GADZOOK FILMS Producing independent film in Seattle, Los Angeles and beyond.

2Oct/08Off

How does this economic crisis affect you?

I've been talking with a couple filmmaking friends of mine about this bailout crap. OK, cutting through the mumbo-jumbo and what it means for your money, what does it mean for your future potential financier's money? More to the point, if you're looking for financing how is the disaster at Wall Street gonna affect your chances of finding it?

Well, let's try and lay it out. If you know or knew investors personally then you're going to have the best chance of convincing them to part with their hard-earned dollars. This was the case before the collapse of Wall Street and it'll be the same long after this hullabaloo is over. The most difficult piece of the puzzle has always been finding the investors - those people with enough money to drop into your production and not bankrupt themselves if they lost it all. If you know a person like this, now's the time to talk to them about diversifying their portfolio with non-stock market investments.

If you don't know a person like this, now's probably not the best time to approach an individual who may be wealthy but also may be undergoing cash flow problems due to the economy. They are looking for safe options and probably can't or won't take a chance on someone they don't know who can't (legally) guarantee them any return on their investment. Most financiers have their money tied up in the very things that are tanking right now. Many of these things are not insured due to their speculative nature. Even real estate is taking a hit. It won't be as easy for folks to draw out their assets or borrow against them.

So what do you do? My suggestion? Brush off those scripts you had that you know you could make for say $100k or less. Scripts with budgets that are modest enough that you could feasibly find a few accredited investors who have maybe $10-15k in liquid assets that can come together to finance the project.

But better yet, make videos for the 'net. Production values aren't as important, but story is. Hone your craft, focus on telling a good story and make it memorable. This will build your audience and help you find future investors down the road when the economy is back on its feet.

While the "rescue" (don't you dare call it a bailout!!) plan is very, very, very far from perfect, there are some aspects that are beneficial to filmmakers. Richard Verrier at the LA Times had a story on those pieces. To whit:

Specifically, the legislation would allow filmmakers who shoot in the U.S. to qualify for a tax deduction granted in 2004 to domestic manufacturers that capped the top tax rate at 32% instead of 35%. Additionally, the tax package lifts the budget cap on the existing tax deduction, which was limited to movies that cost less than $15 million to make -- in effect excluding most studio films, which cost a lot more.

Now producers would be able to immediately deduct all production costs up to $15 million, regardless of the movie's total budget. The change also extends the existing credit, which was due to expire this year, to December 2009.

Don't get excited yet, friends. The bill still has to pass the House who shut it down last time it came through. It's tough to support such a dastardly bill simply because it offers support for us filmmakers, but it is good to know there is some consideration being taken (although this has more to do with major studios than Jane Filmmaker).

What do you think?

Posted by Dom

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