The grass is always greener…

Although they each call North America home, Canada, Mexico and the U.S. offer independents a radically different base of operations. Miranda Hawkins examines some of the approaches producers take in each when it comes to putting together the bucks for their project.
May 1, 2001

Canada: A helping hand-out

For its small population, Canada has a relatively large number of doc-makers. Their efforts are encouraged by funding agencies that offer loans or invest in projects. Some are government initiatives (the Canadian Television Fund, Telefilm or the National Film Board of Canada, for example), while others are private funds administered through communications companies. (i.e. Cable outfits like Rogers and Shaw are required to funnel a portion of their revenue into independent production.) These funds make projects possible.

One of the many producers these funds have aided is Sunny Yi. Yi is wrapping her sixth film in five years. Five aired on the Canadian Broadcasting Corporation (CBC), and all received government funding. ‘It’s a complicated and convoluted system, but I can’t complain,’ Yi says. ‘My first six documentaries have been 100% financed.’ The budget for each of Yi’s films was comprised of five elements. First, there was a license fee from the broadcaster. License fees in Canada are much less than those in the U.S., but in order to receive government funding, it must attract a license fee equal to at least 15% of the total budget. The CBC licensed some of Yi’s projects for 15%, others for as much as 30%.

The Canadian Television Fund (CTF) Equity Investment Program (EIP), which is administered by Telefilm, then contributed a significant portion – in some cases up to 49% of the total budget. Another CTF initiative, the License Fee Program (LFP), provided an additional 15%. Tax credits rounded off the rest of the budget. In order to encourage production in Canada, the federal and provincial governments provide tax credits for labor costs associated with production. The contribution to a complete budget can be significant. Yi estimates tax credits for her most recent film comprised about 15% of the total budget. However, since it can take almost two years to receive the money for those credits, Yi had to get a bank loan to cover that portion. ‘The joke [in Canada] is that it’s 99% paperwork and 1% creativity. It’s like writing a thesis. I always have a person, such as a production manager, who uses the calculator for me. You can literally spend all your time figuring it out.’

Maureen Marovitch and David Finch of Picture This Productions in Montreal were trying to avoid that vortex of paperwork when they went through the relatively simple process of applying for a Canada Council grant. They were awarded CDN$50,000 (US$32,000) to develop their film When Two Won’t Do. This they combined with $10,000 (US$6,400) from a Quebec funding body called La Société de Dévelopement des Entreprises Culturelles (SODEC), then researched and shot a five-minute reel on multi-partner relationships.

When they approached broadcasters, however, they were told their subject was too obscure. Without a license fee from a broadcaster, most funding avenues were cut off. Marovitch and Finch decided that if what was halting their project was obscurity, they would give themselves some advance press. They launched a publicity campaign to raise awareness about polyamorous lifestyles that netted them national attention.

To give themselves more clout, they joined forces with a more senior partner – Montreal’s Galafilm. ‘They made us look like serious contenders,’ says Marovitch. When the new team pitched the project at Banff, they walked away with a license fee from TVOntario and two second-window broadcasters, but they still couldn’t get any money from CTF or Telefilm. ‘They said it was one of the best pitches they’d ever seen,’ says Galafilm’s Richard Elson, ‘But it didn’t meet their content requirements.’ The CTF later made a new category for such projects that did pay off.

When the project was pitched in Amsterdam, it didn’t get net international sales, but did attract a distributor. Armed with $25,000 (US$16,000) from the Rogers Top Up Fund, the team went ahead and shot the film. Another sum from Rogers Cable Production Fund enabled them to start editing. However, the project is far from paid for. ‘I hope we sell it at rough cut and it gets a good reception at the festivals. But, unless we get additional funding from provincial agencies, we’re still looking for 25% of the funding,’ Elson says.

Stories about patchwork funding don’t surprise Christian Bruyere, director of operations at OMNI Film Productions in Vancouver. Layering contracts and contributions from several sources is something he sees with projects of every genre. ‘For OMNI’s series, Champions of the Wild, the principal broadcaster is Discovery. Their license fee is 12% of the show’s $2 million-plus (US$1.3 million) budget. To get the amount you need to qualify for government funding, we go to smaller broadcasters for second windows. We have six second-window broadcasters,’ says Bruyere.

Managing the goals and expectations of partners can become a job in itself, one that will become more important as Canadians pool their talent and resources with prodcos in other territories. Laszlo Barna had his first experience with international copros on his six-hour series, The Sexual Century. ‘The administration portion was a nightmare. We had two thirds of a $3.5 million (US$2.25 million) budget from license fees from History Television, with a second window for CBC and Canal D, plus tax credits, plus the CTF’s LFP and Telefilm’s EIP. We also had an advance from our distributors for 10%. Then Carlton in England and Pathe in France signed on as coproducers. We had 11 contracts that had to be brought to the table,’ says Barna.

In a treaty coproduction like this one, Canadian content rules are relatively easy to satisfy. ‘Coproductions are designed so that each country can endorse the project with all the benefits it would be entitled to if it were 100% Canadian or 100% Italian or 100% British. I don’t have to use Canadians for 100%, just for our portion of the project,’ says Barna. The copro allows Canadian producers to expand the scope and budget for a production, and still take advantage of the Canadian funding system.

