Finance: Show me the money

Everybody knows there is no exact formula to raise the funds necessary to produce a film or television program, but it doesn’t hurt to ask those who have done it successfully, using both traditional and new methods.

(note from the editor: this article was originally published in the November issue of Encore, before Screen Australia released the Drama Production Report for 2009/10)

According to the most recent National Survey of Feature Film and TV Drama Production, in 2008/09 thirteen features were financed mainly by film/TV industry sources (including cash flow against the Producer Offset); 11 were financed “substantially” by Screen Australia, State agencies and the Adelaide/Melbourne festival funds; seven (including three co-productions) were financed mainly from  foreign sources; and one was financed mainly from private sources. Private investment dropped from $40m in 2007/08 to $5m in 2008/09, mainly due to the disappearance of the 10BA model.
Under Screen Australia’s revised Terms of Trade,  the Commonwealth Government will only fund up to 65 percent of the production budget (Screen Australia and Producer Offset). The other 35 percent tends to be a combination of State funding bodies (5-10), industry (distributor, sales agent, presales, gap funding, overseas studios, etc.) and private investment Animal Kingdom producer Liz Watts says her basic formula for a feature will always follow the notion that there’s a certain amount of Producer Offset available if the film qualifies as Australian, and a certain amount of equity through Screen Australia and State agencies.
“That gives you around 60-70 percent of the finance, and then beyond that, it’s a bit of an open canvas,” she says. “Australia has a tradition of handing over the rights for the rest of the world to an agent, and for some projects that works really well, but for others it may not be necessary – when you have a more experienced director who has a name and some kind of track record overseas, you wouldn’t bother selling off the rest of the world; you might just pre-sell a few territories.

“It all depends on the project, but there’s always a certain amount of market participation. Sales estimates are very important, and will also allow you to gap finance if necessary, based on the returns that are coming in terms of sales,” she explains.
In the same financial year, direct Government funding for TV accounted for 14 percent of the total spend; the screen industry (including commercial and public free-to- air broadcasters, pay TV,  distributors and production companies, as well as cash flowing of the offset) funded 74 percent of the total, and private (six percent) and foreign investment (10 percent) provided the rest.
There may now be more television channels in Australia, but that doesn’t mean there’s more money.

Sticky Pictures’ Donna Andrews says getting a project off the ground is like putting a puzzle together – one piece is always missing. Her most recent project, the co-production Me & My Monsters, was a combination of broadcaster commissions in Australia and the UK, a presale to Germany, distributor investment, a publishing deal, a ‘boost’ from the NSW Government, and the producing partners’ own investment (including the offset).

Screentime’s Bob Campbell uses a similar analogy to describe financing, looking at it as a Rubik’s Cube where the elements have to be put into place and worked on as simultaneously as possibly.
“Every project is different, and no, [financing] is not going to get any easier. Those are the two statements that everyone would agree on,” says Campbell.

Screentime’s formula requires the early engagement of a network to provide development funding.

“Confidence will be generated by good ideas, simply explained and well realised in the development stage,” he explains. “It’s a measured process and we like having the networks involved in that process from the start, embedded in the development and subsequent production. What makes things workable or not is what proportion of the total budget is fundable via license fees, and in some cases, equity investment. That’s the part that needs the most work.”
According to Campbell, production is typically funded by the network license fee, a distribution advance, Screen Australia/State agency funding, and the Producer Offset. He has one piece of advice: “It’s always better if you can produce the program without a foreign distribution advance. This way, you’re not relying on the foreign money to come in or not come in at the last moment, and you’ll get much better terms and returns from a distributor if it doesn’t have to advance money to make the production.”
“The subsidy you can get in this country is a fantastic option for us, something that’s very valuable to the industry, and if we want to keep being an industry we need to maintain it,” says Watts.
Not everybody is as enthusiastic as her; some are critical of the model, which they claim has created filmmakers with little sense of accountability, while others have conspiracy theories about who gets funded and why. Regardless of opinions, Government funding is an essential part of the mix for most film and TV projects.

