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Donald Zuckerman: Indie Film Finance


by Nelson Goforth

Colorado Film Commissioner Donald Zuckerman’s presentation on independent film financing drew a large crowd to the Sie FilmCenter on February 4. Packaging and financing were the focus of his talk. His target audience was producers, though the audience contained filmmakers of all stripes, and at least one gaffer who wants to better understand how this part of film production works.

The numbers that Mr. Zuckerman was discussing were an order of magnitude higher than the budgets most of the audience were accustomed to - witnessed by some sharp gasps as he worked his way through budget line items. For filmmakers accustomed to ‘deferred payments’ and guerilla shooting, the need to come up with a quarter-million-dollar guarantee to get a star came as a shock, and the need to get a star at all provided a healthy dose of reality. Movies can be made for thirty-thousand dollars, but the chances for distribution are very low without a recognizable star (though, he noted in discussion after the presentation, there are some ‘genre’ films - horror, martial arts - that can find distribution without star power, though the competition there is fierce). “If you make a movie,” stated Mr. Zuckerman, “and don’t have a star in it, and you then get no distribution for your movie, no matter what you spent on the movie, it probably not that worthwhile doing it.” A lot of ultra-low-budget films, having taken up vast amounts of filmmakers’ resources, end up sitting on a bookshelf, or are given away for free on YouTube — Mr. Zuckerman’s discussion focused on making films that can get distribution.

A film “package” means: script, director, star. To get the star a producer needs to have the first two elements in place. A script alone will rarely get the attention of agents or their actors. To get the star, too, a producer must make an offer, often in the form of a pay-or-play guarantee - if the project fails to happen, the star still gets paid. Getting the star is the key to financing a film, but getting the star requires a substantial amount in itself. To come up with that money, money that is committed and spent months before production starts, requires up-front financing, an investor.

“If you want to make a movie for a couple hundred thousand dollars,” said Mr. Zuckerman, “how to finance it is pretty simple - you find a rich person. If you want to make a movie for a couple million dollars you still need a rich person, but they don’t have to use as much of their money...”

That “rich person” is an equity investor - they own a piece of the project and are at risk if the project fails to make money, or if it fails to get started (the guarantee). Mr. Zuckerman detailed how to leverage the equity investments so that those investors are not paying for the entire production. He noted four places that funding can come from: monetized pre-sales to foreign distributors, state rebates, bank gap loans (and, in the case of Colorado, loan guarantee), and equity. Banks, agents, foreign sales companies - all are going to ask to see the Finance Plan for a film: where will your financing come from?,/p> Sample Finance Plan for $8M feature

Sample Finance Plan for $8M feature

Mr. Zuckerman spent the last half of his presentation going into some of the arcana of film finance - finance plans, foreign sales companies, gap loans, bonding companies, collection account management agreements, and more. The complexity of the deal-making involved became more evident as he provided real-world examples from one of his films, Not Forgotten.

Touching on budgeting for post, test screenings, film festivals and the importance of sales representatives, Mr. Zuckerman concluded with a warning that the process is very complex, and takes years to learn. He advised prospective producers to put a package together, find some initial funding, and to find a partner who has some experience to help guide them. There are finance people looking for packages, who are competing for good packages, and partnering with one of those people can make a complicated job less difficult.

Mr. Zuckerman’s talk was recorded by the Colorado Film School, and can be seen in slightly edited form on YouTube:

Donald Zuckerman is the Film Commissioner for the State of Colorado and has led the effort to boost film incentives, and thus film production. He has produced a number of feature films, especially with director George Hickenlooper, including Casino Jack, The Man from Elysian Fields, Not Forgotten, and Dogtown. See his IMDB listing for more detail

Nelson Goforth is a gaffer, electrician and grip with over twenty years experience on films and commercials big and small. He is a Red Epic owner, and has lately fallen so far as directing and shooting shorts, including the film noir “Web of Lies”. He has been a member of CFVA for a long, long time. IMDB:Vimeo: