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(Photographer: Dimas Ardian/Bloomberg), EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, Michigan Economic Development Corporation With Forbes Insights. We are accepting for consideration indie films in post production or in the film festival circuit. [12], Movie production incentives in the United States, "Inside the WGA: Even at $400K a Week, a Million Insecurities", "DGA Rate Cards 2012 - 2013; Minimum Salary Schedule", "Forbes: DiCaprio Beats Depp for Title of Hollywood's Highest Paid Actor", "The Smoking Gun: Archive: The Sixth Sense", "Budget for Tomb Raider-2 With Angelina Jolie", https://en.wikipedia.org/w/index.php?title=Film_budgeting&oldid=992609273, Articles with unsourced statements from June 2014, Articles with unsourced statements from January 2016, Articles with unsourced statements from August 2018, Creative Commons Attribution-ShareAlike License, This page was last edited on 6 December 2020, at 05:09. For example, above-the-line costs include the costs of acquiring the underlying rights, script costs, producer fees, and payments to key talent (director and main actors). To illustrate this, I have calculated how much larger a film’s box office gross was as a multiple of the marketing spend. Exceptions have of course been made, one of the most notable examples being Titanic (1997). THE FILMMAKER’S ULTIMATE GUIDE TO VIDEO & FILM DISTRIBUTION Short film distribution. Negotiating With a Film Booker. if a film spent £1 million on marketing and went on to gross £3 … The good news was that because of the budget/sales corollary, the pre-sales increased by more than enough to cover the increased budget. Film budgeting usually occurs in two different phases. As a result, the market for low budget films (with budget of $10 million or less) is relatively healthy because they can be potentially picked up for digital distribution with funding up … By. I am a partner in the corporate entertainment department of Greenberg Glusker, practicing entertainment, corporate, and tax law. You have to do the research and hard work, even when you have a deal with a great distribution company. This was a presentation done for the Fairfax Filmmakers Club. But there are also some memo… When all else fails, one irresistible tendency is to greatly exaggerate the true budget in order to jack up prices. I soon learned that the budget was really $12 million, and the producer had received a “producer fee” of $2 million, which was included in the budget. The net result is that any proposed increase to a film’s budget has a ripple effect that can more than double the proposed increase. 79 Wellington Street West Suite 1630, P.O. In general, the budget includes all costs relating to the development, production, and post-production of a film. )… The Los Angeles Times presented an extensive special report, dissecting the budget of the 2005 film Sahara. Image via Flix.org.uk A booking agent, film buyer, or film booker negotiates the lease terms for films from the Big Six and beyond. The distributor sells your film to retailers, but YOU have to sell it to the fans. Again, the tentacles of the budget/sales corollary at work. For low budget film with distribution. Go figure. Above the Line, Below the Line, and Other. There are also several interesting inclusions and exclusions, discussed below. I am a partner in the corporate entertainment department of Greenberg Glusker, practicing entertainment, corporate, and tax law. Though movie studios are reluctant to release the precise details of their movies' budgets, it has occasionally been possible to obtain (clandestinely) details of the cost of films' breakdowns. A sales agent will be able to provide you with some sense of the estimated value of the film before he or she brings it to the film market and festival circuit. The Bigger the deal the less control you have. Film financing can be acquired from a private investor, sponsor, product placement, film studio, entertainment company, and out-of-pocket funds. Once I got my brain around this, the rest was easy. The completion guarantor will then make everyone sign in blood that they can live with the budget. © 2020 Forbes Media LLC. Filmmakers with a movie “in the can”, or close, looking for a distributor are encouraged to contact us via the filmbudget.com website Contact Page. When I first heard this, it really threw me. Many film budgets come in a bit lower, ranging from $100 – $150 million. There are several miscellaneous items that arguably should not be included as part of the budget, but are. LOW-BUDGET FILM DISTRIBUTION: A PRIMER FOR INDEPENDENT FILMMAKERS. It often only provides the top … Sooner or later, the budget will be handed to the lender with a request to fund the budget. Box 138 Toronto, ON M5K 1H1. Contact Email. While the US system is profitable and can afford to go over budget, some other countries' film industries tend to be financed through government subsidies. In this range, we see a lot of movies many would consider… well, pretty average. Securing traditional film distribution for your film is doable. In the leasing model, the distributor agrees to pay a fixed amount for the rights to distribute the film. [1] One of the consequences of the Sony hack was the release of budget information of many films or TV shows, including the 2015 Adam Sandler film Pixels. The above-the-line costs include the costs for the rights, producer, and talent. Don’t let your low-budget … Director of photography Edi Santoso, right, during, the production of the film “Sin” in Jakarta, Indonesia, in February. I have been named (a) one of the top 100 entertainment lawyers by the Hollywood Reporter, (b) one of the top 25 entertainment lawyers by Variety, (c) one of the top 100 lawyers in California by the Daily Journal and (d) one of top 3 "Most Influential Lawyers" in media by the National Law Journal. Presented by Tim Morell of Morell Media. As with producer fees, this is just a disguised way of making a profit on the film. For example, if talent is paid $20 million up front, that amount will be included in the budget. ), and other (insurance, completion bond, etc.) The reason that these categories are relevant is that several items (such as insurance premiums and completion bond fees) are often calculated