The last few years have seen a reduction in the funds available for direct investment; for Screen Australia, the introduction of the Producer Offset assumed that projects would be financed without the agency’s support, but the reality of the market has worked against this assumption, and most still require Screen Australia money.
“Screen Australia has had to deal with reduced funds for a similar number of applicants by reducing the amount of available finance for each film, which now means that the funding cap for individual projects is $2.5m,” says head of production investment Ross Matthews.

The division between cultural and commercial objectives has been a constant debate for the local industry. Screen Australia’s approach has tried to reconcile both, asking filmmakers to assess the market potential of their projects. So when all basic requirements are fulfilled, what criteria ultimately defines who gets support and who misses out?
“For feature films – where creative and commercial criteria are taken into consideration, obviously the relative strength of each project’s assessment against the other will be a factor,” explains Matthews. “Other criteria will also play a part, including seeking a diverse slate of projects – covering a range of budgets, a range of genres and a range of practitioners of differing levels of experience.”
Matthews and his team are in a unique position, having access to the financing information of each and every project that applies for funding. From this vantage point, Matthews believes there are two factors that determine the potential success of a project, beyond Screen Australia’s support.
“A project that does not have strong support on paper from its local distributor is going to find it tougher than one where the distributor has committed to the project with a really strong offer – either as an advance, good terms or a mixture of both. Films pitched as highly commercial propositions should have international presales or a significant contribution from its sales agent to back up this claim,” he says.
According to David Court, head of screen business at the Australian Film Television and Radio School (AFTRS), there are at least 4,500 producers working across all media in Australia. Considering the growth and replacement rates of the sector, 450 new producers are needed every year. How are they supposed to learn the complexities of financing? Producers have traditionally learned on the job.
“I stumbled my way through it. I haven’t had any training at all in producing,” admits Samson & Delilah and Here I Am’s Kath Shelper. “You must try not to get too far ahead of yourself; it’s in that process of working and doing smaller productions that you come into contact with people who can mentor you and help you along the way.”
Liz Watts agrees on the importance of mentoring: “It’s vital that you talk to people all the time. I’ve had lots of help from lots of people, from Marion Macgowan to Jan Chapman. Sharing information is really, really important.”

Court, however, believes the “start in the mailroom and work your way up” career path is no longer a reality for emerging producers, which is why formal training is increasingly important. AFTRS is offering its new Graduate Diploma in Producing and Screen Business, with a strong financial orientation: “The core skills are those of financial analysis, such as present value and internal rate of return
calculations. Beyond that, producers need to understand the market context, the particular risks of the business, and the various strategies of project financing,” says Court.
“Very few people get into the industry thinking they want to be involved in financing intellectual property assets. It’s something they find themselves doing. Their concerns are the obvious ones: do I really know how to do this? Is there a better way? What do investors really want?”
According to Templar Films’ Jeff Purser, “people have been saying there are no private investors for 40 years. It’s a cop out. The GFC did dry up money to a certain extent, but the opportunities are there.”

So where can a producer find private investors?

“It’s a producer’s job, no matter where you are – a party in a wealthy suburb or a government event in Parramatta – to always look for highly networked individuals, or those who have management positions in a corporate entity and have access to marketing spends.

“Get on Google; look at different companies, research people. I’m working on a comedy in which the character wins a racehorse, so I’m looking for highly powered individuals who own race horses. We have a hit list to pitch our film idea; we can get their horse on the film and they’ll get branding. Maybe that will turn into nothing, but then again, it could turn into something,” he adds.

Whatever happens, don’t be discouraged by rejection. The conversion rate might be low and out of 10 meetings, there may only be one positive response. However, you must be smart and ensure you’re not wasting your time with people who like the ‘glamorous’ idea of meeting with a producer, but are not the actual decision makers.

“The best thing someone can say is ‘yes’; the second best is ‘no’, but the worst is when they can’t make up your mind and they dangle you for six months, and you waste time and effort. It’s about qualifying very early on. Can this person actually make a decision?”

In Richard Gray’s experience nothing works better than the truth, because people know that investing in Australian films is “hardly a blue chip proposition”. Producer Anita Ziemer managed to find about a dozen investors and fund privately 90 percent of Summer Coda.

