BANKROLL A NEW APPROACH TO FINANCING FEATURE FILMS 2ND EDITION
TOM MALLOY
viBANKROLL2ED_TomMalloy
CONTENTS Acknowledgments
viii
Introduction
ix
Update from Indiewood
xvi
Part I – Getting Star Started ted
1
Chapter 1: Welcome to Indiewood
3
Chapter 2: Why You Need This Book
33
Chapter 3: What No One Else Can Do
39
Part II – Prepping the Project
47
Chapter 4: Selling Yourself on the Project
49
Chapter 5: Creating the Business Plans
59
Chapter 6: Practicing the Pitch
83
Chapter 7: Summing Up – The Five Steps
95
Part III – Funding Your Film
97
Chapter 8: Finding the Money
99
Chapter 9: Starting the Train
109
Chapter 10: The Ten-Arm Approach
119
Chapter 11: The Vested Interest Approach
125
Chapter 12: The Networking Approach
131
Chapter 13: The Finder’s Fee Approach
135
Chapter 14: The Distributor Approach
145
Chapter 15: The Attachment Approach
153
Chapter 16: The Dangerous Approach
163
Chapter 17: The Structured Approach
169
Chapter 18: The Law of Attraction
175
vii
Chapter 19: Getting It Done
181
Chapter 20: Closing
185
Chapter 21: The Special T ips
189
Chapte ter r2 22: A Note on th the e Future of the Fi Fillm Busin ine ess
195
Chapter 23: Taking Action!
199
Appendix A: New Sample Business Plan
201
Appendix B: Books for Review
213
Appendix C: Websites and Other Resources
215
About the Author
217
xviBANKROLL2ED_TomMalloy
UPDATE FROM INDIEWOOD “Unless you continually work, evolve, and innovate, you’ll learn a quick and painful lesson from someone who has.” —CaelSanderson Well,things ell,thingsha hav ve echang changed.Bankro ed.Bankroll llwaswr waswritt ittenin eninearl early y200 2008 8,and, withonlya withonl yamer merethreey ethreeyearspassing,th earspassing,theindustr eindustryhas yhasmorph morphedinto edinto somethingdifferent.Theprimaryreasonforthischangehasbeenthe bankingcrisisofSeptember2008.Moneyseemedtodryupeverywhere wh ere. . It Itwasn wasn’’t that thatinv invest estors ors didn didn’’t want wantto to inv invest… est… it’ it’s s that thatthe they y couldn’t.Italsocreatedageneralfearasfarasinvestingmoneygoes. Thatfearstillexiststoday. SomanydealswerefundedbyHNIs(“HighNet-Worth SomanydealswerefundedbyHNIs(“HighNet-W orthIndividuals”) Individuals”) using ban bank klo loans ans.I .I pe perso rsonall nally yha had dtw two osign signedcont edcontrac racts tsfforlms orlmsin in Augustof2008.Bothf Augustof2008 .Bothfellapar ellapartamonthlater tamonthlater. . Theforeignsalesmarketalsocrashedsomewhat,aswellastheDVD market. mark et.Iusethissto Iusethisstorr yasaprimeexampl yasaprimeexample:Mylm, e:Mylm,Love N’ Dancing , , wasreppedbyafantasticforeignsalescompanycalledVoltagePictures (theyalsoproduced The Hurt Locker ).Oneoftheterritoriestheyini).OneoftheterritoriestheyinitiallyhadtroublesellingwasFrance.T tiallyhadtroublesellingwasFrance. Theproj heprojectionsforthisterritory ectionsforthisterritory were$400,000onthehighside,$250,000medium,and$125,000low. A few mo mont nths hs aft after er Se Sept ptemb ember er of 200 008 8, I got a ca call ll fro from mV Vol oltag tage e Pictures.TheyhadnallysoldFrance…for$30,000.Iturnedpale. “$30,,000?That’ “$30 000?That’s sless lessthana thana quarter quarterofthe ofthelo low west estpro project jectio ion!” n!”Then Then theyconveyedtomethatamajorAmericanlmwithamajorstar(I won’tsaythenameandembarrassthelm)gotabigfatwhopping$0 fromFrance.Didthatmakemefeelbetter?Notreally. Sothis “StateoftheUnion “StateoftheUnion” ”has hasbeensomething beensomethingI’ I’vehadt vehadtodealwith odealwith, , ashasev asha severyon eryoneelsein eelseinIndi Indiew ewoo ood.Irememb d.Iremembertalkingtoaf ertalkingtoafriendat riendat theAFM(AmericanFilmMarket)la theAFM(AmericanFilmMark et)lastyear styear,and ,andw we ebot both hjok jokedthat edthat therearetwoprotabletypesofmovies:oneswithbudgetsover$100 million,ando mil lion,andoneswithbudgets neswithbudgetsunder$ under$1 1mil million. lion.Thedaysof Thedaysofthemidthemidrange$5-6millionlmsaregone.