as a percentage of the budget, but excluding all or a portion of the above-the-line costs or other costs. The contingency is included in the budget for purposes of the budget/sales corollary (i.e., upping prices), even though it may never be spent. (Witness anything done by James Cameron and Martin Scorsese.) The budget does include self-charged “producer fees” paid to the producer. [2] Even though Sony's out of pocket for the film was reduced because of the incentive, it does not negate the fact that the actual cost (amount spent during production to make the film) was still $129.6 million. As one stark example I worked on, a $20-million star was added to a $6-million film. The lender will, in turn, hand it to the completion guarantor with a request to guarantee that the film can be made for that budget. INDEPENDENT FILM DISTRIBUTION: A PRIMER FOR LOW-BUDGET FILMMAKERS. Producers often increase the budget for a picture by tagging on additional inflated “producer fees” or “overhead charges” for themselves, which are nothing more than a mark-up to the true cost of the film. I.e. A Business Plan, used for the purpose of raising funds from film … Presented by Tim Morell of Morell Media. When it comes to reporting the budget of a film, the amount of the budget represents the gross budget, which is the grand total of actual spending to produce the project and not to be confused with net budget, which represents the final out of pocket for the producer after government incentives or rebates ("If you pay $50 for something but have a mail-in coupon for a $10 rebate, your gross spending still amounts to $50."). Opinions expressed by Forbes Contributors are their own. For example, if the budget is really $10 million, the producer will charge and retain an additional $1.5 million to purportedly cover its overhead. There may be slight variations, but not much. Other costs include financing costs, the completion guarantee fee, and the contingency. Note: … All Rights Reserved. Dah. Once the upfront costs are paid and the film is released, … Formats Required for Theatrical Distribution. Contact Phone (416) 515-2222. A budget is typically divided into four sections: above the line (creative talent), below the line (direct production costs), post-production(editing, visual effects, etc. The below-the-line costs are basically all costs of production and post-production. I graduated from UCLA (Phi Beta Kappa, Summa Cum Laude) and UCLA Law School (first in class). I am the author of The Biz: The Basic Business, legal, and Financial Aspects of the Film Industry, a popular book in its 4th edition, Taxation of the Entertainment Industry, and What They Don’t Teach You in Law School. Note: Figures for 2020 are at an annualized rate. No kidding. What the sales projections say about what the film should cost to make, will suggest the right budget and the right distribution strategy to use for your level budget … Good luck. However, if you are an independent filmmaker you don’t want to get caught out … This, in turn, will have the completely crazy impact of reducing the amount that the film can be sold for because of the budget/sales corollary. And The Hollywood Reporter notes that the average cost of a feature film is even lower, spanning between$70 and $90 million. info@multiplemedia.ca. Address. Film budgeting refers to the process by which a line producer, unit production manager, or production accountant prepares a budget for a film production. Since … The film budget template takes you only to this level of funds, and so it is up to the filmmaker to use another form, such as the Film Financial Projections Template, to determine marketing, publicity, film festival and other post production costs. Each studio (and each movie really) has a slightly different allocation of budgeted funds, but they all generally share common line items or categories: Trailers: theatrical and internet for both Domestic … These film … The actual cost to produce Pixels, or the "grand total", was $129.6 million and the net budget for Sony came to $111 million after they received a government rebate in Canada that covered a portion of their gross spend (cost) in the amount of just over $18 million. For an example of a budget for a $2 million independent feature, see Planning the Low-Budget Film by Robert Latham Brown. Every budget includes a contingency for potential excess costs, always expressed as a percentage of the budget—usually 10%. A few taps on my trusty calculator reveal that A$1.1 million is to be the average feature-film budget (including distribution and advertising) – if our film industry is to break even. A more honest approach would be to say that the budget is $10 million, but the producer wants to make at least $1.5 million of profit. Movie budgeting contains the key information that you must have for your production. The documents had become public domain after a lawsuit involving the film. Without a properly prepared budget… There was a time when companies such as Cannon Films would create one-sheets (theatrical advertising posters) that the company would exhibit at the international film markets. This document, which could be over 130 pages long, is used to secure financing for and lead to pre-production and production of the film. Perhaps the most tangible aspect of a film’s budget is that the amount that distributors will pay for a film is almost always calculated as a percentage of the budget (the “budget/sales corollary”), regardless of the script, the cast or anything else. We will increase the budget by this amount, which should increase sales necessary to repay you because of the budget/sales corollary.” Most financiers go along with this. For example, if a film that really cost $10 million were sold for $12 million, to me, the budget was $10 million, and the producer had made a $2 million profit. The bigger the company, the bigger … Director James Cameron ran over budget and offered his fee back to the studio. , even film distribution budget you have to do the research and hard work even!, completion bond, etc. in blood that they can live with the completion more! Consideration indie films in post production or in the budget of the budget/sales corollary at work the prices distributors pay. 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