Tax Credits - US Federal

http://www.filmsf.org/index.aspx?page=47
In October of 2008 Congress passed an extension of IRC Section 181 in order to combat runaway film and television production. This tax code allows for qualifying productions to immediately write off up to $15 million for tax purposes.

Remember not to include the tax credit in your film budget.

Check QuickFilmBudget.com for a sample film budget.

Buy or Rent - Camera

The Camera Package is usually a large line item in your film budget. Motion Picture Cameras are one of the few items in a film production that can be reused. Obviously, food cannot be reused. Film stock cannot be reused and unused film stock has a ticking shelf life. But cameras can be used and reused no matter what kind of story is written or actors are cast. A way to amortize the cost of a camera package is to use it for multiple films. There are several questions you must ask yourself before you make the decision to buy or rent a camera.

1) How many films do you realistically expect to make?
If you only plan to film two films over the next decade, it will not make sense to buy a camera because it would be less expensive to rent a camera.
2) In what time frame?
Digital camera technology is constantly changing. If there is too much of a time lag between films, your digital camera may become obsolete. If you buy a motion picture film camera, it will cost you to maintain the camera. You can rent out the camera when you are not using it but you run the risk of it being damaged or not being available when you need it.
3) Do you plan to use digital tapes or film stock?
Film stock is much more expensive than digital tapes. Also, the cost to develop film and create the film elements is much more expensive than a DI. Be careful that your story will not be hurt by using digital cameras since some natural elements like light, fire, and water sometimes distorts on digital tapes.

Check QuickFilmBudget.com for a sample film budget.

Production Food

Craft service refers to the catering done for the cast, crew, and extras working for film and television production companies. A craft service table is a table of snacks set up either on set or on location. Cast, crew, and extras choose snacks and beverages from the table buffet-style.

Full meals are not usually provided on set as there are often many restaurants in the area and studios have at least a coffee shop. The lunch break is typically an hour, unlike the half hour usually given for on location shoots. Situation comedies, or sitcoms, do typically provide catered hot meals once a week, on live taping days. The cast, crew, and extras eat a few hours before the show starts taping.

Craft service items vary widely depending on the production firm's film budget. Most craft service tables include a mixture of 'junk' food such as chips and doughnuts as well as sandwiches, fruit or vegetable platters, cheeses, muffins, and pretzels or microwave popcorn. Usually hot water is available to prepare instant soup and hot chocolate mixes as well as tea. Most craft service areas include urns of coffee as well as sodas and juices. Breakfast craft service offerings usually include fare such as bagels, toast, muffins, cereal, peanut butter and jelly, juices, and coffee.

Sometimes catering trucks are used for bigger productions with a lot of extras. The extras may or may not get sandwiches from a craft service table while the cast and crew receive hot meals. Screen Actors Guild (SAG) members wait in line before other extras, and cast and crew wait ahead of all extras. This is not purely a matter of ranking order, but also scene scheduling. Extras, unlike the cast, and especially the crew, are not needed on set all of the time.

Check QuickFilmBudget.com for a sample film budget.

Legal Structure

When you make a movie, you are also starting a new business. Every business needs a legal structure, films are no different. The options are LLC, LP, Corp. Sometimes you may even create all three for one film.

Here is one legal structure that is sometimes used: form a Limited Partnership with a Corporation as the managing partner. This protects your investors, who are Limited Partners, and you, who act as the managing partner through your corporation.

A good lawyer may be expensive, but they may also save you money in your film budget in the long run.

Check QuickFilmBudget.com for a sample film budget.

Film Insurance

Feature film insurance is a unique type of insurance where practically all aspects of production are covered – from film negatives to the unstable actors who frequent rehab. The careers of insurance agents too segue into a film’s production. When shooting starts, they often become detectives, human resource managers, and location checkers.