xvii
Andwhyisthat?Well,besidestheforeignsalesmarketbeingreduced not no ttto ohal half,but f,butma mayb ybe etto1 o1/5th /5th or or1 1/8th /8th ofwha ofwhat titused itusedtto obe be,the ,the DVDmarketisjustasbad!Who’sbuyingDVDs?Thinkaboutit,and thinkaboutthefuture thinkaboutthef uture.Mostpeop .Mostpeoplewil lewill lha hav ve eset-t set-topbox opboxes esin inthe their ir housesandwillbeabletostreaminstantlywhate housesandwillbeablet ostreaminstantlywhatevermo vermoviethe vietheywant ywant towatchatanytime.WhypurchaseDVDs?Whyrent?Blockbuster has l led ed fo for r ba bankrupt nkruptcy cy, , and andN Netix str streami eaming ng is th the e wa way y of ofth the e future(fornow). future(fornow) .Theat Theaters ersarehangin arehangingontotheon gontotheonelittleadvantage elittleadvantage they th ey ca can n mus mustter aga against inst ho home me vi view ewing ing, , whi hich ch is 3D. Go to an any y movieandyou’llsee90%ofthepreviewsforupcominglmsarefor 3Dlms.IlovewhenIseeatrailerfora3Dmoviethathasnobusinessbeing3D!Trustme,IgetitforGreen Lanternor The Av Avengers engers, butwhenthenewDianeLaneromanticcomedycomesoutandit’ butwhenth enewDianeLaneromanticcomedycomesoutandit’s s 3D,something’swrong! I sp spea eak k ab abo out l lm m n nan anci cing ng ar aro oun und d th the e coun untry try an and d ar aro oun und d th the e world.WhenIstartmyseminarswiththisinformation,ittriggersa generalmalaiseintheaudience.ItrulywishIhadtheguts(orlackof ethics)tomakeeverythingsoundbrightandsunny,butIcan’t.We(the independentlmcommunity)areallhopingitturnsaround,butthe hardtruthisthatsomethingswillneverbethesame. Yet,there et,there’’s sa ago golde lden nopp opportunity ortunityher here ethatI thatIwantto wanttomak make esur sure ey you don’tmiss.Moviescanbemadenowforclosetonothing.A-listand B-liststarswhomayhavemade$500,000to$1millionapictureare nowmaking$50,000to$60,000.That’sanopportunityforyou!Ilook atthelmsIhavemadeinthepastandIknowIcouldmakethem now no wffor rpe perh rhaps aps a aqua quarte rter ror or ev even ena aft fth ho or rsix sixth th of th thei eir rori origina ginal l budgets.IfImadea$1millionlmveyearsago,itmightlooklike aglo a gloriedstud riedstudentlm. entlm. It wou ouldhav ldhave eso someC- meC-orD-liststars, orD-liststars, and belmed be lmedwith witha amostl mostly yine inexp xperien erienced cedcre crew w.T .Today oday, ,that that$ $1 million budgetcangetyouwhat$5or$6mil budg etcangetyouwhat$5or$6millionco lioncouldhav uldhavegotteny egottenyouve ouve yearsago. For orsimp simple le evi eviden dence ceof of this this, ,lo look oktto ote tele levisi vision on. .Ma Majo jor r lm lmstars starsare are now no wdoin doingTV gTV.Why? .Why?Bec Because ausethat that’’s stheonly theonlypla place cewh where erethe they ystill still getasalary.TheindustrygulpedwhenScarlettJohanssenwasoffered $250,,000 for Iron Man 2(Ibelieveheragentsnegotiatedherupto $250 $400 $40 0,000 000)). .Thatwouldhav Thatwouldhavebeen$ ebeen$8mi 8milliona llionamereveyear mereveyearsago sago.It’ .It’s s
xviiiBANKROLL2ED_TomMalloy
asif studiosgotsmar asifstudiosgots mart. t.A Acto ctorsand rsandcreww crewwerebeingo erebeingoverpaid,andthat verpaid,andthat bubblehasburst.Willsalariesgoupagain?Perhaps.Butmostlikely theywillbesmallerthantheyoncewere. So tha that’ t’s s a go gold lden en opp opportun ortunity ity fo for r you as a lmmak lmmaker er. .Y You ma may y beabletogetafantasticdirectorandstarsthatyouneverthought werepossibl erepossible eif ifyo youcan ucanjustclosethe justclosethenancing nancing.Fo .For rme me,that’ ,that’sthe sthe monsterbonusthatthischangeintheindustrycreated.Findmoney, andyouhavearealpro andyouha vearealproject. ject.A Arealproj realprojecttodayisrareandam ecttodayisrareandamazing azing andwillattractsomuchmorevalue(i.e.,talentandcrew)thanin previoustimes. Unfortunately,noteveryonehasseenthelight.Manylmmakers, actors,andcrewarestilllivingin2005.EverythingI’vesaidsofar inthisup inthi supdate datecanbe canbeback backedup edupwith withhardevidence hardevidence.Y .Yet,manysti et,manystill ll thinkthattheycancommandthesamesalariesandfeestheyreceived backwhenthingswererockingandrolling.It’snotonlyridiculous, it’sdangerous. Let’s Let’ ssa say ytha that ty you wer ere eab able le to orais raise e$2million $2million,andyo ,andyou ucasta castalm lm withsomeC-liststarandano-namedirector.That$2millionlm willmostlikelymakeabout$100,000fromforeignsalesanddomestic DVD.Isthatwhatyouwanttohavetoexplaintoyourinvestors? Rec ecentl ently y, ,I I was washir hired edtto do a re rewrit write e on a $50 $500 0,000 i ick ck. .By Bythis this point,I’ po int,I’dstartedtoseethelight d startedtoseethelightthat$500 that$500,,000 000is isarespecta arespectabl ble enumnumberandagreatlmcanbemadeatthatpriceifthescriptiskiller. Unfortunately,theproducershiredaformerstudiodirectorwhowas stillliving stilllivin gin in20 2005 05.He .HeandI andI ha had da aph phon one eco conv nversat ersatio ion nabo about utwh what at hewasdoingwiththelm,andhecomplainedthat$500,000was waytoolittl wa ytoolittletospendona etospendonafe feature ature.Hewasplanningtohireinterns .Hewasplanningtohireinterns andstudentlmmakerstobeinvolvedwiththeproduction,because hedidn’trealizethat,intoday’sworld,hecouldbehiringlegitimate, experiencedtalentona exp eriencedtalentona$500 $500,,00budget.Ireallywantedtophonethe inv in vest estors orsand and warn warnth them emth that atthis this dir direct ector orw wou ould ldbe beushi ushing ngth their eir moneydownthetoilet,butitwasn’tmyplace.Itwasn’tmyproject, andpeoplearegoingtomakemistakeswiththeirmoney.
UpdatefromIndiewoodxix
IconveyedallthisinaseminarIrecentlyled,andsomeoneraisedhis handandasked,“Isthereanygoodfromthis?Iwanttohangmyself!” Myresponset Myresp onsetohimwasthatther ohimwasthatthereissomuchgoo eissomuchgoodf dfromthisifyo romthisifyou u lookintherightplace.IfImadea$3millionlmanditturneda$1 millionprot,thatwou millionprot, thatwould ldbe bea aincre incredib dible lefailur failuree.Yet,if I Imadethat madethat samelmfor$500,000,thatmoviewouldhavedoubleditsinvestment. Here’swhatI’mtellingyou:Itcanbedone! I’mgonnaadviseyourightnow.Ifyouareworkingwithanyactor, producer,director,lineproducer,oranyothercrewwho’s“livingin 2005”andthinkshis/hersalaryshouldbetheequivalentofwhatit wasbackthen,dropthatpersonimmediately. wasbackthen,dropthatpersonimmediately .Thatpersonisgoingto Thatpersonisgoingto steeryoudownaroadtoruin.Twofriendsmadelmsrightaround thetimetheprotsfelloffacliff.Bothhadteenylittlestars,and bothdidn’tevenmake$200,000fromsales.Eachlmwasbudgeted atalmost$4million.That’sscary. Sotakethisopportunityandloweryourbudget!Findalineproducerwhoknowsthe“StateoftheUnion.”Makealmforunder $1millionandmakeitlooklikea$5millionlm.Thosearelms thatIwanttomake!