“In our project, investors are the first to recoup and we didn’t offer one cent of deferrals to anyone, which was crucial, because deferrals so often dilute investments in our industry,” says Gray. “Investors need to be given the best possible chance at recoupment. In the end, it’s the experience of being involved with a movie and a passionate team that makes the difference. Figures and
breakdowns can paint any picture you want, but it’s not going to sell savvy investors. We sold our team, cast and story, and then put them in the best possible position and made Summer Coda for a budget that represented its box office potential. What seems like common sense is actually incredibly rare.”

Sticky Pictures’ Andrews has only done one television project which was privately funded; an experience she found challenging but also fascinating.

“Still tonnes of paperwork! The investors looked closely at our track record, from a business and creative perspective. The dollars were extremely monitored – which is fair enough – and the reporting, complicated. But we got there, and on budget,” she explained.
It’s no accident when a company logo shows up on screen. It is most likely a product placement / branded content exercise conceived to benefit both the filmmakers and the sponsoring company and therefore, a potential source of funding.The US, the UK and India even have ‘matchmaking’ companies dedicated to identifying potential partnerships between brands and media products, from music videos to Hollywood blockbusters.

Locally, there have been similar initiatives but Australia’s market hasn’t reached that level of maturity across the board – at least not all sectors. While TV production companies have found success (MasterChef, anyone?), the local film industry hasn’t embraced it openly. Still, some producers are already taking advantage of corporate opportunities.
“Australians are sometimes early adopters of technology and ideas, but other times they’re resistant. We lead the international market in sport sponsorship opportunities, but in terms of film, we’ve been dragging out here,” says Jeff Purser.
In 2004, Purser got “hundreds of thousands of dollars” from advertisers such as Wild Turkey Whiskey and Durex condoms for the $1.5m comedy Fat Pizza, and received a generous amount from Oporto for his 2009 drama about Lebanese Australians, Cedar Boys.

These decisions are made by protective marketing directors and CEOs, looking for synergy between the project and the brand, and a return on their investment.
“They don’t want to associate their brand with anything that might bring it into disrepute. Their question is ‘Why should I give you $100,000 instead of putting that money in our key advertising spend that will reach X amount of people?” explains Purser.
According to Purser, a corporate sponsor will require a film to have a reputable distributor attached – even if in those early days the size of the release can’t be yet determined. A sponsor will want to know how much screen time the logo will get and how it will be placed in the frame, and even equest to see the script pages for the scene.
“You want to satisfy the client and make them happy,  but you don’t want to spoil the scene,” says Purser. There is no guarantee of how many people will watch a film or TV show, or how sponsors will assess the success of their contribution, but Purser says happy clients are usually those who leverage their branded content/product placement with other promotional efforts.
“Companies that do that tend to get a lot out of it; often their sales will increase. Companies that just give us money and then do nothing at all may not get the best results,” he argues.
Richard Gray’s Summer Coda was also supported by corporations. He says his day job in lifestyle television taught him it makes sense to find corporate sponsorship without any kind of artistic guilt, but it’s something that has to be planned with precision.

“You need to go at this hard very early on, as it’s often a ‘we could help you next financial year’ kind of proposition. Summer Coda had major travel and accommodation expenses so we concentrated on this area and Virgin Blue and various hotel chains came on board. Then we began looking at the key elements of the film that a sponsor could get behind. We found it to be orange juice, coffee and
alcohol! Citrus Australia, Original Juice Company, Ducale Coffee and Mildura Brewery were tremendous supporters, just to name a few,” he says.
The production also received in-kind support from industry players: “This in-kind side of things is not a fiddle you can play many times, but when it’s your first feature and you can offer legitimate value and exposure for the sponsorship, we found there were many great people wanting to help,” he says.


Social networks represent a new area of opportunity for independent creatives. Many projects have been made through crowd funding – appealing to potential donors, who each contribute a small amount towards the budget.

Julian Harvey and Enzo Tedeschi launched the ’135K project’ ( to raise funds for their film The Tunnel – which is set to be released online, for free – and invited people to buy frames of film for $1 each. The target: 135,000 frames, or $135,000.

