It is neither the best of times nor the worst, as the climate for indie film financing steadily improves after drying up in the 2008 global financial meltdown.
That’s the consensus of panelists who will speak at the Winston Baker Film Finance Forum East presented in association with Variety.
Executives say all the components of indie film finance are again available — bank loans, gap financing, bridge loans, mezzanine — for features that have a foundation of equity capital and also generated pre-sales traction. Equity is the highest risk layer of capital in film financing since it is usually last in line to recoup.
“There is not a great availability of equity right now,” says Michael Benaroya, chief exec of Benaroya Pictures. “But those with equity can drive more favorable deals” since other types of financiers are willing to step up once they see a fat cushion of equity as the foundation.
Hollywood can pitch equity investors that movies are an “alternative investment class” not correlated directly to the general economy. “You can find interesting opportunities in the film business,” says Teddy Schwarzman, principal of Black Bear Pictures. “It’s not tied into market forces.”
OddLot Entertainment chief operating officer Bill Lischak says distribs open doors wide to any partner with ready financing to co-produce high end films.
“There is a real opportunity to match the product with the talent to come with reasonably priced film projects,” Lischak says. “Even the major studios will become more flexible and expand opportunities for independent producers.”
In the aftermath of the 2008 meltdown, budgets shrank to sizes that many see as much more reasonable, given that prices being paid for films overseas had also taken a hit. “The problem was the foreign buyers weren’t buying for a while,” says Jay Cohen, head of film finance and distribution at the Gersh Agency. “They focused on local-language production, which was a much safer investment. Now they’re back strong buying global films, though there are still issues in Spain, Italy and Japan.”