American Film Market 2011 conference: unofficial notes
Nov 7, 2011 11 AM: Production Conference notes part 2, "Agents and Packaging"
Notes by B. Hahne
The original blog location of these notes is: http://2011afm.blogspot.com
This is day 4 of a 5-day series, check back at the blog for more as the days go by.
Clarifications or pithy comments by the note-taker will generally appear in [square brackets like this].
These notes are copyright (c) 2011 by Bruce Hahne. Noncommercial, nonprofit redistribution and/or pointing people to the blog is permitted and encouraged.
Disclaimers: "Free notes, you get what you pay for!" There notes are a summary, not a transcript, and represent my best effort to capture the panel discussion plus Q&A. They also probably contain errors. I'm not in the film industry, nor am I affiliated with AFM / American Film Market or with any of the firms associated with the panelists.
Moderator: Paul Hertzberg, President/CEO, CineTel Films. Paul is also IFTA chair (!)
Jay Cohen, Head of Packaging and Finance, Gersh Agency. Consults on indep films and works on finance. Works with equity funds.
Gary Randall, Co-founder, Boardwalk Entertainment Group, a production + media company. Executive producer of Saving Grace.
Rena Ronson, Co-Head, UTA Independent Film Group, United Talent Agency. Works on global film finance for independent + co-financed productions. Formerly with William Morris working on finance + distribution for >500 titles.
Hal Sadoff, Head of International + Independent Film, ICM. Formerly in the banking business. Formed Cobalt Media, which does film financing.
Eric Schotz, President + CEO, LMNO Productions. 9 Emmy awards, producer/director for non-fiction + reality TV. "Kids say the darnedest things" etc.
Paul: About "packaging" - we'll discuss that from agent and producer view.
Paul: And BTW I have pre-production artwork from my upcoming movies:
- The 12 Disasters of Christmas
Paul: to my panelists, what's your definition of "packaging"?
Rena: Let's talk about what the agents on this panel do. "Packaging" and "finance" are similar. We work with filmmakers. Packaging is the director, talent, script, etc. all of that coming together to get financing.
Hal: And typically we don't get involved until at least one of those elements is involved, not just a script.
Eric: I'm on the TV side, it's different. To "package", somebody has to add value to what I've already got. If I wrote it and my agent is in the room and I cut a deal, that's not a "package".
Hal: for indy films, our role is like an exec. producer. We don't get credits for it but we play a similar role.
Paul: Difference between TV and film packaging?
Gary: In TV if the agent makes one call, they claim they get to call that a "package".
And then "package" is 3% of license fee, with another 3% deferred, and 10% of modified adjusted gross, and the agency gets to define "modified adjusted gross".
[Gary being pretty hostile here, he seems to have had some bad experiences in the industry.]
Jay: It's putting together elements to allow the TV show or film to get made.
Rena: in film it's a different dynamic, we might work on a film for 12+ months, you can't compare to TV packaging, it's not my area.
Jay: there would be many TV producers who do need packaging, Gary here doesn't.
Jay: When we put movies together we go to other agencies for help. We represent 7 equity funds who invest in movies. We try to be agency-neutral, we'll put money anywhere, our investors don't care. We work with ETA, UTA, etc. [Need to look up these different organization names - too many TLAs]
Hal: Our clients are the projects, we work to put them together in the best way to get them financed.
Paul: How many films do you package in a year.
Jay: We work on 25 movies at once. Last year we had 40 movies at once.
Rena: "working on" is different from "putting together". We got 14 into Sundance and 3 into Cannes, but we have a team of people doing this.
Hal: 15-20 films/year get made, and 30-50 "working on" at any given time.
Paul: Shortest and longest-duration packages you've worked on?
Rena: I had one that crossed my job change, 2 agencies. 7 years, went through 3 directors and different casts and finally it's showing now in N. Carolina.
Jay: Client said he wanted to do an all-improv comedy. One of our equity clients said yes, we'll fund that. There was no script. Took us 3 months.
Rena: It can take 12 months, 18 months, depends on the budget, the names [stars], you may have to wait a year for somebody's schedule.
Hal: Could take several years - took 5 years to make Crazy Heart because different elements shift in and out [of the project.]
Jay: Film is different from TV. In TV you always have a need for product, in film you can live off your libraries.
Gary: That's insane, you can't keep going forever on just your library for long.
Gary: We're now packaging our own features. We raise our own independent financing. We determine our distributors, we're doing our own thing. We ARE sometimes working with packaging agencies.