Fireman's Fund, the biggest insurance provider of Hollywood films, sent out people to check to the shooting location of "Into The Wild" to check if any of the film’s staff could be airlifted to a hospital. Fireman's also went to the overseas shooting locations of "Bourne Ultimatum", making sure that the film used in the shooting the feature film didn’t get destroyed by x-ray machines at the airport. At the Chubb Group, another insurance provider, agents read scripts to check if there are any scenes that would require actors to be in proximity of any explosion.

Feature Films insurance can take up to 2% of a film budget.

Check QuickFilmBudget.com for a sample film budget.

Producing for a Studio- Tip# 3

When you are looking for a project or script to sell to a studio, there are only two financial aspects to keep in mind.
1. Studios do not want to hear a script described as "low budget". In general studios think low budget means low production value. Audiences want their money's worth at the theaters. So they want to see something that they don't think they could have filmed on their HD camera with some friends over the weekend. Readers may point out the obvious successes like "Paranormal Activity" and "Napolean Dynamite" but you have to remember that they were not produced by a studio but rather acquired as a finished film by a studio.
2. Studios like hearing that a story takes place or can be shot in a state with an attractive tax credit, like New Mexico or Louisiana. These states can offer as much as 35% back on money spent there. Remember that such tax credits do not show on your film budget.

Visit QuickFilmBudget.com for a sample film budget.

Producing for a Studio- Tip# 2

An important thing to remember when you produce films for a studio is to remember who is really running the show. Is the director the driving force behind the film? Is there an "800 pound gorilla" producer who is really running the show and you are there for the ride? Does an actor hold all of the cards? A quick way to find out who is running the show is to check the film budget to see who is getting paid the most or on passion project who is getting paid well below their quote. Since you are already a credited producer with a salary, you don't need to fight for power on the set. Every person on the film has been assigned a role. Some roles have already been accomplished (like the literary manager who packaged the script with a hot director). If you have already done your part, then enjoy the ride.

Check out QuickFilmBudget.com for a sample film budget.

Producing for a Studio- Tip# 1

An arbitrator ruled that producers are NOT agents of the studios, and thus any rewrite a writer for a producer is outside the writer's contract with the studio. If a producer asks a writer to make changes in a draft, the studio is under no obligation to pay for those changes. If a writer wants to be paid, he or she should simply turn in a draft to the executive named in the contract and ask for payment. (Source: WGA.com)

Every payment to a writer needs to be accounted for in the film budget. Check QuickFilmBudget.com for a sample film budget.

Producing Credits

The allocation of your film budget to your producers depends on the negotiations. During such negotiations remember the definition of "the producing team" according to The Producers Guild of America:

"The Producing Team consists of all those whose interdependency and support of each other are necessary for the creation of motion pictures and television programs. The producing team is comprised of Producers and all those on the career path to becoming Producers, including:
Executive Producers
Producers
Co-Executive Producers
Supervising Producers
Senior Producers
Line Producers
Co-Producers
Associate Producers
Segment Producers
Production Managers
Visual Effects Producers, Supervisors, & Coordinators
Post-Production Supervisors & Managers
Production & Post-Production Coordinators
As a unit, the producing team is responsible for the art, craft and science of production in the entertainment industry."

For a sample film budget check QuickFilmBudget.com

DGA Theatrical Film Rates

Note the Theatrical Motion Picture Minimum Rates for DGA members for your film budget.

Rates effective 7-1- 2009 to 6-30-2010 Rates effective 7-1-2010 to 6-30-2011
HIGH BUDGET SHORTS & DOCUMENTARIES HIGH BUDGET SHORTS & DOCUMENTARIES
Weekly Salary $15,637 $11,169 $16,184 $11,560
Guaranteed Preparation Period 2 Weeks 2 Days 2 Weeks 2 Days
Guaranteed Employment Period 10 Weeks 1 Week + 1 Day 10 Weeks 1 Week + 1 Day
Guaranteed Cutting Allowance 1 Week 0 1 Week 0
Compensation for Days
Worked Beyond Guarantee $3,127 $2,234 $3,237 $2,312
Daily Employment
Where Permitted $3,909 $2,792 $4,046 $2,890

Check QuickFilmBudget.com for a sample film budget.