“That’s the actual budget, and we’re financing it by selling frames and merchandise online. We’ve kept things on a very small scale, and done deals with people that believe in what we’re doing. We stayed away from outright deferrals; there’s a bit of a stigma attached to that now, because many people, myself included, have been burned by never getting paid on a deferral job. There’s only so many times you can do that before it gets tiresome.”
At press time, 20,427 frames had been sold to people in Australia and places as remote as Latvia. Tedeschi feels that, in many ways, the effort has been a success.
“If you consider that most crowd-funded projects seem to peak at around $10-12,000, we have sailed past that. And the awareness around the project we have had to generate in order to sell that many frames is another victory for the project,” he says. “There’s no ‘one-size-fits- all’ approach. If you’re going to crowd fund your film,  you’ve got to offer a unique proposition; it’s just like selling anything else in a crowded marketplace. It also helps to know your audience and demographic – for our film, the target demo overlaps considerably with the demo of high internet users, so the odds of connecting with our audience and people that would chip in were high.”
According to Tedeschi, projects need credibility in order to succeed in the world of crowd funding: “If you have a name attached to a project, it instantly puts it in a particular level of credibility, so your audience may be more willing to help fund you. Their perception of the calibre of your project is potentially higher.”
While The Tunnel had its own website and fundraising system, creatives don’t necessarily have to build their own technological infrastructure.
Sites such as Fundbreak ( have been launched to provide a platform for creatives across all disciplines to present their projects to an audience and raise funds to produce them. According to co-founder Rick Chen, it has a success rate of approximately 30 percent, with 18 projects having reached their funding goals: “Our service targets the local market, working with organisations and communities to deliver the platform and help people set up their campaigns,” he says. “A filmmaker might want to target their fans; generally speaking, the project targets its instant network of people and the word spreads from there.”
While crowd funding is a promising new method, it is unlikely that a project could be entirely produced this way. Its benefits however, go beyond finances.
Even the most experienced psychic with an infallible crystal ball would have a hard time predicting what the future might bring in terms of financing.
Oscar-nominated producer Drew Bailey got funding for his short Miracle Fish from (MTV Italy), but that site no longer finances films.
“There is a range of different places to get money from, and I am constantly learning about new funding sources. Unfortunately many of these come and go as quickly as you find out about them,” he admits.

It’s this constant instability that makes it difficult. Sue Taylor says in most cases a project is nurtured for years.
In the meantime, everything from regulations (locally and abroad) to technology, power brokers and currency exchange rates can and will change without notice.

“What might seem a valid finance structure one year is no longer a valid structure 12 months later. I’m presuming the television market will continue to fragment, and the budget will probably come from several broadcasters, not one, which means windows will have to start collapsing. I’m expecting a shift to product placement rather than direct advertising, as new media become more prominent.
“As for financing features, well, that’s just fuelled by passion. There is no reliable finance model that currently makes genuine commercial sense, unless the cost structures are reduced and the distribution models change quite radically,” she explains.
Experienced or emerging, every producer is learning new tricks as they move forward. The money is out there; it’s just a matter of finding it before somebody else does.


“If it was easy, everyone would be doing it! I don’t  think we could sustain that.” Richard Gray
“I quite hate it actually… but there’s a moment where it starts snowballing and the film is definitely going ahead, no matter what. That’s always a great feeling.” Liz Watts
“I enjoy the financing process; it’s not more stressful than finding a distributor. If I can package up a good project then I’m always confident I’ll be able to finance it.” Jeff Purser
“I’ve never had a baby but I imagine it’s like childbirth, you just get through it and then forget how painful it was.” Kath Shelper


“I was dealing with a half million dollar gap in the finance during pre-production, with a deal structure that made it impossible to attract a private investor, a timeline that prevented budget changes, and a volatile dollar which meant my foreign component was devaluing by the day. I had no choice but to borrow the money personally, using my house as security to keep everything going. Not something I’d ever recommend.” Sue Taylor
“Waiting. A lot of your financing is all verbal and then you have to go through a contracting process, and that can often take a long time. Until the money is in the bank, you’re not financed.” Jeff Purser
“Getting in bed with the devil. You need to be really aware of what you’re doing and what you’re giving away, where the power lies in terms of the production.” Liz Watts


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