Paul: You went from being an agent to being a producer - what are you working on?
Gary: I went from agent to producer because I didn't want to be the suit who showed up on the set and was "the lunch guest" - I like getting my hands dirty, I like figuring out the material and how to finance it.
Rena: We get to do that stuff too, it's a good job.
Gary: Right, the indy side is different from the mainstream packaging.
Eric: The blame for crappy packaging usually goes to the producer, they never blame the agent. Just saying.
Gary: Head of Columbia Pictures at one point banned packaging, he said "we won't do it". That job didn't last long.
Eric: A good agent is making your project better, that's the end goal, they're bringing something to the table that you can't get, whether it's TV or film. "Can you bring me a writer or director that I can't get?", that's what they do.
Gary: We did some work with CAA and they did some packaging for us, that helped. There have been other circumstances, primarily in TV, where the agents have overreached [in their demands?]
Rena: We're talking here about clients who need our help. Gary, you're a producer who knows how to do it, you don't need the assistance.
Jay: Even some of the more successful producers don't know how to make a $10M or $6M film, they come to us for help. For indy films we do offer some leverage, we're doing business with a lot of buyers: China, Qatar, Europe, etc.
Paul: What budget ranges are best for packaging success? Easier to get financed.
Hal: Big disparity in budgets - lots of films under $2M now, with bigger talent.
Rena: Crazy was made for under $2M.
Hal: Homework went at Sundance, sold to Fox Searchlight, went onto 600 screens, made for under $2M.
Eric: Do people [talent] want to be associated with $200M films or $2M films?
Hal: studios are focusing on giant tentpole films, Batman etc., and a lot of talent is willing to do smaller-budget films.
Rena: We get a lot of good projects coming our way. And we show people how they can make their film for lower budgets.
Jay: You have to ask the business model for each movie. Budget is relative to the genre.
Rena: Lots of high networth individuals want to get into the business now and they'll put up $500K each, and they'll band together. And these films are starting to have success at Sundance.
Paul: Gary, how do you use music?
Gary: We're music-centric, affiliated with Sony, BMI, BMG, etc. Our music partners don't get much synergy from their parent corporations and are looking to film and TV to get exposure for their music. "Majors and Minors", kids show, financed by 4 music partners. We've got Justin Timberlake in a project, Casablance Story, P&A funding is coming from the music business. When we announced his involvement, we got an unsolicited call from somebody who had just sold her tech company for $400M and she's a fan. I thought it might be a prank call or somebody spoofing us. She looks like she might be legitimate and we're vetting her right now - we might have an angel investor.
Hal: Nowadays it's high net-worth individuals: people will put in $100K to several millions, and that's how most indy films are getting made these days. [Scary. This 1%/99% dichotomy is really coming out in a big way here at AFM.]
Paul: Talk about the back-end - what do you pay a packager?
Eric: I have no idea what they make. I have yet to make ANY money from any backend deal I've ever made.
Gary: As a former agent I can tell you the agent's definition of "back-end", and it's different from what the filmmaker thinks it is. We used to joke at William Morris we used to say that "our [moviemaking] clients are taking 90% of our income" [i.e. we want it all, not 10%].
Jay: We had a situation where we did the right thing for the client and didn't make anything.
Eric: We may hate agents, but I've never LOST a project due to a package.
Gary: And the CAA did help me on a kids show.
Paul: what do you charge, as agents, as a packaging fee on a film project?
Rena: % of budget, it depends on the budget. You need a greater percentage on a smaller-budget film. If we sell it, there's a sales fee.
Jay: Packaging is 1-3% and sales is 5-10% typically, but changes for international.
Rena: Every project is different. You can defer, waive, etc.
Jay: Recent project I'm working on, we did 100% of the budget, brought the whole team together. Packaging departments are expensive to run - we go to Cannes, we got to Toronto, we do a lot of work to learn what the buyers want.
Gary: As a former studio president, the problem we had with packaging was that we took all the risk and the agents get paid no matter what. At William Morris we said "we commission failures too".
Rena: We don't get paid unless the film gets financed.
Gary: But the movie hasn't made money.
Rena: Everybody else gets paid, the producer gets paid, are you saying we shouldn't get paid?
[This has turned into a panel fight over compensation in the packaging / agent industry. Moderator should be intervening but he isn't. Audience finally coaxed him to do something.]
Paul: What's the best way for our audience members to discuss a concept with you?