SAG Info

TELEVISION AND THEATRICAL 6/10/09 6/10/10
Day Performers:
Performer .........................................................................................................$ 782 $ 809
Stuntperformer .................................................................................................$ 782 $ 809
Stunt Coordinator (employed at less than "flat deal") .........................................$ 782 $ 809

Weekly Performers:
Performer .........................................................................................................$ 2,713 $ 2,808
Stuntperformer ..................................................................................................$ 2,913 $ 3,015
Stunt Coordinator (employed at less than "flat deal") ..........................................$ 2,913 $ 3,015

These rates are taken directly from the SAG website. You can use this information for your film budget.

Check QuickFilmBudget.com for a sample film budget.

WGA Info

Minimums for Low & High Budget Screenplays

Low Budget Screenplay Purchase Minimums:

The following are Screenplay purchase minimums for a Picture with a film budget of
Five Million Dollars ($5,000,000), or less:

Time Period Original Non-Original
5/02/09 - 5/01/10 $40,665 $33,093
5/02/10 - 5/01/11 $42,088 $34,251


High Budget Screenplay Purchase Minimums:

The following are Screenplay purchase minimums for a Picture with a film budget
greater than Five Million Dollars ($5,000,000):

Time Period Original Non-Original
5/02/09 - 5/01/10 $83,242 $68,105
5/02/10 - 5/01/11 $86,156 $70,489

Check QuickFilmBudget.com for a sample film budget.

Locations

Avoid filming in locations of famous or commercial areas. Shooting a scene on, for example, the Golden Gate Bridge, requires stopping traffic with a resultant drop in revenue to the city of San Francisco. Filming such a scene for Interview with the Vampire cost Warner Bros. $500,000. Shifting the location to the San Francisco-Oakland Bay Bridge for close-ups could save hundred of thousands of dollars in location fees in your film budget. Some locations are more willing to allow filming than others - commercial enterprises such as hotels and nightclubs. Some producers of low-budget movies avoid paying location fees and seek to capture shots by subterfuge.

Check QuickFilmBudget.com for a sample film budget.

Marketing

Studio marketing departments specialize in movies that fall either into one genre and one targeted demographic or one genre and all demographics. Just think about a horror film like "Saw" or a comedy like "American Pie". They each have a clear genre and are targeted at one demographic. A film may become more successful than expected if it ends up appealing to more than the targeted demographic, like "The Hangover". Studio marketing departments like these movies because the marketing plans have a simple message and only has to find one type of audience. The other end of the spectrum is a movie that one genre aimed at all demographics, like "Avatar" which was an action film aimed at everyone. The trouble happens when audiences can't tell if a movie is a horror film or a drama. It muddles the marketing strategy and can end up attracting none of the intended demographics, instead of both of them.

This discussion of marketing is relevent to filmmakers when you are writing or selecting your screenplay because the end goal is always to get a big theatrical distribution. Sometimes, you may need to market or distribute a film yourself. Some film budgets even include a line item for marketing and distribution. In deciding how to spend this marketing and distribution funds, you will realize why you can't market your film to everybody and should focus on one demographic like college guys or children or dating couples.

Check QuickFilmBudget.com for a sample film budget.

Selecting a Producer

Every film has its own story of how it came together. Not every movie starts with a producer and who likes a script. Sometimes, a director will find a script and will have to find a producer for the film. Selecting a producer is difficult because it is tough to determine what was their impact on the film. The creative vision is the director, music is the composer, editor is the timing and pace, cinematographer is the visual look of the film. So how do you know what the producer did? First, there is usually more than one producer on a film. Each producer got that credit for some reason, even if he/she was only the star's hairstylist. So you need to know what the producer's role on the film was. You may want to ask the other producers on the film as a reference. You should also talk to the UPM to see how well the producer organized the film through the shooting schedule and film budget. Look at the level of actors in the film. If the film starred Brad Pitt, the producer either has a strong relationship with Pitt or with his agent. Most importantly, you need to see if the producer gets along with people and can accomplish his tasks of delivering the film to the distributor.