Although government initiatives and cable funds can be a huge boon to filmmakers, some Canadian producers occasionally bypass traditional funding routes for projects. Bruyere has taken a path more often associated with American documentary funding and applied to private foundations. ‘I’ve fully financed four or five projects with money from foundations like Sick Children’s Hospital and Rick Hansen’s Foundation. Anyone can do it. Go get the foundations book off the shelf in any library and start making the calls,’ he says. In order to provide a tax write-off for the foundations, Bruyere had to set up a not-for-profit company to handle the project. ‘Everyone involved is getting a fair wage, the company simply can’t turn a profit.’

Lori DeGraw at Sparks Productions is also taking a less typically Canadian route for her series Wine Television, now in its third season. ‘We used no public funds. Our program wasn’t a genre that would qualify for most funding and our subject matter was international in scope. So, from the start, we were trying to think about a different way of doing things,’ says DeGraw.

After DeGraw and her partner Andy Crosbie secured a broadcast license from Global Television’s specialty channel, Prime, they approached corporations for sponsorship. They pitched to dozens before they finally paired up with Corby Distilleries. Though DeGraw declines to say how much of the budget Corby contributed, she will say that it was enough to green light the project. Several foreign sales raised the financing to 100%.

It’s an unusual success story in Canada and DeGraw admits that raising corporate funding wasn’t simple. ‘I knew our series wouldn’t be eligible for government funding, but I was also hoping to avoid all the bureaucracy. It wasn’t an easy route. People were really resistant to the idea. Even some of the interested parties couldn’t move fast enough, because they were just too big,’ DeGraw says. ‘When it comes to fundraising, it’s always going to be a hard job, no matter how you do it.’

Mexico: Keeping Control

Though Mexico’s devotion to television is fast catching up to that of its northern neighbors, producing docs and reality programming provides some unique challenges. Beatriz Acevedo-Greiff’s production company HIP TV (Hispanic International Producers) makes programming for the American market from its offices in Los Angeles, and HIP Latin makes shows for the Latin American market from its new offices in Rosarito, Mexico.

‘People in Mexico used to be very unsophisticated in terms of their expectations of programming,’ says Acevedo-Greiff. ‘We only had free Mexican channels. Now, we get programming from the States and all over. But, the budget for a program for Mexico is one tenth of an American budget. When I have an American production, I just add a zero. A license fee for all the territories of Latin America, including Mexico, can be as low as $5,000.’ Coproductions and commissions are more lucrative and the fees are dependent on the subject matter and the broadcaster’s interest.

Self-financing and maintaining control of her product has allowed Acevedo-Greiff to turn her prodco into a thriving business. ‘I deficit my financing up to 75%. I own my own camera, sound and post equipment, which combined with my fee as executive producer, writer and director makes up as much as half the budget. Then I license it, sometimes to a corporate sponsor.’

When Acevedo-Greiff shot a series on extreme sports in locations around the world for USA Networks in Latin America, the broadcaster’s license fee was a third of the budget in the first season, but HIP Latin maintained the rights for all media except cable TV in Latin America. ‘Normally in a deal like that it would take a couple of years to make back my investment. But one year, I sold the rights for free TV to Nestea – just from that I made back 100% of my budget.’

She also takes a one-stop-shopping approach to producing, hiring, developing and representing the talent she uses in her programs. It’s a successful strategy, but one she can use in the Latin American market only. ‘In the U.S., I haven’t kept any rights. My projects are straight commission stuff, so I can build my portfolio in English, the way I did in Spanish,’ she says.

Juan Carlos Colin’s Palmera Films in Mexico City produces documentaries for television and theatrical release. He says there aren’t a lot of production companies within Mexico that specialize in docs, but as his counterparts in the rest of North America say, money is always the issue. ‘This is a job that is difficult to ensure. The shooting is the easiest bit,’ says Colin. His company survives by renting out production and post-production equipment, and putting some of that revenue toward Colin’s films.

Last year Palmera Films produced 13 half-hours on Mexican artists called The Craft of Imagination. Palmera sold the show, but not until Colin had financed and completed the first six episodes. Colin also engages in coproductions with other countries, but even these can involve a substantial investment. Basque Television approached Colin with a proposal for a documentary on Pedro Lascurain, a Basque descendent whose 45 minutes as the president of Mexico in 1913 left a lasting impression on the country. But, Basque only had financing for two thirds of the budget. To make In Power for Under an Hour, Colin put up the other third. Colin is hoping his current project will be fully financed. ‘Discovery paid the development money – about 5% of the budget. Channel 22 in Mexico will license it for about 20%. Now we’re trying to get coproduction money from other sources. I’m in limbo right now waiting for coproduction money from Spain. But, Discovery will be the main producer on the project and should cover the remaining amount,’ Colin says.