Jay: If you've never produced, go find an executive producer who can help you put your movie together. If you have a SF movie, get an exec producer to read the script and like it and say "I'll make some phone calls to help you make this picture."
Eric: In the history of all panels like this, nothing has ever been sold in the room. If you pitch something to me now, I don't know what to do with it. It's hard for us to take a cold pitch that comes from nowhere.
Hal: Right, we don't take unsolicited scripts, we work with exec producers who have relationships [are we sensing a theme here?] with us, we know htem.
Jay: In my previous role I'd go to places where I knew producers would be and I'd talk to them.
Gary: Everybody can make a movie today, everybody can put it on the internet.
Eric: We use sizzle reels to sell stuff. You can say "I have a 5-minute sizzle reel" - don't make it 7 minutes.
Jay: Yes, reality TV, people will spend lots of money to make 10 sizzle reels and see what sticks.
Rena: I'll take calls from producers I know [and not from people I don't].
Paul: Jay, talk about these 6 equity firms you work with.
Jay: They're all different with dift objectives. Some want senior investment, some what subordinated debt. We've funded 9 movies in past 18 months ranging from $500K up to $35M. Hedge funds. Our agency isn't full of big stars. We don't tell our investors what to invest in. We'll take money from X, Y, Z
Gary: You're not taking money from me. [Doesn't help that Gary is sitting right next to the guy whose industry he hates.]
Jay: We had a situation and we did the numbers for the star and the director, the star averaged $12M/picture and the director averaged $18M/picture, but we did the math and we needed $38M revenue to make it profitable, and we told the investors "do you really want to invest in this, we recommend against".
Hal: VOD starting to generate real revenues, so downside risk on indy films is going down, you can get real revenue now compared to a few years ago, and that helps the indy film business.
Jay: The packaging depts are changing as the industry changes, we're becoming more like producers. I can handle the numbers, but I still need somebody who can talk to actors and writers. We bring in creatives to help movies get where they need to go.
Gary: I think you've successfully replaced what the studios used to do.
Q: What are the key terms between producers and a sales agent?
Jay: depends on whether the sales agent is financing the movie, or is just representing the movie. 10-15% if they're not financing. If they are, then 20-25% sales fees. For the top tier agencies.
Q: Do the agents put up money in advance?
A: No, but we introduce you to people who put up money.
Rena: I've been doing some presales for producers recently. Quietly and selectively, with our relationships overseas. This gives us more leverage for the filmmaker when we make the package, we can say "we already have 50% of the funding for this film".
Q: Hal, I want an A-list actor from your stable, can you help us? [Boo.]
A: I'd look at the script etc.
Q: How do you want the package presented to you, if there are already elements attached?
Hal: We want at least one significant element attached, but it all begins with a script and have to believe that the script can attract talent, directors, etc at the budget that you want.
Jay: A well-known producer also counts as "an element" here.
Q: Do you agents explore co-production opportunities?
Hal: yes, that's a big part of what we do. Hotel Rwanda was UK - S. Africa - and other locations.
Q: How do I get a big-name producer?
Jay: look at the producers who make the type of movie you're making.
Q: I'm confused, getting mixed messages - do I start with agents, or start with talking to producers, or are you on the panel the actual producers, what to do?
Eric: There's no "right way".
Q: So no agents are taking submissions these days?
Rena: If we got email from 50% of the people in this room, what would we do? We'd be overloaded. You need to find somebody with a relationship with us who has made a successful movie.
Jay: There are only so many movies made each year. If a newcomer producer brings me a project, and somebody who has produced 10 movies does it, I have to go with the 10-movie producer, it's a time thing.
Gary: Hollywood is run by the assistants, that's the big secret. If you attend the mixers at the film schools, USC, align yourself with assistants at the agencies and get somebody to love your project, you will find what you need, you'll find the powerhouse support.
Rena: That's 100% true.
Eric: Everybody on this panel was an assistant at one point.
Q: I had a bad experience with a packaging agency. How do you keep them on timetable?
Paul: You said you have $4M already - you don't need a packaging agent, just make your movie.
Q: Yes but I think a better agency would have got me better stars.
Jay: I don't know where your money is sitting, but put it into Citibank Beverly Hills or Comerica or some entertainment bank, then you put some in escrow and make pay-or-play offers with drop-dead dates, you'll see that money spent very fast, it will happen. The trick is if it's offshore, people don't necessarily believe that it's really there.