Being a producer is like being a project manager. They need to get the best out of the team in order to deliver the best possible product.

Check QuickFilmBudget.com for a sample film budget.

Cannes Film Market

Whether your script or project is a low budget film or a blockbuster movie, studios, private investors, insurance companies and bonding companies will always require a budget. All of these financial sources will be at the Cannes Film Market taking place in May. These companies base their decisions whether to greenlight or finance a film or not on three pieces of information, 1) script, 2) actor and director attachments, 3) a film budget. If you are going or have a representative going, make sure that they are armed with a budget to accompany your script. Before you create your budget, make sure you know your targeted market. So if you know that you will be meeting with or submitting your project to companies who finance movies in the $10-$20 million budget range, then make sure that you have a movie budget in that range.

Check QuickFilmBudget.com for a sample film budget.

Craft Services

I usually recommend that filmmakers focus on spending their film budget in places that will show on the screen. However, the most underrated account for impacting the productivity and goodwill of the crew is craft services aka food! I once produced a film where in the middle of the shooting schedule, the crew started to become unhappy about the long hours of work. The next day when the crew arrived on set, they saw an expanded craft services table filled with everyone's favorite snacks. Their attitudes completely changed and everyone became much more productive. Food has that effect on people. Obviously, you don't need to serve caviar but bringing in Starbucks coffee once or twice and adding people's favorite snacks goes a long way.

Check www.QuickFilmBudget.com for a sample film budget.

Crew Loyalty

Every film requires a UPM. They continually modify and update the film budget, know who to hire from the local crew, and keep an eye on the overall production from a logistical point of view. UPMs should represent the interests of the producer by making sure the film finishes on schedule and on budget. However, producers and directors must remember who is running the show. The director is there to actualize his creative vision on film. The producer either represents the financing or is the financing source. Every position is crucial to the proper execution of the film from the UPM down to the PA. However, be careful when you film at a distant location where you need to hire a UPM because you don't know the local crew. One of the worst things to happen on a film set is for the crew to strike. If you hire a UPM to hire crew, the UPM actually has the potential to wield the most power on set because he/she controls the crew. This happens more frequently on low budget films where crew members are getting paid below their normal salaries. If the "goodwill" runs out, they will threaten to leave unless something changes. However, the key to avoiding this catastrophe is hiring enough people on your own so these crew members have loyalty directly to you. Also, make sure that you stop small problems or correct bad attitudes before they infect the entire crew. There is nothing wrong with firing someone for not performing their job.

Remember that crew members want to work and want to be a part of a great film. One of the keys to making a great movie is planning ahead and scheduling to avoid problems so you don't have to throw money at them after they occur.

Check www.QuickFilmBudget.com for a sample film budget.

Talent Agencies

Making a film requires a base of fans who all want it to get made. Even though a film only needs one creative vision from the director, the process is extremely collaborative. Usually, filmmakers only think they need a crew and actors but you really need many more fans to get your film a high level of distribution. Distribution starts with getting actors who are valuable to a distributor. These actors are sheltered by agencies who act like gatekeepers. Yes, agents have bad reputations for being tough businessmen but you must get them excited about your movie so they move from obstacle to facilitator. Once you have an agency on board with an impassioned agent championing your film, the process should become easier to attach actors. If you can pay a 5% packaging fee to an agency, you should definitely let them know it. Agencies are always looking for ways to bring in more money to their agency. So if you can offer a packaging fee and the possibility to make another commission of selling the film, do it! The 5% of your film budget will most likely be worth it. Just keep in mind that you only want the agency's best actors. The worst case scenario is that you pay the 5% and then accept the agency's out of work actors who are meaningless to distributors.

Check www.QuickFilmBudget.com for a sample film budget.