Beware of Microbudget Microbudgets! s! Everyon veryonewant ewantstom stomak akethe ethenextP nextParanormalActivity aranormalActivity.Sounds .Soundsgreat, great, right?A$15,000lmthatmakes$100million?Understand,however, that th at th those ose lms are winni winning ng lo lott ttery ery ti tick ckets ets. . Fil Filmmak mmakers, ers, ho how wev ever er, , don’tgetthat.Theyimmediatelytrytomakesimilarmoviesandhope forthebest.I’mnotsayingIwouldn’tmakealmlikethatasanexperiment(andI’mnottalkingabout$15,000–morelike$100,000), butthat’swhatitwouldhavetobe. Whynotmakealmwherebudgetisn’tthemainsellingpoint?Insteadof“Doyouknowhowsmallthebudgetwasonthislm?”get peopletosay peop letosay,“ ,“Didyo Didyouseehowgreat useehowgreatthis thislmwa lmwas?” s?”That’ That’sthek sthekind ind oflmIwanttomake,andthat’sthekindoflmyoushouldmake. Usethis“StateoftheUnion”andmakeamovieforapricethat’sreasonable sonab le. .Then,ifyo Then,ifyour$600, ur$600,000 000lmlookslikea$5mi lmlookslikea$5millionlm,you llionlm,you haveachancetoknockoneouto hav eachancetoknockoneoutofthepark. fthepark.
WhyYouNeedThisBook33
Chapter Two
Why You Need This Book What Do You Have? You oumay mayknow knowpeople people.Y .You oumay mayhav have efr friend iends swhoa whoare reactors.Y actors.You may ma y ha hav ve frie friends nds who ar are e st story orybo boar ard d artists artists, , ex expe perie rienc nced ed DPs, ADs,or line lineprodu producers. cers.Y You oumayevenhav mayevenhave ea aconn connectio ection nwith witha a prestigiouslm prestigious lmproducer producer.Y .Youal oualsom somayhavea ayhaveakil killerscr lerscript ipt(more (more on that in Chap Chapter ter4: 4: Selling SellingY Yourself ourselfon on the theP Proj roject) ect).Y .You ou may havefreelocations,freeequipment…evenfreelm. Butyoustillneedmoney. Attheendoftheday,allthatmattersis“gettingthegold.”The gold go lden en rul rule e of Holl ollyw ywoo ood d is “He who has th the e go gold ld mak makes es th the e rules.”Iheardthatexpressionafewyearsagoandhavecometo realizethatthere reali zethatthere’’snothin snothingtr gtruerinthel uerinthelmbusine mbusiness. ss.T Tomakey omakeyour our dreamofalmareality,youneedmoney.
The Other Books Overthecourseofmylife,I’verunintoseveralbooksthatpromisedtorevealthetricksandtradesusedto“nanceyourlm.”The onethingthesebookshadincommonwasthatwhenitcameto thenitty-gritty,theyallfailedme. Sure, Sure ,th the e bo books oksw wou ould ld te tell ll you ouho how w ot othe her r pe peop ople le ha hav ve do done ne it, describ des cribing ing“ “ne negati gativ ve pi pickup ckup dea deals, ls,” ” and and“b “bank ank nan nancing, cing,” ” bu but t I keptthinking,“HowdoIdothat?”It’snoteasyforalmmaker tojustwalk intoSon intoSonyand yandsay say,“ ,“He Hey y,can ,canI Igeta getanegati negativepickup vepickup dealformylm?”Thefunnythingis,ifyou’reatallfamiliarwith negativepickupdeals,you’dknowthat,evenifyouhaveone,you stillneednancing!
34BANKROLL2ED_TomMalloy
Ikeptsearching,hopingoneofthesebookswouldrevealthetrue secreta secr etastowh stowheretog eretogetthemon etthemoneyandwho eyandwhomtogetitfrom.So mtogetitfrom.So manyofthebooks,includingonewhoseentirefocusistoshow the th e re read ader er ho how w to writ write e a pe perfe rfect ct bus busin iness ess pl plan, an, co consi nsigne gned d th the e most mo st imp importa ortant nt el elem ements ents — th the e ho how w an and d th the e whe here re — to th the e lmmaker.Iwasdumbfounded.Ihadmyperfectbusinessplan,so nowwhat?IhadstoriesofhowKevinSmithgothislmmade(by maxingouthiscreditcards),sonowwhat?Isthatwhatyouwant metodo?Isthattheonlywaytomakealm? Iattributethislackofknowledgetotwopotentialproblems: Most Mostofthe ofthepe peop oplewriting lewritingth the e ot other her bo bookshav okshave e ne nev ver fundedalm.Theywereperhapslawyersinvolvedwith drafting draft ing th the e do docu cume ments nts for fun fundin ding, g, or th they ey sc scho hool oled ed themsel th emselv vesin ev every eryaspe aspectof ctofho howlm wlmsare sarefund fundedtraedtraditionally,buttheythemselvesneverwentoutandraised moneyforalm.Or… = Theydidn’twanttotrulygivetheirsecretsaway.Letme explain: =
Peopleinthelmbusinessconsidermoneyacommodity.IfI’m tellingyouthat,attheendoftheday,moneyisallthatmattersto alm,doyouthinkthatapersonwhokno alm,doyouthinkthatapersonw hoknowswhe wswherecashcanbe recashcanbe foundwilljustgiveawaythatsource?Hellno! Peo eopl ple e wi with th HN HNIs Is en end d up pro rottec ecti ting ng th them em li lik ke a mo moth ther er li lio on wou ould ld pr prot otect ect he her r cu cubs bs.I’mguiltyof .I’mguiltyof ita itas sw well, an and d I mak make e no excusesforit.I’vegottenintoscreamingmatcheswithpeoplewho triedtocontactmyHNIsbehindmyback. triedtoco ntactmyHNIsbehindmyback.I’ I’vecau vecaughtpeopl ghtpeopletr etryyingtostealmyinvestorsred-handed.TheHNIfundstheprojects thatfeedmywifeandkid thatfeedmywifeand kidsand sandpayfo payformyhouse. rmyhouse.Whywo Whywouldn uldn’’tI wanttoprotectthatperson? I’vealreadymentionednon-circumventagreementsandhigh-level relationships.Producersclingtotheirmoneypeoplejustlikesuccessfulsalesmenclingtotheirtopclients.Whatamazesmeisthat, inotherbusinesses,ifyoustolesomeone’sclient,you’dbethought of as a ho horrib rrible le pe perso rson. n. If you st stea eal l so some meon onee’s cli client ent or mo mone ney y
WhyYouNeedThisBook35
personinthelmbusiness,you’dbeconsiderednothingshortof normal.Ithappensallthetime.MyproducerfriendIsenrelayeda greatjokeaboutthelmbusiness: Q:“Howdoyoutellthedifferencebetweenyourfriendsandenemiesinthelmbusiness?”
