Study

4

Vision film company

Background

Vision Film Company (VFC) was founded fifteen years ago by two Polish expatriates. Now based in Krakow, Poland, it has produced numerous television commercials and documentaries, some of which have won international awards for originality and creativity. It has a small, highly experienced production staff and depends on an extensive freelance staff for its projects.

The Director and Executive Producer of VFC now want to make a feature film. The film is a drama set in post-war Europe. VFC have presented their business plan to a Swiss film finance company, European Finance Associates (EFA).

EFA have provisionally agreed to finance the project with a budget limit of $10 million. They have asked for a second meeting next month (April) to negotiate the details of the finance package. Industry practice is for film finance companies to be repaid their investment, usually with interest, and receive a share of the film’s net profits.

Executive Summary

The extraordinary success of independent films in recent Academy Awards shows that there is a huge demand for dramatic human interest films, whether they are performed by unknown actors or by stars. This proposal is for an independent feature film with a budget of $5.5 million.

The Polish Affair is a romantic thriller about Alicia, a young Polish interpreter, and a British intelligence officer, Justin, who meet and fall in love in the chaos of Vienna at the end of the Second World War. Without warning Alicia disappears, and their brief, passionate relationship ends. When, ten years later, they meet again by chance in Berlin their feelings for each other are as strong as ever. However, as the mystery behind Alicia’s disappearance unfolds it threatens to destroy them both.

This story will have great appeal to all age groups, but especially to film-goers in the 25—40 age group, who form a large segment of most countries’ film-going audience.

Here are some extracts from the VFC Business Plan.

Target audience

25—40 year olds; well-educated, frequent film-goers. The film will also appeal to older people.

Target market

Worldwide distribution. Main markets: USA, Canada, Europe.

Promotion

To help the producer make deals with major film distributors, the film will be shown at key film festivals (e. g. Cannes and Berlin).

Three-year income projection summary: Gross revenues

Low: $15 millio

Medium $25 million

High: $40 million

* A completion bond is like an insurance policy. If a producer runs out of money or exceeds his/her budget, the completion bond provides the finance to finish the film.)

' Reasons why "The Polish Affair" will appeal to audiences worldwide

< Outstanding script

< Romantic interest

< Exciting locations: Warsaw, Vienna, Berlin

v -у- Dramatic tension

Task

Work in groups.

Group A: Director and Executive Producer of Vision Film Company.

Group B: Directors of European Finance Associates.

Read your role cards and prepare for the negotiation. Then hold a meeting and negotiate a suitable agreement.

Role Card 1

Director and Executive Producer of Vision Film Company

1. Financial terms

After repaying 100 of EFA’s investment ($5.5 million) you will then share the net profits of the film on a 50/50 basis.

2. Payment of installments

You want the loan to be paid in the following way:

a) On signing the financing contract (April/May) 25 %

b) Before the principal photography begins (March) 50 %

c) At the end of the principal photography (June) 15 %

d) When the laboratory work is completed (July) 10 %

3. Choice of director

Director: you have a brilliant track record in the advertising sector of the film business. You have also written the remarkable script for the film. Try to persuade EFA that you are the right person to direct this film.

4. The leading actors

You want to use two unknown actors in the main roles. They have agreed to perform in the film and you believe they have great «star potential». If you have to use established stars, this could add $1—2 million to your costs — perhaps even more.

5. Distribution

You are confident of signing up major distributors once the film is made and its quality is apparent to everyone (good story, wonderful script, plus your technical skills).

6. Artistic independence

You want complete independence when making the film, especially in two matters:

a) the film must contain several erotic scenes featuring the two lovers so that it will appeal to contemporary audiences’ tastes.

b) it will have a sad ending which will highlight the high moral standards of the two main characters.

7. Launch date

Preferably July (final year).

Athree-month publicity campaign immediately after the Sundance Film Festival is essential for the film’s success in the United States.

Role Card 2

Directors of European Finance Associates

1. Financial terms

You want to be repaid 120 % of your investment ($6.6 million) within five years of the launch of the film, plus 70 % of the net profits of the film. Your reasons are: it is a high risk investment; the producer and director have no track record in making feature films; they want to use unknown actors.

2. Payment of installments

You want to pay the loan to Vision Film Company in the following way:

a) Pre-production (September) 10 %

b) Before the principal photography (March) 40 %

c) At the end of the principal photography (June) 35 %

d) When the laboratory work is completed (July) 15 %

3. Choice of director

You do not believe that the present director has suitable experience for this film. You want to appoint someone with a good track record in feature films and offer that person a salary, plus a share of the profits.

4. The leading actors

You feel strongly that two European stars should have the principal roles. They would greatly increase the profit potential of the film and also attract major distributors.

5. Distribution

The director and producer of VFC do not understand that it is difficult to sign up distributors, especially when they do not have a track record in feature films. To do deals, you need contacts and skills. You can help VFC to make the necessary deals, but this will involve time and money!

6. Artistic independence

The film makers can have a great deal of independence — you will not interfere. However, they should bear in mind the following:

a) the film must have a happy ending. Film-goers do not like to leave a cinema feeling sad.

b) the film should contain some «flashback» war scenes involving Alicia and Justin in order to attract younger film-goers.

c) there should be few, if any, erotic scenes as the film needs to appeal to a wide range of adults in various age groups.

7. Launch date

March (final year) at the latest, to follow up its expected success at the Sundance Film Festival.

Writing

As Executive Producer of Vision Film Company or as a Director of European Finance Associates, write an e-mail to all senior staff informing them of the results of the negotiation and indicating how the project will proceed (See chapter 2, p. ??).