He is also collaborating with a filmmaker on a theatrical release. This time, the financing hopefully won’t depend on broadcasters or Colin himself. He believes they will get a substantial portion of the budget from FIDEFIN, a new fund composed of contributions from broadcasters, distributors and IMCINE, Mexico’s Film Institute.

U.S.: Building from the ground up

It’s no secret that the big money for film is in the U.S., and docs are no exception. Still, the route to a fully financed American program can be discouraging until a producer finds a niche – not only for the project, but also for the filmmaker’s individual fundraising style.

Bruce David Klein of New York-based Atlas Media and Thom Beers of Original Productions in L.A. both produce projects for the specialty channel market, with budgets around US$250,000 an hour. Both do commissioned work, but favor keeping the rights and working with broadcasters on a coproduction basis. Says Klein: ‘There’s a trend towards networks owning more and more, and producers owning less and less. If you do all commissions, you run the risk of not building an asset base. If you only do coproductions, you run the risk of always being a bank and always being behind the financial eight ball. You have to strike a balance between the two.’

Klein and Beers’ financing formulas are also almost identical: an initial licensing fee of 60% to 70% of the total budget, with another 20% to 30% in international guarantees or advances from distribs. When the numbers don’t total 100%, both Klein and Beers – who own cameras, sound and post equipment – are in a position to bankroll the remainder until the project turns a profit.

Klein sometimes doesn’t even look for funding for a project. ‘Self-financing amounts to about five to ten percent of our overall business. We finance a project ourselves when we believe in something so much we’re certain we’ll make it back, and when the topic is so current we don’t want to waste time by going through the pitch process,’ he says.

Beers takes a less speculative approach, refusing to work on anything that hasn’t been sold. ‘I pitch about 30 projects a year and see what sticks.’ The trip from first pitch to holding the check from the broadcaster generally takes about four months, he says. Seeing a profit on the finished project can take even longer. ‘If you’re lucky, you can be in a break-even position before you start shooting – if you have a good international presale. Other times it can take months or years to pay back the company for the amount you deficit financed. If a distributor contributes to your budget by giving you an advance against commission, you have to pay back the distributor. You just hope that two of every ten programs is a hit, so that it balances out,’ says Beers.

Tom Borden and Paul Aldridge are young producers trying to build their reel and their reputation in the same marketplace that buys the work of Beers and Klein. Though their company, Wandering Eye Productions, has only three projects to its name, they have over five years of experience navigating the money trail.

‘To suddenly turn around and put on your sales hat is pretty hard,’ says Borden. But, Wandering Eye may soon get 100% of the financing for a $400,000, feature-length film on Gideon’s bibles, thanks to pitches Borden and Aldridge made at the RealScreen Summit in Washington, D.C. and the AIDC in Perth. ‘We’re talking to five potential broadcasters and two potential distributors. For us, the cost of getting to D.C. and Perth is nothing compared to the exposure,’ says Borden.

Another non-traditional route paid for two other projects. Wandering Eye’s productions for Nat Geo were the result of a worldwide contest. Their only other production, The Circumnavigator: Bali High, was financed with savings and credit cards. It’s a strategy Borden actually recommends – partly because he knows of no others for beginning filmmakers. ‘I don’t know anyone who got a start making films without their own or borrowed money. The way to get into this business seems to be headfirst with blinders on, hoping to catch enough notice for your work along the way,’ says Borden.

That’s a strategy R.J. Cutler won’t employ again. ‘You can spend all your money once and that’s it. We’re still trying to get out of the debt from A Perfect Candidate,’ he says. When Cutler’s team at Actual Reality Pictures developed American High, a docusoap-style program with high school students from Chicago, they did it with the idea that the series was a valuable primetime commodity. The result was a partnership with 20th Century Fox and $7 million in financing.

Cutler says that in order to get money for projects, what filmmakers need most is a change in mindset. ‘The problem with financing is that too many filmmakers get into this culture of ‘I don’t deserve to make money, or be paid for my work or make films with a budget.’ Why can’t it be entertaining and viable as well as virtuous?’

When George Butler wanted to get his documentary on Shackleton’s Antarctic expedition financed, he first approached corporate America. His first pitch netted $3 million from Morgan Stanley. ‘They took a big gamble, but it paid off handsomely for them,’ says Butler. Butler was able to secure this amount because of his reputation as producer of films like Pumping Iron, but also because Shackleton’s legendary leadership abilities appealed to the business world.

Shari Robertson’s subject matter strikes a similar chord with foundations. Robertson and her partner Michael Camerini have financed their last few projects entirely with grants, including Well Founded Fear, a film on the American political asylum system that opened at Sundance and will soon show on CNN. ‘Foundations play a small but important role… Grants offer you the independence to make the films you want to make. Once you get the money, it’s up to you what to do with it,’ says Robertson. But getting the money depends on knowing the goals of the foundation, developing relationships with program officers, and overcoming preconceived notions about docs. ‘Filmmakers are like roaches to foundations. In the past 20 years, many foundations haven’t been pleased with the results of the docs they’ve funded. They’re betting on the filmmaker and it’s a gamble,’ says Robertson.

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