers
- Brand/Rights Sharers
- Etc.

- Typical pro rate Scenario: % Financing = % Ownership

Production Loans

“This has a direct effect to all of those $15-$24 million worth of deals. There are still banks out there that will deduct the money, but their capacity for risk is substantially less than it used to be. You used to be able to walk into a bank telling your story and creating a very good picture about the potential profitability of your movie, and the bank would…once they felt comfortable…the bank would probably take risks that they just cannot make today. All of these loans are collateralized…now more than ever, self-bonding is not an option. You will have to get a completion bond on your film.”

Foreign Pre-Sales

“You can find co-financing partners in foreign sales agents, foreign sales companies and in distributors of the foreign territories. You don’t make a decision to make a movie without talking to foreign sales people. You shouldn’t go out there and make a movie without having a conversation with somebody somewhere that’s an expert in foreign sales…what kind of currency does this film have in the rest of the world outside of the United States? They can certainly tell you that American comedies are very challenged to travel abroad. Because of that, it’s going to help you to cast a movie with somebody that does have currency in a foreign market to minimize the risk that your comedy isn’t going to travel well abroad.”

Negative Pick-Up

“Negative pick-ups are pretty hard to come by unless you have somebody pretty extraordinary attached to the budget or it’s just a great story that a distributor wants his hand on. The deal is really simple…the money comes from a bank. You’ve got a producer and a distributor. The bank agrees to provide a loan to the production, the production agrees to make the movie and deliver it to the distributor. And the distributor is going to pay off the bank loan. A letter of intent nowadays means absolutely nothing. It is really a lovely thing to have…never take a letter of intent into a financial institution because it really carries no weight.”

Gap, Mezzanine, and Private Equity Financing

“When you look at investments in movies, equity is cash. It’s the riskiest money out there. People who make an equity investment in your film are entitled to a much better reward. They sit behind everybody else back with you, but they’re going to get a higher return. They’re paid last, but they hold a higher reward than the lender will get.”

- GAP – Last in, first out. Secured against foreign sales. (est. ROI 12-14%)
- MEZZ – Sits behind GAP. Secured against some part of the revenue stream. (est. ROI 18-22%)
- EQUITY – Sits behind Mezz. First in, last out; Entirely performance driven. (est. ROI mid-20s to mid-30s %)

Integrated Marketing

“Integrated marketing has become an incredible buzz word…it’s what we used to call product placement, but it’s much bigger. These deals are incredibly difficult to put together and to use as cash. More often than not, these integrated marketing deals are marketing support for the movie. They’re not going to give you cash up front to use to cover your production. They’re very rare and often involve conversations at a corporate level that you will not be able to have. I would always recommend that you first look at the kind of marketing support that you can get for the release of the film and that might actually help you go and raise the P&A money. With a lot of these integrated marketing deals, you don’t really get the majority of the cash until your partner can look at the movie.”

Part 2 – Financing a Single Picture

Hypothetical

- Assumptions: $5M budget, UK Production, Bollywood actors, post in UK, American producer/director/writer/

$5M (100%) Budget
-1.25 (25%) UK Tax Incentives
-1.5M (30%) UK Tax Incentives
-200K (4%) UK Post & VFX (equity co-producer)
-800K (16%) UK rights (presale)
-200K (4%) India/Pakistan/Sri Lanka rights (presale)
-1.05M (21%) Equity/GAP
$0 (0%)

UK Tax Incentive

- UK Spend = $5M
- UK Tax Incentive = 25% of UK spend
- UK Benefit is $5M x 25% = $1.25M

Equity Co-Producer

- Post-Production budget = $1.5M
- Offer post facility co-producer credit & 30% revenue stream for $1.5M
- Benefits to co-producer: Increased visibility, workflow, revenue stream
- Will co-producer cashflow the UK tax incentive for a fee?

UK Film Council

- Grant Application eligibility due to UK content
- Usually capped, but each project is treated individually
- Benefits to Film Council: Increased visibility, supports inward investment and economic development, creates local jobs

Foreign Presales

- Presale of territories
- Need foreign sales agent
- Need foreign sales estimates

Equity/Gap/Mezz

- Leverage foreign sales estimated for unsold territories as collateral
- Only use bank-approved foreign sales agents
- Angel investors are the hardest thing to find

Other Considerations

“Any piece can fall out at any given time.”

- Script
- Chain-of-title
- Reasonable budget expectation
- Corporate set-up and compliance
- Letters of intent
- Completion bond
- Production Insurance
- Payroll
- Banking
- Financing reporting
- Delivery
- Distribution/Sales