ourfriend riendsst sstabyoui abyouinthe nthef front.” ront.” A:“Yourf
The Most Important Thing to Learn Thesinglebestthingyoucandotoraisemoneyforalmis:
Stay away from anyone who is associated with the film business. Ionceheardanentertainmentatto Ionceheardanente rtainmentattorneyfromChicag rneyfromChicagoputitbest: oputitbest: “Youwan ouwantmoney tmoneyforlm forlms,getoutt s,getouttaDodge! aDodge!” ” Nowletmetellyouwhy.SinceI’mnowconsideredveryskilledat raisingmoneyforlms,Igetpitchescomingtomeallthetime. Peopleaskme,“Canyouraise$3millionformylm?”Let’sforget, foramoment,themeritsoftheirprojects,oranyotheraspectsoftheir lms.Let’sjustsayIhadanHMIwhowantedtoinvest$3million.Do youreallythinkIwouldgivehimorhertosomeoneelse?Ofcourse not!Iwouldgethimorhertogivemethe$3million! Thi slessontookmesolongto Thislessontook mesolongtorealize. realize.T Tr ust ustme me,Iw ,Iwas ason ontheother theother endformanyyears.Iwouldpitchpeopleinthelmbusinessall thetime,hopingtorai thetime, hopingtoraisemoney semoney. .Whilesomeenjoyfundin Whilesomeenjoyfundingother gother projectsanddon’twanttobeinvolvedcreativelyatall,mosthave theirownagendas.Theonlyexceptionistheproducerwhohappenstobeloo penstobe looking kingfortheexactty fortheexacttypeofprojectyou peofprojectyou’’redevel redeveloping oping. . Forexample,sayyouhavearomanticcomedy,andthat’swhattheir nanci na ncier er als also o wa wants nts — bu but t th the e pr produ oduce cers rs on only ly ha hav ve a dra dramat matic ic pieceattheready.Thisscenarioistheexceptiontotherule;the majority majo rityofpeo ofpeopleinthisbusinessareonlyout pleinthisbusinessareonlyouttohelpthe tohelptheirown irown projects,andIdon’tblamethem! WhileattheAFMinSantaMonicaafewyearsago(moreonthe AFMinChapter14:TheDistributorApproach),Iwasinalunch meeti me eting ng wit with h a guy I was ap appr proa oachi ching ng for fun fundin ding g for Love N’
36BANKROLL2ED_TomMalloy
.AsIwasdiscussingwhatweneededbudgetwise,InoDancing .AsIwasdiscussingwhatweneededbudgetwise,Inoticedhewashalf-listening tic edhewashalf-listening.Ithre .Ithrewoutthenameofanactr woutthenameofanactresswe esswe wereconsideringfortheleadrole.I’mnotgoingtosaywhoitwas exactly,butlet’ exactly ,butlet’spicka spickafamousmoviestar: famousmoviestar:CharlizeTheron CharlizeTheron.Isaid .Isaid wewereconsi wew ereconsideringmaking deringmakinganoffertoChar anoffertoCharlize lize,andhis ,andhisey eyeslit eslit up.Suddenlyhehadcometolife!Heturnedtomeandsaid,“Hey, Ihavea Ihav eapro projectthat jectthat’’sper sperfe fectforher…do ctforher…doyo youthink uthinkyo youcan ucanget get herthescript?”Inthatonesecond,Irealizedthatthisguy,evenif hehadmoneyconnections,wouldalwaysputourlminsecond position.Hewasgoingtoworryabouthislmsrst. I’ve he I’v hear ard d it hap happe pen n do doze zens ns of oftim times es.Anoth .Another er nan nanci cier er frien friend d of minecon mine convey veyedast edastor oryaboutmeetingwithsome yaboutmeetingwithsomeW Wal allStreetinvestor lStreetinvestor typestopitchaslateofprojects.Inthemiddleofthemeeting,the WallStreetersaskedhim,“Well,whatifwehadourownscripts? Doyouhavewaystonancethose?”Herewasmyfriend,ina meetingwithpeoplehethoughtwereinvestors,andtheywerepickinghisbrainabouthowheoperated,andeventuallywereasking hi him m fornancing! Another Anoth erfrie friend nd(an (and d th this is is on one e of my allall-tim time e fa fav vori oritte fun fundin ding g stories)had,onhisown,raised$500,000fora$1millionlm.He startedgoingouttopotentialnanciersinthelmbusinesstosee ifhecouldraisetheother50%.Hispitchwasthathehadthelm half-nanced,andheonlyneededtheremainder.Well,hestarted puttingoutcalls,andthepeoplehecalledputoutcalls,andsoon, untilafewcallscamebackin.Oneinvestorclaimedhecouldput up50%.Myfriendthoughtthatwasgreat,untilherealizedthe so-calle so-c alled din inv vest estorwas orwas talkingabou talkingabout tth the e50%thatmy 50%thatmyfriendhad friendhad alreadybroughttothetable.Hewaspitchingmyfriendwithhis ownmoney! PeopleinHollywoodareonlyconcernedwiththeirowncareers, andI and I do don n’t bl blame ameth them. em. Th The e lm bus busine iness ss is incr incredi edibl bly y tou ough gh. .If If succ su ccessfu essful l pe peop ople le in th the e indus industry try do don n’t wa want nt to hel help p you ou, , it it’’s no not t necessarilybecausethey’rebad.Theyaremorethanlikelyjusttrying tohelpthemselves. Abo bout ut ten yea ears rs ag ago o, a fri frien end d of th the e fa famil mily y won th the e Aca cade demy my AwardforBestOriginalScreenplay.Hewasthehotwriteratthe
