Tag Archives: Filmmaking

Why people invest in entertainment

Every week, I speak with producers developing their film or theatrical projects who struggle with the big challenge: finding the financing. In many cases, they've come to me as an entertainment lawyer, thinking I have the magic solution. Sadly, I don't. In fact, most film and theatrical attorneys steer clear of helping clients find the money, focusing instead on the deal structures needed to lock-in the financing, once the funding source is identified.

As often as not, these folks are looking for the bulk of the project's funding to come from private investment. But, these producers frequently miss the mark when pitching their project to prospective investors.

In my two decades of experience bridging the gap between the creative and business sides of the entertainment industry, I've learned a thing or two about what really drives investment in entertainment.

Investors put their money into entertainment product for any number of reasons. Often among the least important of these, it turns out, is the profit motivation. Sure, it's of interest, and it would be very nice if the investment generated a meaningful return, but that is rarely the big motivator, In this article, we'll explore some of the other reasons behind the decision to invest in a film, play or musical.

Friends/Family Support for the filmmaker or others involved in the project

  • Often, the first place producers find money for their projects comes from their immediate family, and their friends. Who else, after all, has a greater interest in supporting a budding filmmaker or theatrical producer's career?
  • Sometimes, the investor backs a project for the opportunity it presents to a family member to appear in or work on the project.
  • Occasionally, the writer or director of the picture will contribute to the financing in order to advance his or her own career
  • As cliche' as it sounds, it's not at all uncommon for a financier to attach ‘strings' to his money, requiring a role for a spouse, girlfriend, or child as a condition on the investment. Sometimes, the financier actually expects the role for him- or herself.

Breaking in

  • Some people back projects because doing so offers an opportunity to “learn the ropes” in anticipation of a deeper involvement in future projects.

Social Status value of association with the project

  • Investors in film and theatre projects may become involved simply out of an attraction to the glamour of the business. The opportunity to say he or she was part of the production can be a powerful motivator.
  • Likewise, the opportunity to rub elbows with the cast and crew, perhaps even visiting the set, and certainly attending premieres and festival screenings is often a driving force behind the decision to invest.

Social and Community Consciousness

  • Some investors select projects based on the topic or message communicated by the material. Advancing a particular social cause through entertainment is a very worthwhile endeavor.
  • Sometimes, the motivation to invest comes from the desire to provide economic stimulus to the community where the project will be produced. Film and theatre productions provide jobs, attract audiences to patronize nearby businesses, and generally create a “buzz” around a community.

Boredom

  • Sometimes investors choose to put their money into entertainment out of sheer boredom. After all, chatting over cocktails about your investment in ordinary businesses is far less interesting and stimulating than engaging in a discussion about a movie, theatre or other entertainment property, and how you'll benefit if it's a success.

Conclusion

People are complicated. While it might be nice to think that investors make their decisions about where to allocate their assets on the basis of sound, rational thinking, the mere fact that anyone invests in theatre or film proves that there are other factors at work. Playing to a prospective financier's other motivations is important to securing financing for your next project.

Need help developing your strategy to attract investors to your project?

Sign up for the next Film Finance Boot Camp, an all day intensive designed to get your financing plan organized, and ready to pitch to your prospects.

Asked and Answered: What can I do if my co-writer bails before the script is finished?

Q:  Last year I hit it off with fellow film-maker and we decided to write a script together. This was the first time I've had a partner on a writing project and we were both very eager and excited to produce something. Unfortunately, we began without considering a contract! Fast-forward past the developing difficulties in communication,  an inability to give and receive healthy criticism, to his decision to go AWOL. We have a solid yet rough first draft that can go nowhere fast because he now refuses to return emails and calls. I'm not sure what my options are at this point. Can I offer him a stipend and buy the rights from him? And if this is the case, what does one do with the subsequent writing credits? And what kind of things would be included in a contract of this type?

A:  Ah, the perils of collaborating without a written collaboration agreement.  You correctly recognize that a written collaboration agreement could have saved  you much grief and uncertainty.

When you collaborate with someone, the law considers you Joint Authors, and therefore joint owners of copyright.  Technically, a joint author can exercise any of the rights of a copyright owner without the other's consent, as long as it doesn't transfer exclusive rights.  So, you could continue with a new draft on your own, but you'd still be required to share billing credit and compensation with your former co-writer.  (and the same would apply to him)  But, it's unlikely any buyer would accept something less than exclusive rights, so you'll eventually need to deal with one-another and work out an agreement.

What are your options?  I suppose you could offer him a bit of cash, as a buy-out of the rights, if he'll agree.   You could also just agree on a fixed percentage split for the work he's done to date.

You'll definitely need something in writing now, so you can be secure in the knowledge that you can exploit whatever finished product you ultimately develop.    That agreement should address compensation, transfer of copyright, and the questions of credit, at least as between the two of you.  (But note that, if you're WGA members, or the project is produced by a WGA signatory, it's likely that the union's rules will govern credit issues)    In fact, you could agree that credit determinations will be handled as though governed by WGA guidelines even if it's not a WGA production.

BUT, all of this depends on your recalcitrant (and absent) co-writer being reachable, and amenable to such a deal.  If he's angry or upset, he may simply prefer to ‘stick it to you' by refusing to make a deal.

My advice would be to try to reach him with a proposal, but don't throw too much time, energy or money at the situation if he's not willing to play ball.  If he seems willing, hire an experienced entertainment lawyer to write up your “termination of collaboration” agreement.  Don't try to do this yourself.

But, If he's not interested, move on.  Write your next project.  Writing more new material is the best thing you can do for your career.

Either way, chalk this up to experience.  You've learned a few important things:

1.  Collaborating isn't easy or simple.
2.  Good collaborators are hard to find.
3.  “Breaking Up Is Hard To Do-ooo”
4.   Always have a written collaboration agreement… it'll save you money, grief and headaches in the long run.

This is intended as general information only and does not establish an attorney-client relationship. It is not a substitute for a private, independent consultation with an attorney selected to advise you after a full investigation of the facts and law relevant to your matter. We will not be responsible for readers’ detrimental reliance upon the information appearing in this feature.


Thinking of Producing it yourself? subscribe to my FREE e-course “6 ways to Finance A Feature Film” by visiting https://firemark.com/minicourse

There is no custom code to display.

Find us on Google+