Q: Re the "sizzle reel", explain that, what works?
Eric: Very subjective, they can be done for a lot of reasons. One might be for buyer. One might be a casting reel - "here are the people I'm looking for". It depends on what you're trying to sell. I try to have 1 thought per reel rather than 30 things going on. The reel shows your idea visually. For every idea there are a lot of people doing that idea, you need to show me
Q: Spec script selling? Now you seem to need a video, is that a necessity to sell a script?
Jay: First-time director or what?
Q: The script is good [yeah right] and want to look for people to do it.
Jay: So you have a spec script you want to sell. Publishers are now cutting trailers for their BOOKS to get people to buy their book. So create something, a one-sheet, a poster, whatever.
Eric: If you walk in with an amazing reel, the chances of your script being read are orders of magnitude higher.
Hal: We're seeing sometimes millions of dollars coming from VOD now, which is making a difference, people are willing to pay for that, there's a floor value from VOD.
Q: So that works if you do theatrical also?
Hal: there's day-and-date, all kinds of experimentation right now.
Paul: We had huge VOD larger than box office on one of my films, larger even than DVD. People might have been embarrassed to go see this particular movie in the theaters [cough cough, this is the type of movie his studio makes, weird slasher and disaster stuff]
- What do you look for in a script?
- I've shot an instructional video, does that build credibility for directing a feature film?
Jay: The instructional video won't help for feature, it doesn't help us convince actors. Re script, if you give me a period drama, go away, I'd be shot.
Q: I usually do action + horror.
Jay: OK you're in the right place.
Gary: If you're a filmmaker, make a trailer.
Eric: And don't tell us how much you suffered to make your previous video, it doesn't help your case.
- Series of fantasy books similar to Harry Potter, is that an idea you like?
- Do I need a script?
Jay: Source material gets you in the door - graphic novel or series of books. We aren't in the development business.
Rena: We have a book department, that's what they do - they did Twilight and The Host.
Eric: My problem is people pitching ideas when they don't have the rights to make the movie from the book. Do you have the rights?
Q: We're hopefully signing today, this afternoon.
Panel: No, that's the problem, it's the "we think we're signing today" thing, you get it signed and then talk to [people like] us.
[This is turning into a non-Q&A session in which every person with a "question" is really looking to pitch their project, they want help making their movies from the panelists specifically. Questions are too project-specific.]
Q: - I've done 100 projects already. Do I need a sizzle reel?
Jay: probably not if you've done all the things you've done
Q: In the packaging process, how important is soft money? Do you get involved in where, physically, the film might be shot?
Rena: it makes a difference. and Japan is down, Spain is down, they're not buying, so soft money is becoming more important. We might suggest that you shoot in Canada, etc. That's part of what we do, help you do the film in the best way.
Hal: We know all the incentives for the venues, that's what we do.
[Discussion about where their various projects are shooting due to tax incentives.]
Q: I've shot the entire film on SD, 2 years in S. Africa, we have the foley etc, it's a spec piece so that we can make the movie [in HD]. I got told "you're a first-time director, we don't like that". What are the chances that I'll be kicked off the project?
Jay: Nobody can kick you off your own project if you own the rights to your material.
Eric: Do you want to MAKE this movie, or DIRECT this movie? Are you willing to stand down so that you can your film? That's your question - maybe you're now the producer, not the director.
Jay: I had exactly this situation and had to tell a director to step down and become a producer, we had to have a Latino director. He chose to step down and the film went forward.
Eric: But if your goal is to be the director, then chase your passion.
Q: Re assistants. How do I become an assistant? In the agency world.
Rena: Every agency has an HR department and training, we're always taking applications.
Jay: And if you don't need money for a while, work as a free intern for a few months and you're generally guaranteed an assistant job.
Gary: Stay away from the WME - they have lots of assistants and promote very few of them.
Q: What should be on my resume to work on your teams as an agent or assistant?
Jay: Film school might be a good start.
Eric: There's no single path ABC. Don't become an agent unless you like to read, that would be a bad choice.
Q: I can't get my calls returned for this book I've optioned, what should I do?
Hal: Normally you go to literary agents within the agencies, or the book departments - that's not us.
Q: [This is a panelist from a previous day] Do you recommend having a top sheet on your package that lists your genre and historical box office / revenue for this genre?
Rena: Good idea, anything to help us out, our attention spans are short.
A2: But don't make up figures, that will come back to bite you.