WhyYouNeedThisBook37
time(andsti llis)),andhew time(andstillis ,andhewantedtotak antedtotakeashotatdirecting. eashotatdirecting.Sothe Sothe studiosgav studi osgavehim ehimalowalow-budg budget(bystudiostandards) et(bystudiostandards)lmtodirect, lmtodirect, thatcameinatabout$15million.Thelm,unfortunately,bombed. Iwasactuallyabigfanofhisdirectingeffort,so,afterafewyears, IapproachedhimtohelmThe Alphabet Killer .Heemailedmeex.Heemailedmeexplainingthathecouldn’tgetajobdirectinginthistownifhetried andthathewouldonlybeanalbatrossandanobstacleifIattached himtomyscript. MyfriendhadwonanOscar!Hewasontopo MyfriendhadwonanOsc ar!Hewasontopofthewo ftheworld, rld,right? right? Wrong.HisOscarand$1.95couldbuyhimacupofcoffeeatthe localdeli,asfarasdirectinggoes.(Writingwise,though,hemakes millions, so don don’’t fe feel el to too o ba bad d fo for r him. him.) )That That’’s ho how w quickly this businessforgetsyou,writesyouoff,ortossesyoutotheside.Now, knowingthat,can’tyouseewhypeopleonlywanttohelpthemselves?Theyhavetopaymortgages,rent,andbuyfoodfortheir kids!Evenifyouweretoofferthemgenerousnder’sfees,it’snot goingtohelptheircareers.Sousingsomeoneintheindustrytotry tofundyo tofund your urlmi lmisa samistake mistake.Y .Youmu oumustremember strememberthat,whoe that,whoever ver yourindustryfriendsare,theyarelookingoutforthemselvesrst andforemost.
Who Has Funded My Films? Where Wher e ha hav ve I rais raised ed my pri priva vatte equ equity ity mo mone ney?W y?Well, ell, th the e mos most t signi si gnican cant t so sour urce ces s wer ere e a co comme mmerrcia cial l furni furnitur ture e sa sale lesma sman n from New Ne wJJersey; ersey;aW aWebmaster ebmasterfrom fromupstateNewY upstateNewYork;a prof professio essional nal pokerplayerfromLasVegas;amarketinggurufromArizona;and aguyfromupstateNew aguyf romupstateNewY YorkwhoseunclewasontheF orkwhoseunclewasontheForbes400 orbes400 list. lis t. Non one e ha had d an anyt ythin hing g re remo mote tely ly to do wit with h th the e lm bus busin iness ess,, exceptthattheyall ex ceptthattheyalllo lovedwat vedwatching chingmovi movies. es. Peopleoutsidethelmindustrywantin.Theywanttohavestars’ cellphonenumberssotheycancallthemasfriendsandsayhello. Theywanttogooutdrinkingwithamoviestartheyidolizedinthe past.Theywanttobe“ past.Theywanttobe “intheclu intheclub b.”Successfulpeoplein ”SuccessfulpeopleinHollywood Hollywood arealreadyintheclub,sopitchingthemyourlmisonlyanother way wa y of askin asking g th them em to he help lp you gai gain n ad admiss missio ion. n. All th the e whil hilee, they’retryingtoretaintheirownmembership.
38BANKROLL2ED_TomMalloy
Keepin eepinmindthatbypitchingapersonoutsidetheindustry mindthatbypitchingapersonoutsidetheindustry,yo ,you u areofferinghimorherawayin.Imakesuremylminvestors getwhattheywant.AllveofthepeopleIjustmentionedare nowproducingmultipleprojects.Andallfourhavemoviestars’ cell numb numbers ers pro programme grammed dint into oth theirpho eirphones nes,due ,duetto omy“ my“let letting ting themin.”
This Book This bookwil Thisbook willtellyou ltellyouhow howtotak totakethatideathat’ ethatideathat’sfesterin sfesteringiny ginyour our headandturnyourdreamintoareality.Itismyintentiontotake youthroughthestepsthatarethemostimportanttogettingyour lmnanced.Iwillnotkeepanysecrets.IwilldivulgeallIknow aboutwhere,when,andhowtondthemoney.Ifyoufollowthe steps,Iknowyouwillbesuccessful.
WhatNoOneElseCanDo39
Chapter Three
What No One Else Can Do How Valuable Are You? Understandthis :Ifyoucanraisemoneyforafe Understandthis:Ifyoucanraisemoneyf orafeaturelm,youha aturelm,youhave ve just ju st se sepa parat rated ed you ourse rself lf fro from m 99% of in indep depen ende dent nt lm pr produ oduce cers rs workingtoday working today.That’ .That’showvaluable showvaluableyouare. youare.
PhotobyScottSloan
The Attic’ Att ic’s sElisabethMoss,CatherineMaryStewart,andmeinacalmscenebeforethe
storm.
AfterImadeThe Attic cometofruition,Iwasallowedintoanexclucometofruition,IwasallowedintoanexclusiveclubcalledTheCircuit,agroupofthemostsuccessfulpeople workingi worki ngininde nindepende pendent ntlm lminNew inNewY York orkCity City. .TheCirc TheCircuitcon uitconsi sisted sted ofproducers,writers,anddirectors.Actorsandactresseswerebanned (Iguessnoonewantedthemshowingupaskingforjobs).
40BANKROLL2ED_TomMalloy
It was a re reall ally y go good od id idea ea th thou ough ght t up upb by a gre great atgu guy y na name med d Ma Mark rk Grande,whowas,atthetime,theheadofHowardStern’sproduction company. TheCircuit’sgoalwasfo TheCircuit’ sgoalwasformemberstomeetonceamonthandnetrmemberstomeetonceamonthandnetworkwithothersuccessfulpeopleinIndie wo rkwithothersuccessfulpeopleinIndiewo wood. od. Iwassoexcitedatrsttobemeetingallthesepeople.Somewere directorswhohaddonemultiplep directorswhoh addonemultipleprojects. rojects.Somew Somewereproducerswho ereproducerswho hadoveradozenlmsundertheirbelts.Isoonfoundout,though, thatallofthemhadonethingincommon:Theyallwantedmoney. Ialsodiscoveredsomethingelse:Noneofthemhadanyideahow togetit. Now,pleasedon Now ,pleasedon’’ttakethisthewr ttakethisthewrongway;Isti ongway;Istill llthinkTheCircu thinkTheCircuit it was(andis)agreatwaytonetwork,andifyouhaveenoughcredits andclouttogetin,goforit.(I’veincludedtheirinformationatthe endofthebook endofthe book..)Also, )Also,I Ihav haven en’’tbeentoa tbeentoameetingin meetinginyearsbecause yearsbecause ImovedtoLosAngeles,soIcannotattesttowhoattendsnowadays. IjustwanttonotethatwhenIwasgoingtome Ijustwanttonotethatw henIwasgoingtomeeting etings,Ispo s,Ispok kewith successfulIndiewoodpeople,andtheystillwereallsearchingforthe gold.Eventhetoppeoplecan’tndit! Atthetime,Ihadonlyraisednancingforonefeaturelm, The ,buttherewerestillpeopleinTheCircuitverymuchinterested Attic ,buttherewerestillpeopleinTheCircuitverymuchinterested inmebecauseIhad inmebecause Ihaddone doneWhatNoOneElseCanDo WhatNoOneElseCanDo.M .Myproducer yproducer f riend riendIsenR IsenRobbinsputit obbinsputitthisway:“T thisway:“Tom,you om,you’’vebecomethepretty girlwhoeveryonewantstotaketotheprom!”Thisishowvaluable andimportantbeingabletonancelmsisinIndiewood. Another Anoth er st story: ory: I ha had d writ writtten an ac acti tion on sc scrip ript t th that at was pas passe sed d on throughsomeconnectionstoapairofveryexperiencedproducers. WhenIsay“veryexperienced WhenIsay “veryexperienced,,” ”Imeanthattheyhadboth Imeanthattheyhadbothproduced produced someofthemostsuccessfullmsofalltime.Theyreadmyactioner, andtheycalledmeinforameeting.Turnsoutthatmyviolentactionthriller(therstoneIhadwritten)didn’tmeettheircriteria. Infact,thethril Infact,th ethrillerwassoviol lerwassoviolentandquirky entandquirky,thatitmayne ,thatitmaynev verget made,but made ,butithas ithashelp helpedmeimmensel edmeimmenselybecauseth ybecausethewritingis ewritingissom some e ofthebestI’veeverdone.
WhatNoOneElseCanDo41
Thesetwoproducerstoldmehowmuchtheyadmiredmywriting skillandwoul skill andwould dlo lov ve etond tonda awa way ytowo towork rkto toget gether her.I .Iwo wouldhav uldhave e beenelated,exc beenelate d,except eptfo for rthefact thefactthatthe thattheco compan mpany ythe they yw work orked edfo forr, oneofthemonstermini-majors,hadrecentlyclosedupshop.They couldn’tpaymeanything,buttheydidtellmethattheywerelookingtoputtogether$100millionforalmfundandmighthaveit completedbytheendoftheyear. Then, foll Then, ollo owin wing g a lit littl tle e awkw kwar ard d pa pause use, , th they ey turn turned ed to me an and d asked, ask ed, “So So,, Tom om,, ho how w di did d you na nanc nce e all of you our r lms? lms?” ” I was abbergasted.Thesegiganticproducerswereaskinglittleol’mefor advice. advice .T Tru rustme, stme,if ifIgaveyo Igaveyoutheli uthelistofcredit stofcreditsbet sbetwe weentheset enthesetwo wo, , yourjawwouldhittheoor.Theproblemwas,theywerealways usedtohavingstudiomoneyat usedtohavingstudiomon eyatthe their irdisposal, disposal, andnow andnow,facingthe ,facingthe independentroute,theyweresearchingforanyadvicetheycould nd.Amazing.Istill nd.Amazing .Istillha hav vetheutmostrespe etheutmostrespectforthe ctforthemand mandamstill amstill hopingtheycangettheirnancingsowecanworktogether hopingtheycangettheirnancingsowecanworkto gether. . Again,itjustgoestoshowyouthatifyoucangetthegold,you becomearareandinvaluablecommodity.
What Everyone Ever yone Will Tell You You Nowhere’stheproblem.Thisissomethingyoushouldwatchoutfor: Alotofpeoplewilltellyoutheycanraisemoneyforlms.Almostall ofthemarefull ofthe marefullofit. ofit.Itto Ittookmealongtimet okmealongtimetolearnho olearnhowtoqualify wtoqualify moneypeo mon eypeopl plee,and,inthischapte ,and,inthischapterr,Iwil ,Iwillimpartal limpartallthetechni lthetechniquesI quesI know. TherstthingIwilltellyouisthatyouhavetotakethesamesteps witheveryone—noexceptions.Idon’tcarewhatthepotential nancie nan cier rlo lookslik okslikee,or wh what atheor heor sh she e is isw wearing earing,or ,or wh where ere you aremeetinghimorher.While99%ofthesepeopleyoutakethe steps st epswith with will willgo go no nowh wher eree,thatnal1%will mak make ey you our rdre dream am cometrue! Ilearnedthislessonthehardway.IwasataChristmaspartyata celebrityfr celebrit yfriend iend’’shouse, shouse,andmy andmywife, wife,who who’’ssocharm ssocharmingandf ingandfriend riendly ly thatsheactuallydoublesmypitchingpowersjustbybeingbymy
42BANKROLL2ED_TomMalloy
sideatparties,wastalkingtoacasuallydressedmanwearingpenny loafers.Mywifetug loafers.M ywifetuggedatmyar gedatmyarm, m,“T “Tom,yousho om,youshouldmeetthi uldmeetthisguy sguy. . Henanceslms.”Itwastheholidayseason,Iwashavingfun,and thelastthingIwant thelastthingI wantedtodowastal edtodowastalkbusiness kbusiness.Ont .Ontopofthat, opofthat,my my celebrityfriendhadmorecelebrityfriendscomingoverandIwas excitedtomeetthem.Also,Iwasjustsosickofpeopletellingme they“nancelm the y“nancelmss”thatI simpl simply ydidn didn’’t tfe feel ellik like etaking takingtheprope theproper r steps.So steps. So,t ,tomakealongst omakealongstory oryshort,Iblewtheguyoff. short,Iblewtheguyoff. I’msureyoucanseewherethisisgoing. HeturnedouttobeoneofthepeopleontheForbes400list.He alsofoundedon alsofou ndedoneof eofthebigg thebiggestInternetcomp estInternetcompaniesinthewor aniesintheworld(I ld(I won’tmentionthename,butlet’sjustsayit’spartofallofourvocabulariesnow),andhehadfundedabouttenlms,threeofwhich werenominatedforAcademyAwards.Ughh. That li That litt ttlle less esso on se serv rved ed as a rem emin inde der r to me to foll llo ow up wi with th everyo ev eryone!SoI’mstartingthispart ne!SoI’mstartingthispartofthe ofthe cha chapt pterwitha erwithawarnin warning: g: Alwaystakethesteps.Ifthepersonturnsouttobeafake,callit practiceforyouandyourpitch.
What to Watch Out For The ph The phrase rase th that atev every eryon one e in th the e lm bu busin siness ess use uses s to qua qualify lify an investoris“Isheorshereal?”Theword“real”istheultimateassessment.I’vegott sessment.I’ vegottentothepointwhereIhav entothepointwhereIhavemetso emetsomanypeopl manypeople e whojusttalkandpromiseandtalksomemorethanIamskepticalof everyone.T everyone .Tome,potential ome,potentialinvestors investorsaren aren’’treal trealunti until: l: =
They’veinvestedinmylmsbefore.
=
Theyarewritingmeacheckorwiringmemoney.
Or… OnlythenwillIconsiderthemtrueHNIs. HonesttoGod.Ifsomeonecal HonesttoGod.Ifsomeon ecalls lsmeandsays, meandsays,“T “Tom,Ipromise om,Ipromisethat that I’mgonnasendyouthecheckfor$2milliontomorrow!”Igivethat abouta20%chanceofcomingtopass.I’vehadpeopletellmefunds were erego going ingto to“ “close close”so ”so ofte often, n,and andI’ I’d d sayit actuall actually yhapp happens ens one outofeveryftytimes.Soyouhavetohaveahealthyskepticism.
WhatNoOneElseCanDo43
Neverputallyoureggsinonebasket(seeChapter10:TheTen-Arm Approach). HaveTheyInvestedinthePast? Therstthingtoaskapotentialinvestoriswhathisorherstory is.It’sagreatwaytostartapitch,too,becausepeoplereallyliketo hearthemselvestalk.Theyalsoliketotellyoutheirstories…it’s cathartic,inaway.Now,ifthisinvestorhasnevernancedalm before,thingscouldturnoutne,butmaybeaminiredagshould go up upandyo andyou ush shou ouldsto ldstorethis rethisinf informati ormationin oniny you our rmind. mind. Ifthis inv in vest estor orhas hasne nev ver erin inv vest ested edin inan anyth ything ingbef befor oree, ,a a mo monst nster erre red d ag shouldgoup!Neithermeansthatheorsheisadeadend,butthe secondquestionisprobablythemostimportantthingIcanoffer you:Hasthispersoneverinvestedinanything?Ifinvestmentshave beenmadeinthepast,hasitbeeninlms?Whichoneshavethe investorbeeninvolvedwith? Somanyhavebeenburnedinvestinginindependentlm,it’sactuallyeasiertoclosesomeonewhohasn’tnancedoneinthepast.But thekey theke yis, is, the they yha hav ve etohav tohave einv investe ested din insom something ething.Y .You ouwantthe wantthe peoplewhohavemoneytogetridofandarehungryforapieceof thelmbusiness. Side Note | There’s a horrible joke associated with independent film. It goes: Q: How do you make make a sm small all fortune fortune in independent film? A: Invest a large fortune.
Isaythisjokeishorriblebecauseifyoushareitwithaninvestor, you yo u’re reprob probabl ably ydeadin deadin thewater thewater.Thetr .Thetruth uthis, is, most mostindep independent endent lmsaremadeaslaborsoflove,withoutanyideasonmarketingor sellingthelminthelongrun.Ifyoumakealmabouttwogay collegeroommatesinOklahoma,itmightbepersonaltoyou,but wheree’sit wher sitgo going ingtoplay?Jap toplay?Japan?France? an?France?Germany?Hell,it Germany?Hell,itprobab probably ly won’tevenplayinOklahoma!I’llgetmoreintomarketinglater(see Chapter Chapt er4: 4:SellingY SellingYourself ourselfontheProje ontheProject) ct),butunder ,butunderstand standthatthe thatthe stigma asso associat ciated ed wit with h ind indepe epende ndent nt lms is th that at th they ey don don’’t mak make e money,andthat money ,andthatstig stigmaex maexist istsforagoodreason.Y sforagoodreason.Youneedtobeable tochangethat.
44BANKROLL2ED_TomMalloy
What Is Their Background? ItgoesagainsteverythingIsaidinthebeginning ItgoesagainsteverythingIsaidinth ebeginningof ofthischapter thischapter,b ,but ut partofthequalicationprocessislookingatwhothepersonis.For instance,onetimeIwasinvitedtobeintroducedtoa“nancier.” Heshowedupinabeat-upoldconvertible,wearingsweatpantsand asw a sweatshirt.He eatshirt.Hewas wasalso alsomissing missingsom some ete teeth. eth. No Now w,he ,hecou couldhav ldhave e beenan“ecc beenan“ eccentricmil entricmillio lionaire naire,,” soI to tookal okall ltheinitial theinitialsteps steps,but ,butI I foundoutrightawaythatthisguywasjustawannabe.Heactuallysaidtome,“ allysaidtome ,“Loo Look,thego k,thegoalforall alforallofus ofusis isto tooned onedaynothav aynothave e toworkoutsidethelmbusiness.”Turnsoutthisguyhadanother full-timejob.Isaid,“Well,Idon’tworkoutsideofthelmbusiness,” andhejuststaredatme.Canyouguesswhathappenednext?That’s right…hestartedpitchingmeontwoscriptsthathehadwritten. Appearancedenitelyplaysanimportantrolehere.Doyouknow wherethepersonlives?There’sabigdifferencebetweenlivingin BeverlyHillsandReseda.There’sabigdifferencebetweenlivingon theUpperEa theUpp erEastSideofManhatta stSideofManhattanandin nandintheSou theSouthBronx thBronx.A .Again, gain, therearealwaysexc therearealwa ysexceptionstotherule, eptionstotherule,butIhavefo butIhavefoundthatsimple undthatsimple thingssuchaswhatthepersoniswearing,whereheorshelives,and whatheorsheisdr whatheo rsheisdrivingdomak ivingdomakeadif eadiffer ference ence.O .Oneofmyinv neofmyinvestors estors hasabouteightcars,includingaLamborghi hasabouteightcars, includingaLamborghini,whi ni,whichhewas chhewasdrivdrivingtherstdayImethim.RightawayIwasabletomakecertain assumptionsabouthim,includingthathehadenoughmoneytobuy a$250,000car. Anotherinvestor,whowasvisitingL.A.foronlysixdays,hadboth hisLamborghiniandhisFerrariowninsohecoulddrivethem aroundtown.That’sright,heactuallypaid$9000percartohave thembyhissideforhisvisit.Doyouthinkthisguyhassomemoney tothrowaround? Yetanotherhadag etanotherhadagiganticloftin iganticloftinManhattan. Manhattan.Thethinghadtocost Thethinghadtocost him$6–7million!Ofcourseaguylikethatneededataxwrite-off, and,thankstoSection181oftheJobCreationsActof2004,lm investmentisataxwriteoff! LosAngeles is all abo LosAngeles about ut imag imagee. .I I fo foun und d th that at ou out t qui quickly ckly, ,be becaus cause e Imovedintoahousethatwasgigantic,andIdidn’tupgrademy
WhatNoOneElseCanDo45
car.I’mnotreallyacarguy,soIkeptdrivingmyChryslerSebring becauseitwasreliableandworkedforme.Whathappened?Well, whenIshowedupatevent whenIshowedup atevents,noonethough s,noonethoughtIwa tIwasim simpor portan tant.(Y t.(You ou’’d have hav etopul topull lup upin ina aBMW BMW,Au ,Audi,Mercedes,Ben di,Mercedes,Bentley tley,AstonMa ,AstonMarr tin, Ferrari,orMaseratiforthat.)But,whenpeoplevisitedmyhouse, theythought the ythought I Iwasrolling wasrollingin init. it.T Truthfully ruthfully,I ,Itsomew tsomewher here einbeinbetweenmycarandmyhouse.Ifsomeonewasqualifyingmeandhe cametomyhouse,hewouldthinkIwasamillionaire!Ifsomeone wasqualifyingmeandIshowedupataStarbuckswithmy2004 Sebring,hewouldthinkIwasfullofit.Eitherwayhe’dbewrong. Thatoldconve Thatoldcon vertibleis rtibleislo longgone nggone.I’ .I’veupgrade veupgraded dmycar mycartoahightoahighendAudi,andnowpeoplethinkdifferently. Moreoftenthannot,your Moreoftenthannot,you rinitialassumptio initialassumptions nsaretr aretrue ue.If .Ifso someo meone ne has to wor ork k an anot othe her r jo job b ou outsi tside de th the e lm bus busin iness ess an and d co consi nside ders rs himselforherself“intheIndustry,”heorsheiswrong.Theonly peoplewhotrulyretainthisstatusarethoseworkinginitfulltime. There’snomiddlegroundforlm.Actorsandwriterscangetaway withworkinginrestaurantsorbars,butproducershavetobe100% committed.Andtherealactorsandwritersareworkingasactors andwriters.
Never Pay a Fee HowdoIknowthis?Yup,youguessedit.Ilearnedthisonethehard waytoo. I met wit Imet with ha agroupout groupout ofNe ofNewY wYorkCitythat wasgo wasgoingtotak ingtotake e my1 my 15%equity(whichIhadraisedmyself)andstructurenancing tomakeit tomak eitaf afull1 ull100%budget 00%budget.(Structuring .(Structuringcanwork canwork.SeeChap .SeeChapter ter 17:The 7:TheStructuredAp StructuredApproa proach. ch.) )Her Here ewas wasthecatch:This thecatch:This comp company any requireda$60,000“advisoryfee.”Ican’tbecleareraboutthis:Ifanyoneasks onea sksfo for ran anadvisory advisory fe fee eor“ or“consultant consultantfe fee, e,”R ”RUN UNin intheother theother direct dir ectio ion! n!No No on one ele legit git(atleastwho (atleastwhom mI Ikno know)tak w)takes esan any yupfront upfront fees.Feesaregivenoutoncethenancingisachieved.Andtrustme, nooneforgetsaboutfees,Infact,youhavetoavoidthehundredsof peoplewhowil peopl ewhowilltr ltrytojumponyour ytojumponyour“ “moneytrain moneytrain”o ”onceyo nceyourlm urlm isnanced.Butupfrontfeesdonotexistinlegitimatenancing.
46BANKROLL2ED_TomMalloy
Intheabove-mentionedstory,Iendedupgivingthisgroup$60,000, andtheydidnothingformylm.WeeventuallydissolvedtheLLC, pickedourselvesup,andstartedfromthebeginning.Itwasahorriblle lo rib loss ss of na nanc ncing ing.This .This co comp mpan any y kn knew ew th that at we ha had d so li littl ttle e moneywithwhichtosuethem(rememberthelessonaboutsuing bigcompanies),andsincethelegalprocesstakessomuchtime,that we wou ould ldjust just wa walk lk aw away ay.Which .Whichis is ex exactl actly y wh what at we di did. d.Less Lesson on learned…thehardway. Never Nev erpa pay yan any y upfront fees ees!Y !You wan want ta aco consul nsultant tant?This ?Thisbo book okis is your you rconsultant.Y consultant.You ou’’vepaid vepaida alotles lotless sthan than$60 $60,,000 fo for rsomehardsomehardwonadvice. Look,, I’ve be Look been en hir hired ed as a co consu nsulta ltant nt at tim times es. . So Some me pr prom omin inent ent entertainm ent ertainment entatt attorne orneys ysco consult nsult. .So SoI’ I’m m no not t agai against nst co consul nsulting tingin in general.Butpleasenotethatnoneofuschargeanywherenearthose exorbitantfeesandareusuallyjustafewhundredbucksanhourfor valuableinfo.Anylumpsumenormous“advisoryfee”(justwriting thosewordsmakesmecringe)isbadnews. Remember,qualifyyourHNI,andmakesureheorsheisreal.Then moveforwardwithallthetechniquesinthisbook.Ifandwhenyou getalmnancedsuccessfully,you’llhaveseparatedyourselffrom thepackalreadybybeingabletoachievewhatnooneelsecan.
